In today’s skyrocketing housing market, it’s easy to be envious of people who own two homes when so many people cannot afford one.
But envy does not make fair tax policy.
In its first budget, the NDP government introduced what it called a speculation tax. Speculative buying has indeed contributed to escalating house prices; sometimes a condo can be flipped two or three times before it’s even built.
But the two per cent tax on not-permanently-occupied second or vacation homes has nothing to do with speculation. It could be someone who owns a small cabin in the Gulf Islands or an SFU professor who lives on Bowen Island and keeps a small condo in Burnaby or a Calgary retiree who escapes winter at her condo in Kelowna. On a property worth $500,000, the new tax is $10,000 a year.
What if that cabin had been handed down from parents who bought it for $50,000? Just because it’s now worth 10 times more doesn’t mean that the family’s income has increased by 10 times. And that Calgary resident who winters in Kelowna is contributing to the local economy — buying groceries and going to local restaurants.
“These people are not speculators,” said board director Bill Veenhof of the Regional District of Nanaimo, which is calling for the tax to be repealed. “They are part of our community mosaic, they volunteer, they are our friends and many go on to retire here.”
It’s fair to tax people on their property’s value. After all, roads have to be maintained, garbage must be picked up, schools must be staffed. But to tax people year after year for simply owning a second property is punitive. Adding insult to injury, the tax affects only targeted areas: Metro Vancouver, the Fraser Valley, the Nanaimo and Capital Districts, including the Gulf Islands, and Kelowna and West Kelowna. (Why, by the way, wasn’t Whistler included?)
Address speculation, sure. Let envy sort itself out.
