Something had to be done, and it was. The open question now is what will be the impact of the province’s snap decision – a flip-flop of sorts – to impose a 15% surcharge on foreign-bought homes in Metro Vancouver.
A skeptic will note that any wealthy person wise enough to make millions is unlikely to not know how to circumvent the tax, so the proof of impact will be in the measures around the tax to ensure favourite Canadian cousins aren’t sudden homeowners. If the surcharge isn’t generating big revenue, we know their workaround is working.
But the tax is a step in the right direction.
For the BC Liberals, it has a few benefits: it adds to their menu of efforts to deal with the housing market without collapsing it, it targets the measure geographically to keep the pump primed in other parts of the province and it swipes a page out of the NDP playbook and gets to claim credit for the scheme.
If it proves effectively applied, and if it is combined with local taxes on non-resident home ownership – as all but Vancouver’s mayor appear to favour – it could bring the boil to a simmer.
But let’s face it: a 15% tax works out to about six months of appreciation on certain home values these days. This is not a bubble burster.
Taken as part of a larger picture, though, it insinuates government into the free market at about the right level.
The province has taken back regulation of the real estate industry to squelch cheating, and now it has taken action to tax those who treat Vancouver like a trophy in a room one never occupies.
What remains is to understand what it can do about affordability. That is a much, much tougher question.
