Affordability in British Columbia should be tackled with a new tax on vacant properties and those owned by those with “limited participation” in the Canadian economy. Real estate economists at the University of BC and Simon Fraser University, including Tsur Somerville, Thomas Davidoff, and Joshua Gottlieb are calling on the provincial government to introduce a BC Housing Affordability Fund.
It would mean a 1.5 per cent surcharge on properties left vacant or owned by those who are not Canadian taxpayers. Therefore, a $1 million home would be taxed at $15,000 with the money added to the fund, which is projected to raise $90 million a year. “The goal is to support those living in parts of the province that have seen skyrocketing real estate prices, while also making our local markets less attractive to investors who wish to avoid taxation or park cash,” said Davidoff.
Most homeowners and landlords would be exempt from the surcharge. As an incentive to move unoccupied suites into the rental market, the policy also allows for owners to receive exemptions for rental income they receive from non-family members reported to the Canada Revenue Agency.
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