Premier John Horgan and Finance Minister Carole James say the government is still working out the details of a new speculation tax on B.C. properties.
It’s a discussion their colleagues in the legislature will be keenly interested in, as many of them own two or more homes in the province.
Horgan said the government has delivered on its promise to put in place a speculation tax. But the announcement has sparked concern from owners of vacation homes who fear a hefty tax bill.
“We haven’t laid out the details,” Horgan said. “Now we’re making sure the minister of finance, with the assistance of British Columbians, will be able to fine tune that so we realize the objectives of the tax and also go forward in a way that makes sense to people.”
The February budget included a speculation tax that will be effective for the 2018 tax year. The government said the tax would initially apply in Metro Vancouver, the Fraser Valley, the Capital and Nanaimo Regional Districts, and the municipalities of Kelowna and West Kelowna.
The tax was to target properties owned by people who don’t pay income tax in the province. It will be $5 per $1,000 of assessed value this year and in 2019 will rise to $20 per $1,000 assessed value.
That means that someone with a $1-million property covered by the tax would be looking at a $5,000 tax bill for 2018 and $20,000 in 2019.
“This tax will target foreign and domestic speculators who own residential property in B.C., but don’t pay taxes here, including those who leave their units sitting vacant,” materials released with the budget said.
The tax is a bold measure, [Carole James] said. “We want to get speculation out of the market. We know it’s a problem in our housing market. We know we have to address it. We know British Columbians expect us to address it. It was ignored by the previous government. We’re acting on it.”
That action could affect dozens of the province’s 87 MLAs and their families based on their public financial disclosure statements. The statements also give a window into how complicated many people’s real estate dealings are.
Horgan, for example, has a one-third interest in an investment property in Victoria. As long as it’s rented for the long-term he’ll be exempt from the speculation tax, but not if it’s sitting empty.
James owns not just the home she lives in, but she is also the joint owner with a family member of a second home in Victoria. Presumably that home is her relative’s principal residence, which would make it exempt.
But what about out-of-town MLAs who use the allowances — from $12,000 to $19,000 a year — provided for housing in the capital to help buy second homes? On the NDP side they include Bruce Ralston, Selina Robinson, Ravi Kahlon and Rachna Singh.
Shane Simpson and Scott Fraser each disclose owning a half share in a Victoria home and principal residences elsewhere. Fraser also owns an investment property in Parksville. Leonard Krog has an investment property in Victoria and a recreational property at Black Creek.
Claire Trevena owns a second home in Victoria and an investment property on Quadra Island. Spencer Chandra Herbert owns a second home in Victoria, but also has an investment property in Vancouver and a 50-per-cent interest in a recreational property in West Vancouver.
Michelle Mungall owns a second home in Victoria, two investment properties in Nelson and a third in Castlegar. All three investment properties are outside the regions where the new tax is to apply.
David Eby, by the way, owns a home in Victoria, but not in Vancouver where the constituency he represents is.
On the Liberal side, MLAs owning a second home in Victoria include Marvin Hunt, John Yap, Mike Bernier, Ralph Sultan and Jordan Sturdy.
“There’s no consideration around ‘special’ for one group or another,” James said when asked how the new tax may affect MLAs with second homes in Victoria. “We’re going to look at all of the questions and issues that have come forward and we’re going to make the decisions and bring the implementation forward.”
Among the Greens, Andrew Weaver owns a recreational property in Parksville and two investment properties in Victoria. Sonia Furstenau’s spouse has an investment property in Victoria.
Several MLAs also have recreational properties. Cabinet minister Judy Darcy has a recreational property on Mayne Island, which is included in the areas where the tax will apply. NDP MLA Janet Routledge owns a recreational property on Mayne Island and a timeshare in Whistler.
Peter Milobar shares with family members a cabin on Shuswap Lake. Greg Kyllo and spouse have a 50-per-cent interest in a recreational property at Silver Star in Vernon.
