Like the title to Mark Milke’s excellent book (well worth a read) suggests, Canadians –born under the colonial mantra of “peace, order and good government” roll over again and again as the federal and provincial governments in this country systematically tax them to death.
The BC NDP’s latest shake down is called the “Speculation Tax.”
It follows on the heels of Vancouver’s “Empty Homes Tax,” a draconian measure that penalizes anyone with a property in that city who dares to leave it empty for more than 6 months a year (unless it falls within an exemption, such as a principal residence).
Although the BC government has not yet thought out all the details of the Speculation Tax which is set to come into law later this fall, it seems so far to be nothing more than an expansion of the Empty Homes Tax into other parts of British Columbia, including Metro Vancouver, the Capital Regional District (except the Gulf Islands), Kelowna and West Kelowna, Nanaimo-Lantzville, Abbotsford, Mission and Chilliwack.
It will tax owners from between .5% to 2% of the assessed value of their homes unless they are rented out for at least half the year.
This poorly conceived strategy does not take into account that most renters don’t want to rent for six months or less, so how that will increase the housing stock for non-owners is not immediately evident.
The Speculation Tax is estimated to bring in about $200M per year, with BC residents picking up about $60M and the rest being paid by out-of-BC owners.
No mention has been made as to what the $200M speculation tax revenue will be used for.
While it could be earmarked for social housing or other housing related initiatives, most governments simply take the dough, plunk it into general revenue and then use it as they please. I would put money on the latter option.
The ostensible justification for yet another tax is to address housing affordability by penalizing those who don’t pay taxes here, but own property which is not used in a politically correct way (i.e. rented out).
Rather than just exempt BC residents, the government is proposing a refundable tax credit, which may or may not offset the tax to be assessed against a BC resident’s property.
While it is clear that foreign (i.e. non-Canadian) money has destabilized BC real estate markets in BC for the past 15 years and the government has sat back and done nothing but encourage it (and collect billions of dollars of Property Transfer Tax in the process).
The Speculation Tax would be far more palatable if it JUST APPLIED TO NON-CANADIANS (or “foreign entities” as defined in the Property Transfer Tax Act).
Instead, the BC government seeks to penalize both British Columbians who own a second home as well as other Canadians with the Speculation Tax.
With no due respect, there is no justification to hose those who live in BC (and thus pay taxes here), nor those who live in Canada, who are our fellow county men and women.
This seems to me to be yet another tax grab –plain and simple.
It’s necessary to fund the NDP’s social welfare agenda at the expense of any BC or Canadian resident who has had the wherewithal to scrape up enough money to purchase a second property.
Clearly the NDP government of BC is ideologically opposed to both private property rights as well as the accumulation of wealth.
As with all levels of Canadian government, if the the BC NDP could govern half as well as they can think up new ways to pick taxpayers’ pockets, we would have few problems in this country.
Pazder Law Corporation
DISCLAIMER: The foregoing is not legal advice. Details of the BC Speculation Tax are at present few and far between. As several changes to the as yet non-existent tax have already been announced, what the final version will look like is uncertain.