Higher tax on luxury home sales urged

Vancouver Mayor Gregor Robertson pushes premier for Property Transfer Tax hike, speculation tax, more civic powers

Premier Christy Clark has been formally asked by Vancouver Mayor Gregor Robertson to make tax reforms to help control real estate speculation.

Premier Christy Clark has been formally asked by Vancouver Mayor Gregor Robertson to make tax reforms to help control real estate speculation.

Vancouver Mayor Gregor Robertson wants the province to add another step to the Property Transfer Tax to hit luxury homes harder when they change hands.

That request and other potential proposals to discourage home-flipping and absentee ownership are contained in a May 22 letter to Premier Christy Clark released this week.

The Property Transfer Tax now charges one per cent on the first $200,000 in property value when a home sells and two per cent after that. It currently adds up to $19,000 on the sale of a $1-million house, and generates more than $900 million a year for the provincial government, flowing into general revenue.

Robertson wants a higher transfer tax “on the most expensive properties” – he didn’t specify how much higher or at what threshold it should kick in – with the proceeds of the high-end increment instead earmarked for affordable housing investment.

He said housing should not be treated “solely as an investment commodity” for the world’s wealthiest citizens, who park their money in Vancouver houses and may leave them empty.

He said rapidly rising prices “are creating despair” among middle-income people with good jobs who struggle to find quality rentals and “who are not even within shouting distance of being able to buy.”

RELATED:Big majority backs absentee homeowner tax: Poll

Besides Property Transfer Tax reform, Robertson proposes undefined tax measures to discourage quick resales by flippers to reduce speculation.

He also proposes the province give cities the power to “track property ownership and ensure timely occupancy of vacant units.”

“These measures would help moderate the excesses of the Vancouver housing market, without unfairly punishing those who have built up home equity through hard work and personal savings,” Robertson said.

He said the policies would slow surging prices that threaten Vancouver’s ability to keep and attract “the best and brightest” and would “send a signal that our housing is for living in, not for investor speculation.”

Finance Minister Mike de Jong has pledged to study options to address home affordability but with care to avoid reducing the equity existing residents have in their homes.

Clark as recently as February was talking about eventually phasing out the Property Transfer Tax, not increasing it.

Realtor associations have previously urged the province to lift the two per cent threshold to $525,000 so homes worth less than that are charged only one per cent.

The Property Transfer Tax has been unchanged since it was first introduced as a wealth tax 29 years ago, and many more transactions have become subject to the two per cent increment as prices rose.

Higher PTT would punish farmers: Realtor

Jorda Maisey, president of the Fraser Valley Real Estate Board, said raising the PTT to punish Vancouver speculators could have severe unintended impacts on residents further afield, such as Fraser Valley farmers and other owners of larger acreages counting on tapping their property’s value to fund retirement.

“Our farmers are already having problems with the cost of farming and this could penalize them further,” Maisey said.

“Our concern is just bringing in another tax isn’t going to solve the problem [of speculators.] These people will just look at it as another cost of doing business.”

She said Vancouver-area property pressures don’t exist to nearly the same degree in the Fraser Valley.

Maisey also said the absentee owners of Vancouver condos that Robertson worries about are in many instances more local than some people think.

“It’s not all people from overseas,” she said, adding knows many Valley residents who own a second home in downtown Vancouver.

“They live in the Valley and they like to go into the city and spend time if they’re going to the theatre and not worry about having to come home.”

The benchmark price of detached houses in Greater Vancouver hit $1.1 million in May, up 14.1 per cent from a year earlier. Apartments were up 4.6 per cent from a year ago to $396,900.

In the Fraser Valley, the benchmark house prices were up 6.5 per cent from a year ago to $603,100. Apartments there were actually down 2.8 per cent from May 2014 to $192,500 last month.

House prices have risen the fastest over longer periods of time and in areas closest to Vancouver, where benchmark houses now top $2.5 million on the west side, more than five times the nearly $500,000 price in Maple Ridge.

Encourage small homes not monster mansions: Stewart

Coquitlam Mayor Richard Stewart, who chairs Metro Vancouver’s housing committee, said he’s unsure if tax changes are justified, noting the home owner grant is already a mechanism that effectively makes high-end homes pay more property tax than modest ones.

He agrees more work is needed to foster rental housing construction.

