Well-funded anti-tax groups, working alongside the B.C. Liberal Party, claim that ordinary British Columbians are falling victim to the province’s Speculation and Vacancy Tax.
The tax, which was introduced by the NDP government last year to curb real estate speculation and cool the province’s skyrocketing housing costs amid an unaffordability crisis, levies 0.5 to 2 per cent on the assessed value of unoccupied second homes in B.C.’s most expensive real estate markets.
The results of the tax have already begun to show. Some extravagant, multi-million-dollar mansions, which would otherwise likely remain empty, are now being rented out in Vancouver at “rock-bottom prices” (much to the horror of some realtors).
The opposition narrative
Despite these results, and even though the tax applies to roughly 1 per cent of the province’s population, B.C. Liberal leader Andrew Wilkinson has repeatedly called for the tax to be scrapped. He recently tweeted that the tax will fall primarily on “brokenhearted families” who own vacation homes in Metro Vancouver, Kelowna and Nanaimo.
The Scrap the Speculation Tax campaign, funded by B.C.’s most powerful real estate lobbyists, launched the #IAmNotASpeculator hashtag on Twitter last year. The group regularly posts that slogan alongside an image of an elderly man comforting his fretting wife.
Meanwhile, news outlets are reporting stories of ordinary people caught up in the exemption process for the tax. The Vancouver Sun said a 78-year-old Coquitlam woman was forced to “jump through hoops” in order to exempt her dead husband from the tax. B.C. Liberal MLA Tracy Redies told Surrey Now her office had received calls and emails from homeowners who felt “unfairly penalized” by the tax.
Other opponents paint a much less sympathetic picture. Architect and property developer Michael Geller complained about having to dig up “incorporation numbers and incorporation dates” while filling out his paperwork for the tax. Real estate company owner Kevin Skipworth called the tax a “pathetic tax grab” and an “attempt to earn votes.”
Opinion columns calling for the speculation tax to be scrapped are a regular feature in establishment newspapers. Mike Smyth, columnist with The Province, called on the Liberal and Green parties to “team up” and vote against the tax. CEO of the B.C. Chamber of Commerce Val Litwin boldly suggested, based on mostly anecdotal evidence, the tax was “hurting the 99%.”
Ordinary people support the tax
But evidence suggests the vast majority of people who will actually pay the speculation tax are wealthy elites like Geller — not ordinary residents.
The B.C. Housing Ministry estimates that only 32,000 out of the 1.6 million properties in the affected areas are subject to the tax. That reflects 2 per cent of all properties in the areas in question, and just 1.8 per cent of homes in the entire province.
A study by Zoocasa last year found that a buyer needs to make an annual income of $163,000 to afford a typical home in Vancouver (more than double the actual median household income in Vancouver, which is just $65,327). Since the speculation tax applies only to second, unoccupied properties, a rate-paying property owner entering the Vancouver market would, in most circumstances, likely be making at least that amount — in addition to income or assets to pay for a primary residence — to be liable for the tax.
Such dizzyingly high income figures might indicate why ordinary people broadly support the speculation tax. Independent polls conducted by Research Co. last year found 62 per cent of respondents in support of the tax, including 53 per cent of B.C. Liberal voters.
Not an election loser
The high-stakes Nanaimo by-election in January provided another litmus test of how ordinary British Columbians feel about the speculation tax. B.C.’s biggest newspapers suggested the rollout of the negative-billing exemption process for the tax during the lead up to the by-election would imperil the NDP’s chances of victory.
The Vancouver Sun claimed that the tax would “primarily target hard-working Canadians” and that it was “not smart politics” to levy the tax on unoccupied second homes in Nanaimo. Columnist Rob Shaw said the tax had “ballooned” into a by-election issue. The Georgia Straight’s Charlie Smith wrote, “The only way the NDP can truly get this tax out of the news cycle is by ending the negative billing option.”
On election night, however, the NDP’s Sheila Malcolmson defeated B.C. Liberal candidate Tony Harris by a comfortable 10-point margin. During the campaign, Harris deleted a line from his personal website admitting he “enjoys” real estate speculation.
B.C. NDP field director Jordan Reid, who organized the Nanaimo campaign, told Ricochet, “We found that most people were far more concerned about housing affordability.”
“What we heard from voters in Nanaimo is that they want a community where people can afford to buy or rent — they don’t want vacant homes. That’s what the speculation tax is about,” she added.
Joshua Gordon, a professor of social policy at Simon Fraser University, agrees the speculation tax is a critical first step in achieving housing affordability.
“We are already seeing some of the results from the tax, which has helped moderate speculation in the market and has begun to make housing more affordable, including in the condo or apartment sector,” he told PressProgress.
“Without the speculation tax we would be setting ourselves up for persistent housing affordability challenges,” he added.
While some opponents, like Geller, disparagingly say the speculation tax is really a “wealth tax” or a “Robin Hood tax,” the polling numbers and the by-election result in Nanaimo suggest this aspect of the policy isn’t putting off many people.
Perhaps British Columbians are happy to make wealthy elites like Geller pay a little extra, if that’s what it takes to curb real estate speculation and address the province’s housing affordability crisis.