This week, a tax reform plan targeting speculators was released by the B.C. Government and Service Employees’ Union (BCGEU) as a solution to the lack of affordable housing in the province.
The document starts out by highlighting speculative investment as one of the main causes of rising real estate prices in British Columbia.
The proposed reforms aim to achieve 6 goals
- Reduction in speculation
- Stable real estate prices
- The restoration of fairness and equality in the housing market
- Generation of revenue for investment in affordable housing projects
- Broader access to public housing
- Reduction of economic risk as a result of excessive lending, household debt and inflated prices.
Strategies discussed in the plan
The proposal plans to utilize tax reforms, legislation amendments, and investments in public housing as a means to achieve the goals listed above.
One of the ideas is to tax speculators and developers if the value of their land increases due to nearby public projects like new schools, or transit lines.
Another aspect of the proposal targets speculators directly – particularly those who hoard land and hinder development – by placing an additional progressive surtax on top of annual property taxes, reforming property transfer taxes and the foreign buyers tax, as well as taxing short term rentals.
The revenue collected from these new taxes would then, according to the report, be invested in public housing and infrastructure projects.
The Finance Minister responds to the report
According to a CBC news report, Finance Minister Carole James thanked the union for their work on the proposal, and stated that the housing crisis is top priority for B.C.’s 2018 budget.
“Together with the housing minister, I am working on a long-term, comprehensive housing strategy that addresses all aspects of the market,” James told CBC news.
“We are looking at ways we can close speculation loopholes and improve fairness in the market, so that people can find affordable housing in the communities where they live and work.”