B.C. to tweak foreign buyer tax this week, but home affordability remains elusive

VICTORIA — B.C.’s finance minister will unveil new exemptions and rebates for the foreign buyer tax on Metro Vancouver real estate this week.

As the debate rages on about foreign speculators and housing bubbles, people on the ground say this boom is a lot more sustainable than many think. 

International citizens with work permits, who pay taxes in B.C., won’t have to pay the foreign buyer surcharge. That’s a bid to recruit high-tech workers from the United States. And foreign nationals who were hit with the 15 per cent foreign buyer tax on their real estate, but then months later become Canadian citizens, could get a rebate.

But if you think the changes are an acknowledgment from the Liberals that the bombshell tax on foreigners last year was crafted too hastily, reached too far, had too many unintended consequences, or did too little to fix home prices in the region — well, think again.

“The tax on foreign purchasers in British Columbia has done exactly what the government and what citizens hoped it would do, and that is slow down the tremendous growth in the cost of housing in the Lower Mainland,” declared Premier Christy Clark in the legislature last week.

“We did it. The NDP opposed it. It turned out that it did exactly what we expected it would do.”

“I know the foreign tax was not popular with developers,” she added later in the house. “But I do know that it’s popular with British Columbians … It’s been popular because it works.”

In other words, unfurl a “Mission Accomplished” banner.

I don’t know what planet the premier is on if she thinks she’s dealt with housing affordability in Metro Vancouver

Yet, despite the premier’s enthusiastic rhetoric, the housing affordability crisis appears still very much alive in the Lower Mainland.

The foreign buyer tax served to vent the public’s frustration with a small subset of the problem — mainly, wealthy offshore Chinese investors who didn’t pay taxes here — but it doesn’t appear to have addressed the root of the issues that drove two years of skyrocketing home prices.

Whether that actually matters in the minds of voters on May 9 is an open question.

This week’s tax exemptions will mark one of the last tweaks to the government’s suite of housing reforms before it heads into the election campaign. After first refusing to intervene a year ago, the Liberals have since stripped Realtors of their self-policing powers, pledged $500 million in new affordable housing construction, banned shadow flipping of properties, created a government-backed down payment loan program, and offered municipalities cash incentives to clear a backlog of approvals for housing projects.

The overall goal, the premier has said, is that “home ownership must stay within the reach of the middle class.”

But on that promise, she’s failed, said NDP critic David Eby.