Higher tax on luxury home sales urged

Vancouver Mayor Gregor Robertson pushes premier for Property Transfer Tax hike, speculation tax, more civic powers

Premier Christy Clark has been formally asked by Vancouver Mayor Gregor Robertson to make tax reforms to help control real estate speculation.

Premier Christy Clark has been formally asked by Vancouver Mayor Gregor Robertson to make tax reforms to help control real estate speculation.

Vancouver Mayor Gregor Robertson wants the province to add another step to the Property Transfer Tax to hit luxury homes harder when they change hands.

That request and other potential proposals to discourage home-flipping and absentee ownership are contained in a May 22 letter to Premier Christy Clark released this week.

The Property Transfer Tax now charges one per cent on the first $200,000 in property value when a home sells and two per cent after that. It currently adds up to $19,000 on the sale of a $1-million house, and generates more than $900 million a year for the provincial government, flowing into general revenue.

Robertson wants a higher transfer tax “on the most expensive properties” – he didn’t specify how much higher or at what threshold it should kick in – with the proceeds of the high-end increment instead earmarked for affordable housing investment.

He said housing should not be treated “solely as an investment commodity” for the world’s wealthiest citizens, who park their money in Vancouver houses and may leave them empty.

He said rapidly rising prices “are creating despair” among middle-income people with good jobs who struggle to find quality rentals and “who are not even within shouting distance of being able to buy.”

RELATED:Big majority backs absentee homeowner tax: Poll

Besides Property Transfer Tax reform, Robertson proposes undefined tax measures to discourage quick resales by flippers to reduce speculation.

He also proposes the province give cities the power to “track property ownership and ensure timely occupancy of vacant units.”

“These measures would help moderate the excesses of the Vancouver housing market, without unfairly punishing those who have built up home equity through hard work and personal savings,” Robertson said.

He said the policies would slow surging prices that threaten Vancouver’s ability to keep and attract “the best and brightest” and would “send a signal that our housing is for living in, not for investor speculation.”

Finance Minister Mike de Jong has pledged to study options to address home affordability but with care to avoid reducing the equity existing residents have in their homes.

Clark as recently as February was talking about eventually phasing out the Property Transfer Tax, not increasing it.

Realtor associations have previously urged the province to lift the two per cent threshold to $525,000 so homes worth less than that are charged only one per cent.

The Property Transfer Tax has been unchanged since it was first introduced as a wealth tax 29 years ago, and many more transactions have become subject to the two per cent increment as prices rose.

Higher PTT would punish farmers: Realtor

Jorda Maisey, president of the Fraser Valley Real Estate Board, said raising the PTT to punish Vancouver speculators could have severe unintended impacts on residents further afield, such as Fraser Valley farmers and other owners of larger acreages counting on tapping their property’s value to fund retirement.

“Our farmers are already having problems with the cost of farming and this could penalize them further,” Maisey said.

“Our concern is just bringing in another tax isn’t going to solve the problem [of speculators.] These people will just look at it as another cost of doing business.”

She said Vancouver-area property pressures don’t exist to nearly the same degree in the Fraser Valley.

Maisey also said the absentee owners of Vancouver condos that Robertson worries about are in many instances more local than some people think.

“It’s not all people from overseas,” she said, adding knows many Valley residents who own a second home in downtown Vancouver.

“They live in the Valley and they like to go into the city and spend time if they’re going to the theatre and not worry about having to come home.”

The benchmark price of detached houses in Greater Vancouver hit $1.1 million in May, up 14.1 per cent from a year earlier. Apartments were up 4.6 per cent from a year ago to $396,900.

In the Fraser Valley, the benchmark house prices were up 6.5 per cent from a year ago to $603,100. Apartments there were actually down 2.8 per cent from May 2014 to $192,500 last month.

House prices have risen the fastest over longer periods of time and in areas closest to Vancouver, where benchmark houses now top $2.5 million on the west side, more than five times the nearly $500,000 price in Maple Ridge.

Encourage small homes not monster mansions: Stewart

Coquitlam Mayor Richard Stewart, who chairs Metro Vancouver’s housing committee, said he’s unsure if tax changes are justified, noting the home owner grant is already a mechanism that effectively makes high-end homes pay more property tax than modest ones.

