Critics question effectiveness of B.C.'s anti-flipping legislation - CTV News Vancouver

The B.C. NDP government has introduced legislation that will tax home-flipping – starting next year.

But some critics are already questioning whether it will make much of a difference.

The tax is aimed at people who buy homes and sell them within two years.

Initially announced in February’s budget, the tax will impose a 20 per cent tax on profits of homes sold within a year of purchase. That slides to 10 per cent if sold after 18 months – and if an owner sells after two years, there’s no penalty.

“We don’t think families should have to compete against speculators when they’re making such an important decision,” B.C. Finance Minister Katrine Conroy said Wednesday. “So we’re making profiteers think twice about their flipping behaviour.”

The Condominium Homeowners Association of B.C. is welcoming the levy, arguing speculators have caused problems for long-term homeowners living in condos.

“Simply put, speculators are often more interested in profit and not necessarily what is in the best interest of the strata corporation,” Heidi Marshall with the association said. “The result is they often vote against needed repair and maintenance or an increase in strata fees.”

But some argue the policy won’t do much for affordability given the government only anticipates 4,000 flips in the first year the tax is in effect.

“It’s just a very small share of the market, especially right now, when things are a little slower,” B.C. Real Estate Association chief economist Brendon Ogmundson said Wednesday. “So I don’t expect we’re going to see much of an impact. There’s a not a lot of flipping activity happening right now.”

Concerns about the tax’s effectiveness are shared by the official Opposition.

“What people expect when they hear these types of taxes' titles is the end result to be delivered on what they’re talking about,” B.C. United finance critic Peter Milobar said. “In this case, it’s probably not going to deliver certainly any more housing units onto the market. It’s not going to do much to address affordability.”

But the government insists this is just one piece in a larger housing affordability strategy.

“Seven per cent of transactions in the last two years, on average, have been what we would call speculation and would be captured by the flipping tax, and that’s significant,” countered Housing Minister Ravi Kahlon when asked about the criticism. “Not one (individual) measure is going to address housing prices overall.”

There are exemptions to the tax including for divorce, death, illness and relocation for work.

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2024-04-04 01:57:00Z
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