Others hold investment properties that are likely rented out. Bob D’Eith’s spouse has an investment property in Langley. Raj Chouhan’s spouse has a one-third interest in a Burnaby property. Teresa Wat owns an investment condo in Vancouver. Norm Letnick’s spouse has an investment property in Kelowna. Mike de Jong has an ownership interest in half a dozen investment properties in Abbotsford.
And then there are the oddities, situations where it’s unclear what would count as a principal residence and what wouldn’t. Michael Lee lists ownership as a trustee for a family member on a house in Vancouver (other than his residence), as does his spouse. His spouse also has a one-seventeenth interest in agricultural property in Langley.
Anne Kang and her spouse each own residential properties in Burnaby. Katrina Chen co-owns a residence in Vancouver with family and has a second home in Burnaby with her spouse. Ian Paton owns a home in Delta while his spouse owns one in Abbotsford.
George Heyman has a house in Vancouver, but with his spouse has a second house in Vancouver and a recreational property at an unspecified location in B.C.
Other properties are unlikely to be affected. Katrine Conroy has grazing land in the Kootenays, for example. John Rustad owns a wood lot license and four other pieces of rural property.
Several MLAs have interests in properties that are clearly out of reach of the tax. Doug Clovechok has an investment property in Calgary. Tracy Redies owns investment properties in Saskatoon and Virginia. Rick Glumac’s spouse has an investment property in Denver. Mike Farnworth has an investment property in the United Kingdom. Jagrup Brar has interests in properties in Alberta and India and Harry Bains has land in India.
– from ‘Many MLAs Have Personal Interest in Speculation Tax Hit’, Andrew MacLeod, The Tyee, 12 Mar 2018
Yeah, it’s everywhere, and everybody is going to have to pay their fair share of the tax until the speculation is knocked out of the market.
What a complete mess, and it was all engineered and manufactured by corrupt politicians and central bankers.
There never is a good time to rip off the Band-Aid. You’ve just got to grit your teeth and do it.
We reap what we sow.
– State subsidies, cheap debt, and fear/greed akin to fog shrouding the Titanic
– Speculation taxes akin to re-arranging deck chairs
– Market forces akin to iceberg
– Bulls akin to guy sleeping in his chamber as ship sank, then pushing aside women and children to get on life raft
Great, now I have that Celine Dion stuck in my head.
Only people taking vow of poverty with absolutely nothing to their names should be allowed to serve as MLAs! Right?!
Nobody is saying MLA’s should own nothing. I just wonder how many of these politicians (or anybody, for that matter) would have bought these second and third properties if they weren’t speculating on price appreciation. Yeah, sure, they just bought that pricey condo in downtown Vancouver so they could use it twice a year!
What a complete crash it will be, with bodies strewn everywhere.
Let’s say a government official has policy influence over industry X.
Assets in Industry X are heavily influenced by government policy and have averaged ~10% increases for over a decade.
Let’s also say that government official with policy sway has high 6 figure or 7 figure holdings in Industry X.
In ANY sector besides real estate, this would have a lot of sensitivity around potential conflicts and, as cynical as I am, I believe politicians of all stripes would be very careful in their handling of this.
For real estate? We very recently had a guy like Mike de Jong, who definitely had sway on policies affecting real estate, holding half a dozen pieces of BC property spouting off about how people should move if they don’t like this affordability situation.
The jealousy narrative around the affordability crisis here has been bankrupt for years. And the “poor me” arguments of people affected by recent changes (see: Tha, David) are spectacularly risible.
Your assertion is a non sequitur, as no one is calling for anything close to it. You continue to choose to have a massive blind spot about the very real potential for conflict on this topic.
Oh – and check out Rick in this article:
Guess who he’s related to. Wonder what his holdings look like.
These guys are just talking their book and it is a tale of self-interest. Consideration about the wider long-term implications of this affordability mess for the functioning of this province are not part of the consideration.
no. but decision makers need to be accountable, in the sense that they have exposure to the negative consequences of their actions. societies are long-term stable if yes and NOT, if no. see taleb – skin in the game – for an excellent meditation on this concept.
they’re even messing with the concept of siberia … https://tinyurl.com/y99ffxy6
Rich offshore speculators chose Vancouver not for its stunning beauty and stable political system, but for its casual acceptance of property speculation.
not casual acceptance of ppty speculation … outright courtship of criminal money flows
@Royce @backwardation @white_angelo – I’m confused…are you guys criticizing MLAs for heavily involved in RE which most regular / moderately successful people often are? NDP took measures that will / hopefully crash RE prices and push it through, so is this a sign to you that MLAs even though in potential conflict is taking a hit for the greater good? Or are you guys think MLAs are avoiding the bitter medicine?
