Politicians and bureaucrats are different from the rest of us. When everyday folks look at homes, we see our future – a place to live, to raise a family, to retire. It’s an investment that will help us, a safe spot that becomes the centre of our world.
When the politicians and bureaucrats look at those same homes, they see a cash cow to be milked.
How else to explain why new housing in the City of Vancouver is now subject to at least 107 taxes, fees and levies, all of which drive up the cost of housing? Our leaders now tax new condos at a rate of at least 37 per cent, making a condo that costs $294,691 pre-tax come in at $403,809.
At a time when real estate has become the dominant conversation in the Lower Mainland, when a news cycle can’t go by without another big affordability story, the politicians have gotten off nearly scot-free, even as they reach their hands deeper into the housing tax till.
Rather than encourage new housing – thus increasing supply and helping drive down prices – city hall acts like it’s a nuisance to be eradicated. They seem to be trying to tax new housing out of existence.
Meanwhile, too many politicians and bureaucrats act like even more taxes is the solution to affordability problems in the Lower Mainland. Some float speculation taxes and foreign investment taxes and higher taxes on pricier properties.
Everyday taxpayers should be very reluctant to go down that path. Back in 1987, the Property Transfer Tax was brought in as a luxury tax – it applied to just the top 5% of property purchases. Today, it’s a major cost driver in new housing.
Today’s luxury taxes have a way of turning into tomorrow’s everyone taxes. And any increased cost, including higher taxes, makes things more expensive, not cheaper.
There are many causes of housing unaffordability in the Lower Mainland, and many need to be addressed. But politicians should not be allowed to wriggle off the hook for their contributions, and should instead aggressively cut taxes, speed up regulatory processes and help get more supply into the market.