Today, the BC Government announced that it will be moving ahead with the speculation and vacancy tax, the first legislation of its kind to be introduced in Canada.
The announcement indicated that BC will have the strongest protections in Canada against people looking to use the housing market as a resting place for both foreign capital and other speculative investments. It will also ensure satellite families and people who use local services without paying B.C. income taxes contribute their fair share. The speculation and vacancy tax is already moderating the housing market by curbing foreign investment and discouraging the incentive to hold homes as vacant investment properties in B.C.’s major urban markets.
However, the Surrey Board of Trade has a different perspective on the speculation tax, especially as October is officially noted as ‘Manufacturing Month’ and this week in Canada is noted as ‘Small Business Week’.
“The Surrey Board of Trade urges the BC Government to delay the tax and pursue a comprehensive economic study that will measure the tax’s performance against the government’s stated expected outcomes,” said Anita Huberman, CEO, Surrey Board of Trade.
The biggest concern with any tax is navigating through additional red tape and bureaucracy that a business or investor must face to determine if one is eligible for an exemption through this tax or if this will be an additional cost.
Surrey is set to become the most populated city in British Columbia over the next 30 years as 250,000 people from around the world seek to make a new life in one of the youngest and most culturally diverse cities in Canada. Surrey is a city in transition with approximately 1,000 new residents every month and accounts for approximately 30% of Metro Vancouver’s growth.
“Certainly we need to create the right balance of rental and market housing options. But Surrey is building an economy that will be Metro Vancouver’s next metropolitan centre focused on diverse industry innovation. All this growth will definitely attract labour.”
Surrey has the greatest number of manufacturers in BC. The talk of a speculation tax has already created unintended consequences for Surrey’s business community. The real estate and development sector has cooled down in recent months and as a result those manufacturers who supply to the development industry in Surrey are seeing reduced business activity.
“Our Surrey Board of Trade members are telling us that they are concerned with the unintended consequences of the speculation tax.”
The speculation tax is targeting vacant houses and foreign buyers; however, it will impact local developers, slow economic growth, and disproportionately affect out of province home buyers. It will also impact tourist destinations, and vacation homes.
“The tax is insufficient as a strategy to improve supply and reduce/control demand,” according to Surrey Board of Trade CEO Anita Huberman. “We need to increase housing stock, and work with developers to create sustainable, affordable housing rather than punishing developers.”
The Surrey Board of Trade has many government advocacy teams focused on this issue, such as their Development Team and Finance Team.