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UBC economists recommend a surtax on vacant properties, as the call for new strategies to moderate housing speculation grows

January 19th, 2016 · 22 Comments

As likely most of you who read this blog know, a group of UBC and SFU economists and/or business professors put out a joint statement yesterday calling for a tax on vacant homes. That follows an interesting op-ed piece published last week by SFU public-policy prof Rhys Kesselman for a surtax on expensive properties whose rate would increase with the price of the property. And that follows calls by Mayor Gregor Robertson for a speculation tax or luxury tax.

The clever piece of the various professors proposals is that they say that the surtax would be reduced or eliminated as long as the property owner has declared local income and paid taxes here. So it would be targeted to anyone who uses Vancouver as a vacation camp: Americans, Brits, Russians, you name it. If I’ve understood it correctly, it could even apply to, say, the many Albertans who own summer cabins in Kelowna and the rest of the Okanagan or the Vancouverites who have summer cabins in the Gulf Islands.

It’s been interesting to see the raft of defences and “oh, that can’t work” from the other side. Real-estate marketer Bob Rennie said it would kill foreign investment in everything, since it would inevitably lead to a tax on foreign investment in manufacturing or other sectors. (Never heard of that in other jurisdictions with housing taxes.)

The mystery documents from the finance ministry surfaced again, claiming it would kill off $1 billion and 4,000 jobs related to construction. (Puzzling claim, since this surtax wouldn’t affect, say, foreign investors who are putting capital into major construction projects.)

And Premier Christy Clark claimed again that somehow this could end up targeting seniors who spend part of the year in the hospital or vacationers. Yet the proposal clearly stated that people who do or have contributed to the local economy (in other words, people collecting pensions) would be exempt.

It’s almost like someone is just trying to confuse the public.

My Globe story here. Oddly, the link to the actual proposal on the UBC site is not functioning.



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