I’m confused here as to what the point of this post and replies. What points is VREAA & you guys are trying to say?
q1 -what is the job/duty/responsibility of an mla? … q2 – does their asset portfolio put them in a significant misalignment wrt to q1? … that is the principle at least … https://tinyurl.com/nf4ymap
So are people saying the current NDP MLAs are incapable of doing their jobs & duty to BC with regard to housing affordability due to their RE investments, and the NDP’s housing plan is proof of that?
that’s a little nutty … no one said that … however, you could recognize that, among other things, the former premier and cabinet minister actually toured asia to sell rmb-denominated bonds … conjecture: vcr is hyper-desirable, to borrow arnie’s term, because it encourages white-collar criminals to ‘bank’ here via real estate … the poli’s can be bought for cheap … it has become THE local industry … to fix it, just start enforcing laws that already exist … don’t need a housing plan or new taxes … but which have the will to do that? … otoh, they may not need to, the global leverage party is ending … rates have bottomed and turned, bubble assets have started going sideways instead of up, and the leaders are even crashing … fb another lead dog just got take out this am … multiple confirmatory signals fwiw – take it or leave it
[MacLeans] – Vancouver real estate is so crazy construction workers have to live under Skytrain tracks
“Vancouver’s real estate circus is driving even decently paid tradespeople to live in illegal encampments. So far, the city is turning a blind eye.”
[LATimes] – ‘Castaways’ in motor homes feel stranded on society’s fringe
…”In 1979, the recreational vehicle manufacturer Winnebago proudly touted its latest models in glossy magazines with splashy full-page ads proclaiming their coaches to be “A Condominium That Goes Places at About Half the Going Price.”
Today, many old and battered Winnebagos number among the thousands of motor homes that line the streets of Los Angeles, from the San Fernando Valley to the Westside to the Harbor area. In a region where rents and home prices skyrocket year after year, recreational vehicles now qualify as residences for people who would otherwise be homeless.”…
just have to stop looking the other way and this thing unravels fast-fast-fast … https://tinyurl.com/yb8kgwvy
2836 45th Ave E: bought mid-2016 for $1.8M. This tarted up turd can now be yours for $2.288M. Situated on the massive Killarney Bog – nice and close to unstable soil. That ominous sucking sound is either your wealth disappearing, or subduction when the big one hits. No view; nowhere near Skytrain; one of the most boring areas of Vancouver – until the big one comes.
[WesternInvestor] – Prices paid for office strata defy logic: Deals for Metro properties disconnected from potential income, industry insider says
…”A real estate conference aimed at explaining Metro Vancouver’s runaway commercial strata market concluded that prices defy logic but will likely keep increasing.
“Strata office prices are disconnected from lease rates,” Matthew MacLean, senior vice-president at Cushman Wakefield, said March 1 at the Urban Development Institute meeting in Vancouver…
…In Burnaby’s Metrotown, Sun Towers, the first commercial strata project in Metro Vancouver by a China-backed developer, is selling 100,000 square feet of commercial space, with retail from $2,600 per square foot and office space from $1,300 per square foot. All 285 residential condos in the mixed-use Sun Towers complex sold out at prices from $488,000 to more than $1.1 million per suite.
Ninety per cent of all the buyers were of Chinese descent, said Cam Good, president of Key Marketing.
Investors, he suggested, are often “second-generation” Canadians, often representing family businesses, who are buying for future appreciation, not for income.
“They buy for the lift and that is all they care about,” he said. “It is strictly a capital gain.”
Commercial real estate is attractive to offshore real estate investors, suggested MacLean, because, unlike residential, there is no 20 per cent foreign-buyer tax.
