VANCOUVER — Special to The Globe and Mail
A new housing tax proposed this week by West Vancouver’s mayor that targets non-residents would be “discrimination,” says Vancouver Mayor Gregor Robertson.
Mr. Robertson said he doesn’t support a property tax that’s applied based on nationality when the real problem involves how housing is being used.
He also said he prefers the vacancy tax that Vancouver is planning to implement, which will be strictly aimed at people leaving properties empty because they’re holding them as an investment. But, he said, all mayors in the region really want the same thing: to ensure that housing is well used and to limit the flow of speculative global capital.
“Our focus needs to be on regulating the capital and on people holding properties that are empty for business purposes,” he said.
Mr. Robertson said no one tax or city policy is going to bring about the change needed to ensure the region’s housing is not caught up in a speculative bubble.
The issue of some form of taxation on certain property owners has been a hot topic after the mayor asked the B.C. government for the power to impose a vacancy tax, a speculation tax and a luxury tax in the face of rapidly escalating housing prices, which jumped by 30 per cent in the region in a single year. At the same time, the public conversation has been flooded with stories about vacant properties and speculators flipping houses.
The province plans to clear the way for Vancouver’s vacancy tax during a special session of the legislature next week, and B.C. Finance Minister Mike de Jong has signalled he is open to the possibility of allowing similar taxes in other communities.
Since then, West Vancouver Mayor Michael Smith has said he thinks that kind of tax would be difficult to enforce. Instead, he’s asking the province for a non-resident tax that would be applied to anyone not using their house as a principal residence. It would apply to Canadian citizens owning homes as vacation properties or as investments, as well as to any non-citizens owning property. Mayors from North Vancouver, Burnaby, Coquitlam and Surrey have come out in support of that approach.
But Mr. Robertson said a vacancy tax won’t be as complicated as critics think, as long as the province gives the city access to the data it needs. City and provincial staff teams are negotiating now over what kind of data the city will be able to access.
The mayor said it would likely include information on who gets homeowner grants, what rental income is declared on the income-tax forms of property owners, drivers’ licence information and possibly electricity-use information. That would help pinpoint a potentially vacant house.
For example, if a homeowner was not collecting the homeowner grant, or showing any indication of rental income, that would put a house on the list of possibilities to be checked. That won’t work with homes worth more than $1.1-million, because the owners aren’t eligible for the homeowner grant, so other data sets would have to be used.
“The final step on verification and enforcement is still to be determined,” Mr. Robertson said, adding that he’s confident the province will work with the city, because otherwise the tax would be unworkable.
“It would be difficult without access to the province’s data,” he said.
The city had hoped that the government would empower the B.C. Assessment Authority, which calculates the value of all properties in the province, to create a “residential-vacant” category and use provincial information to determine what was likely vacant.
The government declined to do that, saying it would leave it up to the city to create and enforce a new vacant-home tax once new legislation provides that power.
Mr. Robertson said the speculation and luxury taxes are still needed, along with vigorous Canada Revenue Agency action, to catch people trying to flip houses, while avoiding taxes on their profits by claiming they are principal residences.