The Okanagan Mainline Real Estate Board (OMREB) is continuing its efforts to fight the planned B.C. speculation tax.
“It’s disconcerting that the B.C. government continues to contemplate the speculation tax in the face of higher interest rates and the federal government’s May 9th hike to the mortgage stress test lending rate, both of which are having the desired effect of curbing demand,” says Tanis Read, OMREB immediate past president. “Driving away demand is not the answer. Saddling an already normalizing market with even more regulation that ironically targets mostly B.C. residents is liable to be the straw that breaks the camel’s back,” says Read, adding “We’re due for a pull-back, which if deepened by too much regulation, could result in severe impacts for all B.C. residents, not just current homeowners or those the tax targets. Worse, our most vulnerable citizens could be hardest hit…not exactly a recipe for affordability.”
Particularly concerning for tourism-driven regions like the Okanagan, the board says a significant drop in real estate demand could result in job loss.
“In a bizarre paradox, lower property values would slow housing supply expansion, lead to more critical shortages in future and fewer municipal tax dollars to pay for much-needed services, with shortages likely to be made up by current homeowners,” says the board.
“None of this spells greater affordability and, while no one is disputing the need to increase affordable housing supply, the misnamed speculation tax, really a tax on assets, is not the way to achieve this goal and is likely to harm the very people the government aims to protect and support,” says Read.
Adding its voice to those of many other real estate and development experts, OMREB says the answer to more affordable housing lies in working with local municipal government and industry to facilitate and encourage development of housing that is specific to the need.
“The general public hears ‘affordability’ and quite naturally concludes that the proposed speculation tax must be a good thing, but the reality of what this tax is likely to trigger is a very different picture than what is being painted,” Read says.