“There has been a massive shift to strata commercial,” MacLean told the conference.”…
So on one hand, we have Cam Good saying most of the commercial strata is bought by second generation Chinese running family business who are looking for a capital appreciation. Instead of the more logical explanation of securing a place of biz and not having to worry about be kicked out by exorbitant rent increases that have been making the news lately.
And then we have MacLean speculating that it’s the offshore buyers, despite printing the part about buyers being local Chinese family business owners / owners in waiting.
Yeah, how can we do without this kind of insightful analysis?!
The more interesting story is how Bosa and Westbank bought West End property three years ago for $47M and sold it to, oh god no, not to the Chinese, for $105M. The horror.
Or Wall Financial getting $160M for property they acquired for $83M just two years earlier.
How about the White Spot location near Stanley Park that sold for $245M to, you guessed it, the Chinese.
Lots of crocodile tears being shed.
But who is piping up about local billionaire bloodsuckers. Read all about it in their Globe & Mail. Just 99 cents a week. Subscribe now. They want your money, your life’s blood, and your respect. Bow down.
found this oddly appropriate … https://tinyurl.com/ycbjalqk
sorry, thiss too … https://tinyurl.com/yarht47p
4616 Slocan: Awesome 108-year-old Edwardian – languished in the market just over 5 years ago. Finally sold for $855K. Listed recently for $1.55M. Sold in a heartbeat. Crap west facing location to live in; on a busy street facing church propaganda, but a breeze to rent out thanks to Skytrain 2 minutes away; and the possibility of land assembly. A steal 5 years ago.
3031 20th Ave E: lipstick renoflip of the nadir of the old Van Spec. Bought 2017 for $1.45M. Listed by a no name rodent for $1.759M. Looks like the renoflipper and the agent are one and the same – one and the same vile real estate company with reviews consistently at the bottom, unless written by the jackasses that work there. Rodent states that the property is “better than new”. That’s absurd. Is that deceptive, or is it a lie. Location is infested with motorists twice daily with their precious cargo going to Nootka Elementary. Blech to the nth.
2670 25th Ave E: Bought 2015 for $876K. Listed at $1.399M. A typical post-war tract box tarted up. Soul-destroying basement rental; feeble staging; silly kitchen tile; unworkable kitchen; nice shots of the toilets. Habitable. Lot value.
5828 Lanark: article in the Garbage Globe & Mail about the sale of this ugly post-war tract box in this crap location with a crap east-west orientation. Doesn’t mention that it sits smack dab in the middle of the massive Dumfries Bog. Buyer will be surprised when he decides to build.
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Hey Arnie are you by chance a realtor – I’m not in the market right now but if I ever need to buy a house I’ll be contacting you first
Chile-con-Arnie has once again barfed all over this blog with his sociopathic rants. Nice.
Ninja takes a break from twerking with his dog …
hmmm … https://tinyurl.com/yanmqxy5
Vancouver has a history of being a phony. From the Gold Rush days, to penny stocks, to the drug trade, to real estate. It’s full of fraudsters, get-rich-quick schemers, and a financially illiterate populace. The fools who buy into the scam-du-jour always end up poor and disgraced. That’s the fate awaiting the bulls on this blog, and all over this rotten town.
3188 22nd Ave E: hard to say what’s more revolting – this property, or the toads selling it. Repellent. Ugly. Van Spec Dreck on a busy street promoted as custom built. That’s a lie.
Flanked by an alley with the butts of other houses peering in.
Refreshing in that there is no attempt at staging – clothes strewn about; an open toilet seat; a dog on the couch. Dim photos. Everything screams shithole.
And there’s a stream so close around it, cradling the back, that you’d better get some serious engineering input.
Assessed at $1.5M. Listed at $2.6M.
One could only hope for a land assembly scenario. You could die waiting.
2537 15th Ave E: over a million wasted building this pretentious grotesquerie in the Grandview Gully. A clueless embarrassment. Unspeakably undesirable. Custom caca. Buy it and show off to the neighbours what a rich tasteless goof you are.