You might have heard about the new suggested “real estate speculation tax” in Vancouver BC. Here is how it all started. Greater Vancouver has a very strong real estate market. Prices are steadily going up by 5-10 per-cent every year. More in the recent years. People have always complained that Vancouver real estate prices are too high. Lately the complaints have been getting louder and louder as most of Metro Vancouver has shifted into sellers market.
Our mayor, Gregor Robinson, thought it would be a good idea to suggest a new “speculation real estate tax” to help drive the real estate prices down. Here is how the tax would work. If you buy a property and sell it within 1 or 2 years (exact details weren’t made clear) another 1-3% real estate speculation tax will apply. Sounds pretty good? According to Mr. Robinson this tax would keep all these evil developers in their place and somehow drive the real estate prices down. Again the details weren’t clear.
My opinion is that this tax is absolutely unnecessary and would work opposite of it’s original intent. Here is why: Vancouver real estate market is already one of the highest taxed in the world. We have: property transfer taxes (don’t get me started on these), annual property taxes and GST for new properties, we don’t need another tax layer.
Adding another tax layer to already very heavily taxed real estate market will only make the prices of real estate go up. One thing we learned from capitalistic system is that the extra cost gets passed down to the consumer, most of the time. In other words buyers will be the ones paying for additional real estate taxes. Speculation tax would drive the real estate prices in Vancouver up not down.
Luckily premier Christy Clark has shut down the suggestion of this ridiculous tax. For above state reasons and the fact the most people living in British Columbia own a property. Can you imagine how angry the home owners would get if this tax would actually be introduced?
In my opinion Gregor Robinson was not really intending to introduce this tax but rather was paying political games. Showing people that he’s the “good guy” and that he’s “doing something” to bring the real estate prices down.
What do you think?
Again, in this article I am simply expressing my opinion and not supporting or disapproving of any political figures. I stay out of politics and do what I do best – sell properties.