EDITORIAL: Tax on foreign buyers is a step toward affordability

New tax shows politicians are paying attention to a complex issue

Starting Tuesday, foreigners will have to dig deeper into their wallets and off-shore bank accounts to buy real estate here.

For that run-of-the-mill $1-million property in South Surrey or White Rock, an international buyer will be forced to cough up an extra $150,000 in tax. That $5 million luxury home? That’s an extra $750,000.

Will this tax cool the white-hot market? Likely. But the real estate will still be a hot commodity, especially since the majority of buyers are from Canada.

Will this tax improve housing affordability? Doubtful. But at least the tax shows politicians are paying attention to a complex issue that should be top-of-mind for all levels of government now and in the future.

If the current pace of buying by foreigners continues, the new tax would generate an additional $1.4 billion in property transfer tax for the province. That’s a lot of dough, and Finance Minister Mike de Jong did say this week that that money could support affordable housing and rental-assistance programs in the future.

But the insatiable demand for housing in Metro Vancouver and elsewhere in B.C. isn’t about to go away. If Expo 86 put us on the map, the 2010 Olympics cemented our place on a list of most desirable places to live in the world.

That’s why the affordability of housing – perhaps our second-greatest need as humans – can no longer be an afterthought by policy-makers. It needs to be given weight in all decisions as governments build and improve our communities.

Indeed, the issue is complex. For some, an affordable home is having enough money to rent a simple basement suite. For others, it’s being able to buy an apartment near White Rock’s town centre. Still others interpret affordability as a single family home in a nice neighbourhood.

This suggests a range of options and policies are key in shaping our community’s future and ensuring a bright mix of people comprise it.

Many market observers agree this new tax on foreign buyers will slow the rapid rise in housing costs. Critics, however, have noted multiple weaknesses in the tax policy – namely that foreign buyers will find workarounds to avoid the tax, and that it doesn’t address foreign buyers who arrive via the Quebec Investor Immigration Program.

Undoubtedly, governments can make more moves to improve affordability. A progressive property surtax has been suggested, along with the cancellation of the Quebec investor program, and cracking down on tax evasion and money laundering.

The affordability question won’t be answered overnight. But B.C.’s new 15 per cent tax shows government is finally paying attention. Now that attention needs to hold.

Just Posted

VIDEO: Surrey Vaisakhi Parade floods Newton streets

Hundreds of thousands of people attended the annual event

Setting the stage for emerging performers

Variety fundraiser and ongoing open-mics showcase local talent

VAISAKHI EXPLAINED: Founding of the Khalsa was a seminal event in Sikh history

There are five K’s – articles of faith – worn by baptized Sikhs

Four Surrey students head to New Brunswick for Canada-wide science fair

Three projects move to nationals following regional fair at KPU

Man ‘seriously’ injured in crash after driving wrong way on Highway 17: Surrey RCMP

Police say the sedan hit a transport truck, then another car

Dashcam captures close call between minivan, taxi at busy Vancouver intersection

To make the footage more nerve-wracking, a pedestrian can be seen standing at the corner

Deck collapses in Langley during celebration, 35 people injured

Emergency responders rushed to the Langley home

B.C. mom wages battle to get back four kids taken from her in Egypt

Sara Lessing of Mission has help from Abbotsford law firm

VIDEO: Fire guts Peachland home

Crews are still on scene pumping water onto the blaze in the Okanagan neighbourhood

$6K raised in one day’s time for family of woman gunned down in Penticton

GoFundMe launched for family of Darlene Knippelberg, to pay for funeral costs and other expenses

B.C. mountain biker sent home from hospital twice, despite broken vertebrae

Released in Maple Ridge to go home with three fractured vertebrae

Seven tips to travel safely this Easter long weekend

An average of three people are killed, and hundreds more injured, each Easter long weekend in B.C.

Seattle’s 4-20 ‘protestival’ enjoys tolerance, some support – and B.C. could do the same

Seattle’s Hempfest a large-scale occasions with vendors, prominent musical acts and thousands of attendees

Parents say Austrian climber missing in Banff National Park ‘lived his dream’

David Lama, Hansjorg Auer and American climber Jess Roskelley have been missing since Wednesday

Most Read

l -->