Jeff Nagel just added this to the comments section under “The Beautiful Empty Homes of Vancouver.”
We (the Black Press newspaper group) in 2011 proposed a homeowner grant for TransLink much like the municipal version. It would allow more property tax to be raised for TransLink, which clearly needs more revenue, without the rate increase affecting the taxes on the typical owner-occupied home.
Those who would pay more would include ineligible foreign owned and non-owner occupied investment homes, neither of which qualify for muni homeowner grants either. An increase in their costs might arguably also provide some limited benefit on the housing affordability/efficiency issue. Our idea never got any traction but you can still read that editorial here.
Just to avoid wrist strain, and to make sure the proposal gets a higher profile, I reproduce it here:
A radical tax proposal
- by Staff Writer – Surrey North Delta Leader
- posted Aug 22, 2011 at 3:00 PM
High home costs are increasingly pricing people out of the real estate market and raising questions about Metro Vancouver’s long-term affordability and sustainability.
The market’s rise has been partly driven by an influx of foreign investment, including a steady parade of buyers from China.
Meanwhile, the struggle continues to find new funding for TransLink for much-needed transit expansion without inflicting too much pain on already heavily taxed residents and motorists.
Gas taxes, vehicle levies and tolls are all hugely unpopular, raising the spectre that political paralysis may freeze any improvements, including the Evergreen Line.
So here’s one provocative proposal that might help put a dent in both problems: Double TransLink’s current residential property tax rates.
But at the same time, create a homeowner grant that rebates 50 per cent of the TransLink tax.
Like the homeowner grant on municipal property tax, the TransLink version would exclude second vacation homes and disqualify owners who aren’t Canadian citizens or landed immigrants.
There’ would be no change in the $230 a year in property tax the average resident homeowner now pays TransLink for a typical $650,000 house in Metro Vancouver.
Most working folks would notice no difference.
But the transportation authority would suck twice as much cash from foreign buyers, other non-resident owners and speculators.
A $4-million luxury condo owned by a Hollywood starlet, Shanghai business magnate or Alberta oil tycoon – who jets in once or twice a year – might bring $2,800 to TransLink each year instead of the current $1,400.
And why shouldn’t they pay more?
They come to enjoy Vancouver’s legendary livability yet make no permanent commitment to the region and use scarce housing inefficiently.
For that privilege of using our city like a fly-in resort, they can cough up some extra coin to help build new rapid transit lines across the region and contribute to the long-term viability of the region and their investment.
Others who would pay more are qualifying residents with homes worth more than whatever cap is set for the benefit. (The civic grant is phased out for homes worth more than $1.3 million).
TransLink currently collects nearly $300 million a year in property tax. Not all of that is residential and only a small fraction comes from non-qualifying homeowners.
But doubling what they pay might still generate an extra $20 or $30 million a year – a significant chunk towards TransLink’s $70-million-a-year upgrade plan, perhaps avoiding the use of one of the less palatable revenue sources.
And if a selective TransLink tax hike on non-residents or other owners of ritzy homes takes a bit of the juice out of our overheated real estate market, so much the better.
– Black Press
Crazy that was first published in 2011 and ignored ever since. I like the idea
Do we know what percentage of the area’s residential units eligible for the homeowner’s grant? And I would expect that the majority of those ineligible units would be rentals and not vacants. Increasing the tax on rentals might not be the best way to increase affordability.
Good insight but doesn’t go far enough !
I have posted here and elsewhere to raise residential property taxes in MetroVan as they are quite low per 100,000 of assessed value.
The proposed rebate makes sense but how to differentiate between first, second and third homes ? Very hard to implement.
In addition residential property transfer taxes should be raised by 1% per million $ assessment to 10% over $10M.
Unaddressed is the excessive unionization and excess pay & benefits of most civil servants and quasi public servants like BC Transit, BC Hydro, BCFerries or TransLink employees. A broad discussion on fair pay needs to happen, as we see now with BCTF demands and associated gridlock BEFORE any more taxes are allocated to governments or their quasi-affiliations like BC Transit, BC Ferries, BC Hydro or TransLink !!
