Rennie says tax on speculaton preferable to one on foreign investment
Vancouver real-estate marketer Bob Rennie is proposing a speculation tax to stop prices from spiralling out of reach of the average homebuyer. (CBC)
Vancouver real-estate marketer Bob Rennie says one of the ways to put the brakes on an overheated housing market fueled by speculation, is to tax people flipping properties.
Rennie made the suggestedtion o more than 1,000 people Friday in a speech tothe Urban Development Institute.
"What if we were to look at a tax on people who sold something within a month of buying it, within three months of buying it, or six months of buying it, or nine months of buying it and then had a declining tax he said."
"What would you do with the money If we looked at helping, encouraging the affordability side for first time homeowners ...whether it's $5,000 or $10,000, $15,000 or a $20,000. Therecould be some matrix involving residency, length of residency, and income."
Rennie says part of the problem is banks won't finance condos until they are 60 per cent pre-sold. People snap them up, but construction takes years. Property values go up and when the condos are finally ready, he says the purchaser decides to sell instead of moving in.
Afterwards Rennie told reporters he was just floating the idea and that "somebody a lot smarter than me" could figure out where the conversation needs to go. He said he doesn't think taxing foreign ownership is the answer.
"if we put a tax on foreign ownership, I think it starts to look like the tip of the iceberg, that now we'll end up putting a tax on foreign ownership whether it's investment in LNG or a manufacturing plant. A tax on foreign ownership, it seems we're really talking about a tax on China and I don't want to see a tax on race."
Vancouver Mayor Gregor Robertson agreed with Rennie.
"We definitely need taxation tools that discourage speculation on real estate. It's clear that rampant speculation on real estate is driving up prices in Vancouver," he said in a statement.
"Vancouver needs the B.C. Government to take action on creating a speculation tax and recognize that we need a fair and level playing field to make housing more affordable for residents in Vancouver, and throughout the province."
Rennie says there are only 47,000 homes in Vancouver and that, not foreign ownership, is one of the reasons they're priced so high.
"The Asian purchaser that we see buying a condo or townhouse, they're local ... 44 per cent of our population is of Asian origin and I think we're mixing it up".
Despite his recommendation, Rennie says speculation isn't the problem it was in 2006 and 2007.
Vancouver realtor Marni Tritt, who has turned over multiple properties in the past when the market was a lot hotter than it is today, agrees.
"I'm not a big fan of a speculation tax, I think we're taxed enough," she said.
Tritt thinks another tax will add to the burden of young, first time home buyers. She'd like to see a reduction in the property transfer tax instead.