It’s been just under six months since Metro Vancouver’s 15 per cent foreign-buyer tax was introduced, and by and large it’s been heralded as a success. Residential real estate transactions involving foreign buyers are down significantly, and so far the tax has generated $48 million for affordable housing initiatives.
Now, two Victoria City Council members are calling for the BC government to give Victoria and other municipalities in the Capital Regional District (CRD) the ability to instate their own foreign-buyer taxes. Councillors Ben Isitt and Jeremy Loveday say that they’re hearing “substantial concern from the public about the housing affordability crisis in [their] region,” and believe taxing foreign buyers could help.
They would also like CRD cities to have the ability to tax empty homes. Vancouver implemented Canada’s first empty homes tax at the beginning of 2017.
“We’re hearing that rental housing is going beyond the reach of many employees and their ability to pay,” Isitt told Gregor Craigie, host of Vancouver Island morning show “On the Island.” He added, “[w]e’re also hearing that affordable home ownership is increasingly out of the reach of ordinary people.”
A record 10,622 homes were sold in Victoria last year, the Victoria Real Estate Board says in its latest release. Home prices in the city also increased substantially in 2016, with the MLS Home Price Index benchmark coming in at $758,500 in December — that’s a 23.6 per cent increase from December 2015. “Your average buyer will face a competitive market,” outgoing 2016 President of the Board Mike Nugent comments in the release.
The ideas put forward by Isitt and Loveday will be debated at the next Victoria City Council meeting, scheduled for the evening of January 19th. They hope their fellow council members will agree to ask the CRD’s board of directors to support extending Vancouver’s empty homes and foreign-buyer taxes to the area. However, at least one board member has already expressed qualms about the proposal.
“I tend to support [the idea] that the market will correct itself — and we’re already seeing that. So I would hesitate in implementing a policy that really kind of got brought in on the fly,” said Barb Desjardins, chair of the CRD’s board of directors and mayor of Esquimalt. She added that it’s too soon to tell what long-term effects the foreign-buyer tax could have on Vancouver.
The BC government has not commented on whether it would consider extending either initiative outside Vancouver.