There’s a long list of cities world-wide looking for ways of reducing overheated housing markets. Vancouver, rated by some measures as the second most expensive city to live in worldwide, is one of those.
But cities are loathe to put the brakes on any kind of investment that arrives in town, whatever the source. It has to be good for business and the property tax base, right?
It took the province of British Columbia until last year to step up to the plate with a speculation and vacancy tax, aimed at skimming profits from speculators who own homes only as investments, as well as homes left vacant that do not contribute to the supply of housing.
The first year’s results have been tabulated and so far they are exceeding expectations. What’s more, B.C. citizens have by and large been little impacted by the tax.
There are three areas that the tax targets:
- It charges speculators a percentage of earnings, which will in turn be invested entirely in new affordable housing.
- It encourages speculators to rent out vacant housing, providing more housing opportunities for a community.
- It aims to reduce the number of non-resident investors who are competing for available housing, softening the market for local households.
How did things go? Read more at Global News: B.C.’s Speculation Tax Brings In $115M, Mostly From Owners Outside Province