Here’s a more radical proposal to kill speculation. Kill provincial income tax and replace it with equivalent provincial property tax. Instead of chasing foreigners and astro families for their undeclared foreign income they would have to pay a significant chuck to the province through property tax. So we would not have people living in 5mill homes and declaring income of 30k a year. This is used in some states like Texas already…
Excellent idea. We need to monetize foreigners desire to invest their (illegal, legal, grey) cash here, such as higher land transfer taxes and much much higher property taxes. In return we need to lower PST and/or income taxes, and/or give property tax credits for modest homes, say up to $1M and/or increase seniors’ tax credit and/or their deferral options further.
Land transfer taxes should go up 1% per $1M, to 10% for properties over $10M.
Or communist view on road pricing though has to change too. Lining up on Lionsgate yesterday, for example, it occurred to me that charging $10 per direction during rush hour and/or $20 extra for the middle lane would be the right thing to do. In a train and/or an airplane I can fly business class or first class for a significant premium, so why not for roads, too ?
HOV lanes make sense, but why not allow people to pay for it ? Surely the Lambo driver lining next to me on Lionsgate bridge wouldn’t mind paying the extra $20 to show off or a few minutes saved, in his (usually a he) discretion.
Doesn’t that also describe the typical West Side empty nester retired couple?
Or is that only for non-residents?
Reblogged this on amvpower and commented:
Very progressive – what do you think?
It’s not clear to me how raising taxes on non-owner occupied homes improves housing affordability. Might address the affordability of owning a home, but renters are people, too, and I can’t see a way that costs like these wouldn’t just be passed on.
Hopefully it helps destroy the demand a little bit, plus puts more money in public coffers to build social housing.
It does not improve affordability at all, it just allows more taxes to be collected from foreign investors or non-occupied units, i.e. folks with money to park but no local income/taxes paid in addition to real estate owned. It allows to fund more public services, say more public transit or lower taxes elsewhere, say PST or income taxes for those that actually live, work and spend here besides real estate.
The only thing that improves affordability is less demand, and since that is unlikely, more supply. Some regulations are silly, such as parking requirements.
many people also have a jaded expectations. You cannot expect to live 2-4 blocks from the beach in a cheap home, condo or rental unit, such as folks in the west-end or Kitsilano expect. Cheap is cheap for a reason, namely lower land cost in less desirable areas, further out, no views or far away from attractions.
In my (humble?) opinion the whole east-end of Vancouver south of the container terminal could be redeveloped without a nickel of public money, not like the looney $1B idea of Vancouver’s spend spend spend “vision” city council. They could mandate 10-15% per new development as “affordable” and maybe another 5% as for the truly homeless and the homeless problem and rental issue would be solved in Vancouver. There is lots of appetite to live close to downtown, on the east end with splendid views over the north shore. Kind of like the existing W building .. just 50 of them .. not just one or 2. Problem solved. The vision however doesn’t seem to exist in “vision” Vancouver !
As Bob and Thomas said jacking up the tax on 2nd/3rd/4th houses and those owned by foreigners doesn’t improve affordability, but collecting extra from those most able to afford it seems like the cornerstone of a progressive tax system. Doing that allows government to provide more services, lower taxes for everyone else or a combination of both.
It could be argued that any housing that you’re not occupying yourself is a business and that you should therefore be obligated to pay commercial property taxes regardless of whether you actually charge rent or simply leave it empty. Those who can afford to forego collecting rent are even more able to absorb increased taxes than those who need the income.
For an empty west side house with a tax bill of $6k/year, jacking it up to $30k/year could:
1. give the city $24k in pure profit
2. cause the owner to rent it out thus increasing the supply of rental housing
3. scare away investors thus lowering demand and prices somewhat