UBC Economist Proposes 1.5% Property Surcharge
It’s no secret there’s some serious outrage amongst Vancouverites over foreign investment and people leaving properties vacant. Thus reducing the overall supply and creating even more demand. I have personally been very open about the pressing issues regarding the vast amount of foreign money entering Vancouver. The lack of restrictions and tax loopholes are making life easy on foreign investors.
The recent tax proposal of a 1.5% surcharge to all Vancouver homeowners is exactly what we need. The recent proposal by Thomas Davidoff a UBC economist who aided Barrack Obama on housing policies proposed a 1.5% tax surcharge to every homeowner in BC. However, anyone who pays income tax would be able to deduct the surcharge upon filing their taxes. Anyone who is renting out a property and submits their rental income would also be able to submit it for a property surcharge write-off. This means the only people who would be required to pay the 1.5% surcharge are the foreigners who work overseas and leave properties vacant or who don’t pay taxes here, or any investor who leaves a property vacant would also be subject to the property surcharge.
This proposal satisfies Christy Clark’s statement of refusing to implement anything that may devalue home prices and risk the equity Vancouverites have in their homes. The implementation of this surcharge would not deter foreign investment but it would hold them accountable to rent it out instead of leaving it vacant and would also make them pay their fair share of taxes. The surcharge would generate an estimated 90 million which could be used towards helping hard working Vancouverites enter the housing market.
I have been stating for awhile now that something like this needs to be done and thankfully the economists seem to have it right this time. Obviously it’s not going to cure all the housing problems Vancouver is currently facing, however it’s a start. Let’s hope Christy Clark and the rest of the gang don’t drop the ball on this one. It may be the best chance we have to making housing somewhat more affordable.