And he said cities should also do more to spur developers to build smaller homes, rather than the monster mansions that have been most lucrative as prices of higher end real estate climbed rapidly.

Stewart said too many quarter-acre lots in Metro suburbs are being built as huge 5,000-square foot houses, when four more modest houses could fit on the same lot as a bareland strata.

“I want us to explore ways to pursue both carrots and sticks to disincent the mansion in our communities,” he said. “Not prohibit it, but make it so it’s not the only profitable form of housing the builder can build and and to improve the profitability of some of the other forms were trying to advocate.”

Smaller homes around 1,400 square feet are more in keeping with the needs of a family, Stewart said, adding the higher density that results can help repopulate local schools and better support public transit.

Just Posted

Harrison Hot Springs country singer Todd Richard poses for a photo with Mission firefighters. (Photo/Sarah Plawutski)
VIDEO: Harrison country artist Todd Richard plans for a busy, rockin’ summer

Richard and his band look to live shows as restrictions start to lift

Special weather statement issued for Fraser Valley as first summer heat arrives June 20, 2021, and set to persist all week. (Photo by James Day on Unsplash)
Second day of hot temperatures rippling across Fraser Valley

Communities from Abbotsford to Hope will see daytime high maximum temps of 32 degrees

FILE – Perry Bellegarde, National Chief of the Assembly of First Nations, takes part in an event on Parliament Hill in Ottawa on Tuesday, July 7, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Indigenous Peoples Day must be a ‘call to action’, says Assembly of First Nations chief

Discovery of children at Kamloops residential school site must lead to change, Perry Bellegarde says

The theme for this year’s Fraser Valley Regional Library Summer Reading Club is “Crack the Case” and Katie Burns, community librarian at the Chilliwack Library, is encouraging people of all ages to sign up. She is seen here at the Chilliwack Library on Friday, June 18, 2021. (Jenna Hauck/ Chilliwack Progress)
Crack the case, read, win prizes with FVRL Summer Reading Club

‘Immerse yourself in other worlds and have a bit of fun while you do it,’ says Chilliwack librarian

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

Investigators use a bucket to help recover human remains at a home burned in the Camp fire, Thursday, Nov. 15, 2018, in Magalia, Calif. Many of the missing in the deadly Northern California wildfire are elderly residents in Magalia, a forested town of about 11,000 north of the destroyed town of Paradise. (AP Photo/John Locher)
‘Forever War’ with fire has California battling forests instead

Five of the state’s largest-ever blazes seared California last year, as authorities tackle prevention

Tokyo 2020 President Seiko Hashimoto and IOC President Thomas Bach, on a screen, speak during a five=party online meeting at Harumi Island Triton Square Tower Y in Tokyo Monday, June 21, 2021. The Tokyo Olympics will allow some local fans to attend when the games open in just over a month, Tokyo organizing committee officials and the IOC said on Monday. (Rodrigo Reyes Marin/Pool Photo via AP)
Tokyo Olympics to allow Japanese fans only, with strict limits

Organizers set a limit of 50% capacity — up to a maximum of 10,000 fans

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
Border quarantine to soon lift for fully vaccinated Canadians

Eligible travellers must still take multiple COVID-19 tests

A portion of the George Road wildfire burns near Lytton, B.C. in this Friday, June 18, 2021 handout photo. THE CANADIAN PRESS/HO, BC Wildfire Service *MANDATORY CREDIT*
Blaze near Lytton spread across steep terrain, says BC Wildfire Service

Fire began Wednesday and is suspected to be human-caused, but remains under investigation

(Black Press Media files)
Burnaby RCMP look for witnesses in hit-and-run that left motorcyclist dead

Investigators believe that the suspect vehicle rear-ended the motorcycle before fleeing the scene

Blair Lebsack, owner of RGE RD restaurant, poses for a portrait in the dining room, in Edmonton, Friday, June 18, 2021. Canadian restaurants are having to find ways to deal with the rising cost of food. THE CANADIAN PRESS/Jason Franson
Canadian restaurateurs grapple with rising food costs, menu prices expected to rise

Restaurants are a low margin industry, so there’s not a lot of room to work in additional costs

RCMP crest. (Black Press Media files)
Fort St. John man arrested after allegedly inviting sexual touching from children

Two children reported the incident to a trusted adult right away

Most Read