issues and experts
SFU expert on the B.C. government's announcement on its speculation tax details
Today, the B.C. government has introduced the details around its controversial speculation tax. Finance Minister Carole James introduced legislation on Tuesday that lays out the tax applied to homes that are left empty in British Columbia, but doesn’t address many of the concerns brought forward by municipalities.
SFU Beedie School of Business professor Andrey Pavlov, who specializes in real estate, is available to provide commentary.
“The BC Speculation Tax is mis-labeled,” says Pavlov. “It has nothing to do with speculation, it is simply an empty homes tax. An empty homes tax has a certain appeal, as having a large number of empty homes affects both the quality of some neighbourhoods and the overall rental supply.
“However, an empty homes tax infringes on fundamental property rights, because it forces owners to behave a certain way even though they have paid for their properties with after-tax dollars, and have subsequently paid their property and other taxes in full. Limiting property rights in this way negatively impacts our housing markets and society in general.”
He adds, “more importantly, an empty homes tax does nothing to address our chronic shortage of new housing supply. On the contrary, limiting property rights likely makes some marginal projects no longer feasible. This reduces future housing supply, especially in the relatively affordable regions and market segments.”