The balanced budget released by B.C.'s liberal government Tuesday included measures to encourage new housing construction and to research what role foreign ownership may be playing in the province's real estate market.
The government will re-introduce a requirement for people buying homes to disclose their citizenship, and will also put in place a tax incentive that will exempt buyers from paying the property transfer tax on newly built homes valued up to $750,000.
Host Stephen Quinn spoke to B.C. Finance Minister Mike De Jong on The Early Edition to ask what the government plans to do with the information gleaned from foreign ownership tracking, as well as how the tax incentive will address the lack of rental housing in Metro Vancouver.
Stephen Quinn: The government will track the citizenship of every property purchase and share that information with British Columbians. What will you do to analyze that data?
Mike de Jong: Well it is a two-step process. [There is] lots of speculation about what is contributing to the hot real estate market particularly in Metro Vancouver, and I think it's a complex set of variables. There is this question about the role foreign purchasers are playing, but it's been all speculation.
"We want to ensure that people are following our rules and paying the taxes that they are obliged to pay." - Finance Minister Mike de Jong
Back in 1998 the identification of foreign purchasers ended. We're resuming that — so anyone seeking to register themselves as an owner will have to identify themselves as either a Canadian citizen or permanent resident, and if they're not one of those they'll have to identify what their citizenship and country of residence is. We'll take that step, and then be in a better position — not just government but others — to formulate some recommendations.
Do you have any idea what those recommendations would be? There's been a suggestion that non-resident owners who leave properties vacant should be paying additional taxes unless they rent or occupy those properties. That seems to make sense, does it not?
There are all kinds of approaches and ideas. Our objective here is not to suddenly say to the rest of the world that people aren't welcome here and that we aren't encouraging people to come here to invest, to create jobs, to create businesses.
But we also want to make sure that there's equity. We want to ensure that people are following our rules and paying the taxes that they are obliged to pay, and there does seem to be, at least anecdotal evidence that some people are going to extraordinary lengths to avoid their obligations under our tax rule.
But do you want those people to live here and participate, or do you just want their money?
Look, we spend a lot of time encouraging investment into Canada. There's no question about that. We spend a lot of time all over the world explaining to people the advantage of doing business here, but we also want people to come here, be part of the community, raise their families and take advantage of what I guess a lot of us take for granted: the extraordinary experience of living on Canada's West Coast.
Tell me what this budget does for people who rent their homes, which in the city of Vancouver makes up about 52 per cent of the population
Well first the budget includes over $350 million in promised expenditures around affordable housing, and there's a social housing dimension to that. The general theme here and the changes are designed to create an incentive for the construction of additional housing options. That's the rationale behind removing the property transfer tax from[newly built houses and condos up to $750,000]
That incentive would be for developers to build more homes to purchase, is that correct?
That particularly accrues to purchases. But people buy homes and condos and turn them into partial rental accommodation as well.
Again, what incentives does this offer for the construction of new rental housing? What can the provincial government do to provide incentives to developers to build new rental housing?
The first thing governments at all levels need to do of course is expedite the development, the rezoning and the permitting required to get on with the construction of rental housing. Keep in mind the budget for rental supports is significant, and the fact that we have provided rental supports that are not attached to a particular unit but follow the family, as it were, is a major step forward and has helped literally thousand of families.
This interview has been edited and condensed
To hear the full interview listen to the audio labelled: Finance Minister Mike de Jong says foreign ownership tracking, tax incentives will address housing issues