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Province to Collect Foreign Buyer Data, Reluctant to Impose Any Tax

NDP says latest measures do nothing to address BC's affordability crisis.

By Andrew MacLeod 10 May 2016 | TheTyee.ca

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria and the author of A Better Place on Earth: The Search for Fairness in Super Unequal British Columbia (Harbour Publishing, 2015). Find him on Twitter or reach him here.

The British Columbia government today announced steps to prevent shadow flipping of houses and to collect data about foreign real estate buyers, but the NDP says the measures will do nothing to address affordability.

As of May 16, people licensed to sell real estate in B.C. will have to include two new clauses in any offer to buy property.

The first will require that the seller consent to any transfer of the purchase contract, so that it will no longer be possible for buyers to resell a property before the deal closes without the knowledge of the original seller. The other says that any profit made from transferring the contract would go to the seller.

And in June the government will begin using the property transfer tax return, required to be filed any time property changes ownership, to ask buyers where they live and where they are citizens. The government first announced in February that it would make the change to the form.

Finance Minister Michael de Jong said the government would need to collect the information for at least six months to a year before he expects to see any pattern. And even if there is a pattern, the government is reluctant to introduce a tax on foreign ownership, he said.

"It's not something I've advocated," de Jong said, stressing that B.C. has benefited by welcoming people from around the world and being open for business. "I have a bias against singling out foreign investment for a single or punitive tax."

In other jurisdictions, taxes on foreign ownership have had little effect on affordability, he said. "Vancouver is a changing market," he said. "In a market that is still very much driven by supply and demand, I don't believe the answer is to restrain demand."

BC needs 'vibrant' not 'vacant' cities: Horgan

NDP leader John Horgan welcomed the steps to stop shadow flipping, but said the government needs to address speculation where people are using B.C. real estate as a "safety deposit box" for their money.

"The action the government takes today does nothing to address the affordability crisis in the Lower Mainland," he said. "The big challenge is money coming to distort the marketplace... We need a vibrant city in Vancouver, not a vacant city, which is what we're getting."

Noting that real estate developers have donated some $5 million to the BC Liberals in the past few years, Horgan said the government has resisted doing anything that would make prices more affordable.

During the current session of the legislature, the NDP has introduced private members' bills -- none of which have gained the support of the government -- to address speculation, prevent renovictions and protect mobile home owners, all of which would make housing more affordable, he said.  [Tyee]

Read more: BC Politics, Housing

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