“Taxes bring unintended consequences,” Darcy McLeod, president of the REBGV, wrote in an op-ed in the Vancouver Sun
“There’s little to no evidence that a luxury or foreign buyer tax would make homes more affordable. History tells us that taxes like this fail to have the desired impact and succeed in permanently adding to government coffers.”
The president’s remarks come as Premier Christy Clark shot down the idea of a speculation tax
against property flippers as Vancouver home prices have increased nearly 80 per cent since 2005 while detached home prices have increased more than 100 per cent.
Vancouver mayor Gregor Robertson and others have raised concerns about the high cost of housing and the influence of both property flippers and foreign investors blamed for ballooning house prices.
Despite this, many Realtors have been against the idea, calling it ridiculous and anti-business. Others are convinced it is the best way to ensure a steady stream of future clients who can afford to live on the Lower Mainland.
Still, the president of the real estate board is the latest to speak out against measures and highlight past mistakes as reasons to stay away from future failures.
“In 1987, the provincial government implemented what was advertised as a wealth tax,” McLeod said. “It was supposed to apply to the sale of the most expensive five per cent of homes sold in B.C.
"It’s been 28 years since that tax was introduced and the thresholds have never been adjusted for inflation. Today, that tax is known as the Property Transfer Tax. It’s applied to 95 per cent of all residential property sales in the province. This tax makes housing less affordable.”
He also cited geographical limitations as a key reason houses have become so unaffordable. With mountains to the north, an ocean to the west and a border to the south, McLeod said that more supply isn’t a possibility with space limited.
“Affordability challenges exist but there are also more options and aspects to the story than is typically discussed in the media," he added. "There’s certainly more than the mayor is putting forward.”
The Real Estate Board of Greater Vancouver’s president spoke out against the proposed speculation tax that was ultimately rejected, arguing more taxes would do little to solve housing affordability issues in Vancouver.