Word is starting to come out of Victoria that the Province will move on the housing affordability issue that has become a key political issue in Metro Vancouver and introduce a suite of new policy tools designed to take some of the heat out of the high end of the market. After having no success in trying to brand the issue as a West Point Grey problem or simply a problem of cities not allowing enough supply, the BC Liberals seem ready to take the challenge seriously. At the centre of the proposals, to be announced later today, is a new ‘speculation’ tax on real estate transactions. The tax, similar to the proposal advocated by a group of academic experts from UBC and SFU, would charge a 2.5 percent surcharge on all residential real estate transactions over $500,000.
However, unlike most calls for any proceeds to be reinvested back into housing (through an ‘Affordability Fund’), the government has identified regional transportation investments as the primary benefactor. In a classic ‘two birds with one stone’ approach, proceeds from the surcharge would be invested into a regional transportation fund with the proposed Massey bridge to be the first in line. Apparently, this is seen as the best way to address speculation and affordability in a way that grows the economy and doesn’t deflate established housing values (a key issue for the government). Readers of this blog may have other opinions.
A detailed proposal is expected to be announced later today.
It seems like a crazy proposal, but I guess its that time of year.!