He agrees more work is needed to foster rental housing construction.

And he said cities should also do more to spur developers to build smaller homes, rather than the monster mansions that have been most lucrative as prices of higher end real estate climbed rapidly.

Stewart said too many quarter-acre lots in Metro suburbs are being built as huge 5,000-square foot houses, when four more modest houses could fit on the same lot as a bareland strata.

“I want us to explore ways to pursue both carrots and sticks to disincent the mansion in our communities,” he said. “Not prohibit it, but make it so it’s not the only profitable form of housing the builder can build and and to improve the profitability of some of the other forms were trying to advocate.”

Smaller homes around 1,400 square feet are more in keeping with the needs of a family, Stewart said, adding the higher density that results can help repopulate local schools and better support public transit.

Just Posted

A cache of 89 crabs was discovered during a 2018 compliance inspection at South Surrey’s Elgin Park Marina. (Contributed photo)
$7,500 fine for illegal crab harvest discovered in South Surrey

Laird Goddyn found guilty in Surrey Provincial Court following 2018 investigation

South Surrey’s Meridian Golf Course – a 15-acre property that also includes a residence – has been sold. (Colliers Canada photo)
South Surrey’s Meridian Golf Course sold to new owners

Deal for popular par 3 course expected to close by end of the year

Gerry Vowles (left), Michael Cook, and Dave Sinclair were awarded “Dominion Command Presidential Citations” June 17 in Cloverdale. The rare awards were given out for “exemplary service to the Legion.” (Photo: Malin Jordan)
Three B.C. legionnaires awarded ‘Presidential Citations’

Ceremony took place in Cloverdale June 17

Kaushal Parikh raised $2,840 for COVID-19 relief in India during his almost nine-hour run around the new North Delta Secondary School track on Sunday, June 13, 2021. (Submitted photo)
North Delta ultramarathoner raises over $2,800 for COVID relief in India

Kaushal Parikh ran the 90-km virtual Comrades Marathon around the NDSS track in under nine hours

City of Surrey photo
Surrey starts Slow Streets pilot project

Speed limits have been reduced in six Surrey neighbourhood zones for one year to monitor impact on residents

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

Helen Austin performing with Trent Freeman at the 2018 Vancouver Island MusicFest. Austin is one of the many performers listed for the 2021 event.
Vancouver Island MusicFest goes virtual for 2021

Black Press to stream 25 hours of programming July 9-11

FILE – A science class at L.A. Matheson Secondary in Surrey, B.C. on March 12, 2021. (Lauren Collins/Surrey Now Leader)
Teachers’ union wants more COVID transmission data as B.C. prepares for back-to-school

BCTF says that details will be important as province works on plan for September

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Provincial health officer Dr. Bonnie Henry outlines B.C.’s COVID-19 restart plan, May 25, 2021, including larger gatherings and a possible easing of mandatory masks on July 1. (B.C. government photo)
B.C. records 120 new COVID-19 cases, second vaccines accelerating

Lower Pfizer deliveries for early July, Moderna shipments up

A Heffley Creek peacock caught not one - but two - lifts on a logging truck this month. (Photo submitted)
Heffley Creek-area peacock hops logging trucks in search of love

Peacock hitched two lifts in the past month

The Calgary skyline is seen on Friday, Sept. 15, 2017. THE CANADIAN PRESS/Jeff McIntosh
2 deaths from COVID-19 Delta variant in Alberta, 1 patient was fully immunized

Kerry Williamson with Alberta Health Services says the patients likely acquired the virus in the hospital

The first suspension bridge is the tallest in Canada, with a second suspension bridge just below it. The two are connected by a trail that’s just over 1 km. (Claire Palmer photo)
PHOTOS: The highest suspension bridges in Canada just opened in B.C.

The Skybridge in Golden allows visitors to take in views standing at 130 and 80 metres

BC Green Party leader and Cowichan Valley MLA Sonia Furstenau introduced a petition to the provincial legislature on Thursday calling for the end of old-growth logging in the province. (File photo)
BC Green leader Furstenau introduces old-growth logging petition

Party calls for the end of old-growth logging as protests in Fairy Creek continue

Most Read