A two-per-cent tax on speculative real-estate investment in B.C. that was a key part of the NDP’s election platform may not be a sure thing, says the party’s spokesman for housing.
“Taxes are one tool, but there are other tools available to policy-makers,” David Eby said Thursday. “Taxes aren’t always the right response — there may be others that are more appropriate to deal with flipping or speculative investment in our real estate market.”
Eby’s comments come one day after Gregory Klump, chief economist with the Canadian Real Estate Association, said during a roundtable discussion in Toronto that he wouldn’t be surprised to see policy-makers in Ontario introduce a tax on speculative home purchases in the fast-growing Greater Golden Horseshoe region, which includes Toronto.
The Ontario government introduced policies in April aimed at cooling the real-estate market in that region, including introducing a 15-per-cent, foreign-buyer tax similar to the one B.C. brought in almost one year ago.
Klump said he believes that a speculation tax would be misguided because such measures typically do little more than temporarily change market sentiment — pushing buyers to the sidelines for a bit while they wait to assess the impact. Loopholes could also allow some speculators to get around paying the tax, Klump said.
Eby encouraged people in Ontario to take recommendations from the real estate industry with a grain of salt because “time and again the information is inaccurate or misleading.”
“It’s been incredibly disappointing to see the real estate associations’ behaviour in British Columbia,” Eby said. “They have difficulty seeing beyond their own interests.”
However, he conceded that a new tax may not be the right way to tamp down the speculation the NDP believes is helping heat up the market.
“We don’t want to be forced into pursuing a tax. If experts say a tax isn’t going to address the issue, then we’ll look at other options — it doesn’t have to be a tax,” Eby said.
“But the outcome has to be that this kind of speculative action in the market has to end.”
The power-sharing accord between the NDP and Greens doesn’t go into specifics about how it would make housing affordable, simply that they would “take action to deal with the speculation and fraud that is driving up prices.”