Budget promises
B.C. Finance Minister Carol James will have the spotlight February 20 when she delivers the BC NDP’s first full-fledged provincial budget in 17 years. The past several months have seen the current government making the most of the allocations of its predecessor, acquainting itself with and assessing the depth of Victoria’s coffers.
Speaking to the Urban Development Institute (UDI) in Vancouver last November and in other venues, Premier John Horgan and Municipal Affairs and Housing Minister Selina Robinson have given many hints and a few promises about how taxpayers can expect their hard-earned dollars to be allocated.
Horgan spoke to UDI members about “the absolute urgency of bringing on new supply” and committed the province to working “hand in hand” with developers to deliver “thousands of homes.”
Ledingham McAllister Ltd. president and CEO Ward McAllister urged the province to give BC Housing more money if it’s serious about delivering 114,000 affordable homes over the next 10 years, but many developers say a lack of appropriate zoning and municipal staff will short-circuit any government funding.
This is where Horgan promised UDI last fall that the province would look into mechanisms that would support greater hiring at the municipal level so that developers didn’t walk away frustrated with city approval processes.
“[It] needs to be the responsibility of the province to make that seamless,” he said. “That may mean more resources to planning departments.”
To complement greater resources that make it easier for projects to receive municipal approval, the province is considering initiatives to encourage the right type of demand.
A provincewide tax on foreign purchases of residential property is possible to ensure a level playing field across the province.
“We want to make sure we’re doing this in a comprehensive way that tries to reduce, as best we can, speculation in the marketplace,” Horgan said.
During media availability after the UDI presentation last November, Robinson said she was working with James to address affordability concerns.
“You’ll certainly hear more about it in February,” she said.
Bull run
Should the coming budget expand the heightened property transfer tax on residential purchases by foreign nationals to municipalities across the province, will it enhance affordability?
Real Estate Board of Greater Vancouver data suggests the long-term impact will be minor.
When the province jacked the tax in Metro Vancouver in August 2016, benchmark pricing slipped for a mere five months. Today, prices are 14% higher than in July 2016 and 75% above November 2013 – the first month of what, save for the five months from September 2016 to January 2017, has been an uninterrupted bull run in residential pricing in Metro Vancouver.
Tax avoidance
Vancouver is ready to tax owners of under-occupied residential properties, but it sure doesn’t want to do it.
Since last summer, regular notices have warned homeowners to ensure residences are occupied and declarations submitted so they can avoid the city’s empty-homes tax. The efforts have exceeded any efforts to have property owners claim the homeowner grant or remit payments on time.
City staff told Business in Vancouver last week that 96% of all residential property owners in the city had submitted a declaration form by the February 2 deadline. However, the city is so keen not to collect the tax on the remaining 7,000 property owners that it’s given them till March 5 to submit declarations.
“The city does not want any of the 7,000 undeclared residential property owners to receive unnecessary fines and penalties because they failed to submit a declaration by the due date,” a staff response said.
Given the city’s aggressive approach to collections, empty-home tax revenue will be a sum to see. •
