REAL ESTATE B.C.’s real estate ‘speculation tax’ will reserve homes for the ultra rich

Posted by Michael La Prairie on Thursday, March 15th, 2018 at 2:55pm.

Mark Milke is author of Tax Me I’m Canadian: A Taxpayers’ Guide to Your Money and How Politicians Spend It.

If Canadians want a case study on how governments make a problem worse, cast an eye at British Columbia and housing. The provincial government, both under the previous Liberals and now the NDP, have continually kept or enacted policy, such as rent control and now a speculation tax, that exacerbates a tight rental market and high real estate prices.

real estate ‘speculation tax’

Supply problems and slum promotion: The problem of rent control

British Columbia has long had rent control. That policy always discourages the construction of rental units as it limits the return on investment, which, in turn, squeezes supply, even condominiums bought by potential individual landlords. Such controls also produce slums as landlords have little incentive to fix up or improve units beyond the bare legal minimum. This ultimately harms renters by producing artificial shortages and a degraded housing stock.

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