Quote:
Originally Posted by hillbillyreefer
A 1% increase in property taxes isn’t going to discourage anything. Property values in Vancouver are increasing at 15-20% per year, even adding the tax the ROI is staggering. This isn’t the kind of market even little guys can get in on and make a few bucks, but in true Canadian fashion the opportunity needs to be destroyed.  |
1% is fine for the introduction of the tax. You cannot add a 10 or even 5% of estimated property value tax for vacant properties because it would create a very real risk of blowing up the housing market. If introduced, all of the foreign investors would not only stop the purchasing (and thus killing demand), but would likely begin dumping their houses onto the market, causing a domino effect on first the local housing market areas, and then possibly the entire house of cards. People have been speculating that Canada is in a housing bubble for ages now, and something like that would be a sharp needle shooting right at it.
At 1%, it shows the government is no longer willfully ignorant about what is going on, and is no longer interested in having Vancouver/surrounding area's residents being gentrified out of their own city because of wealthy foreigners using the real estate as safe and high return investment vehicles. Ideally if the tax does not provide any disparagement in FDI into Van real estate, you up the tax incrementally until it does, or bring in another tax.
I am no fan of having the government involved in dictating what you can and cannot do with private property owned by citizens, but similarly to how zoning laws exist, the pros seem to outweigh the cons. Besides, if executed correctly, I don't really see how any law abiding Canadian citizens will be really affected by this. Allow exemptions within the tax for snowbirds and vacation homes owned by Canadian citizen's with proven Canadian full-time residency elsewhere in Canada, and perhaps some other conditions I have not yet considered, and it seems logical to me.
You can all cry wolf about the government taking your property rights, but something needs to be done about what is happening in Vanouver/Toronto/elsewhere, otherwise we as Canadians are going to be completely priced out of our own housing markets. Great for boomers who are betting on their house value appreciating as their retirement plan, brutal for anyone else.