Victoria council asks B.C. for foreign speculators tax
Victoria council is calling on the province to immediately impose a 15 per cent non-resident buyers tax here to cool what has become one of the three hottest real estate markets in the country.
The request comes after what some councillors see as the success of the same foreign buyers tax imposed last fall in Vancouver and as Ontario Premier Kathleen Wynne announced a 15 per cent foreign buyers levy in the Toronto area.
“We all know that we have a housing crisis and that the cost of home ownership and rent is getting higher and higher and the dream of home ownership is getting further and further away for many of our residents,” said Coun. Jeremy Loveday, who sponsored the resolution with Coun. Ben Isitt.
“This is asking for action to be taken so that our residents can afford homes here.”
Isitt said there’s increased urgency to bring the tax to the Victoria, given the other two hot areas, Greater Vancouver and Greater Toronto, will have the tax.
This week, Bank of Montreal chief economist Doug Porter said there is no question the Vancouver tax is affecting the Victoria real estate market. Porter noted in a Financial Post article that Victoria is the only city outside of Ontario with a double-digit percentage average price gain in the past year, with the home price index up 20 per cent year over year.
But several councillors worried the non-resident levy will be viewed in the same light as the head tax imposed on Chinese immigrants by the federal government between 1885 and 1923.
“I really think we may end up being seen to be on the wrong side of history on this one,” Coun. Geoff Young said, adding that the head tax was a popular measure in its day. “It [the head tax] wasn’t primarily implemented for racial purposes, I don’t think. It was because people felt that new immigrants were presenting competition for jobs. It was an economic impulse,” Young said.
Real estate agent Tony Joe, who in January wrote to Victoria opposing the tax, said it simply is not needed here. “The tax was in [place in] Vancouver in August and it did not cause a spike in foreign interest over here in Victoria.
“The reality is that the people that were doing the speculation or land banking in Vancouver were only looking in Vancouver,” Joe said, adding that Vancouver and Toronto are global cities while Victoria is not.
The vast majority of people buying properties in Victoria are not holding them vacant but are moving here, he said. He said the tax is not unlike the head tax. “Why call it a foreign tax. Why don’t we just call it a Chinese tax?” he said.
Mayor Lisa Helps said the non-resident tax should not be seen as anti-immigrant or racist but rather as a “speculative tax.”
The B.C. government announced in January that the tax does not apply to people with work permits, Helps noted. “This does not apply to people who are becoming residents of British Columbia — who are becoming residents of our communities.”
Young said the idea that a tax can be limited to speculators is a faint hope. “Basically, anybody who buys a property is speculating.”
Coun. Marianne Alto said she agreed with the intent of the tax and efforts to try to solve “an extraordinary extreme crisis.” But, she said: “I have to say that the identification of foreigners in this case makes me very uncomfortable.”
Coun. Margaret Lucas said she doesn’t believe “there’s a lot of evidence yet to tell us that this has been the solution.”
Last week, Capital Regional District directors postponed a decision on whether to ask for the tax to be imposed until their municipal councils weigh in. Several directors argued that municipalities such as Langford, Sooke and Metchosin aren’t facing the same affordability issues and escalation in housing prices that Victoria has.
Victoria’s resolution, passed Thursday, asks the province to immediately impose the 15 per cent tax to curb speculative property purchases by non-residents in either the entire capital region or in just the city of Victoria, whichever is more expedient.