MIKE HAGER (GLOBE & MAIL) British Columbia will soon allow international citizens working and paying taxes in the province to bypass the 15-per-cent foreign home buyer’s tax in a bid to make the province more attractive to skilled professionals.
Premier Christy Clark announced the coming move Sunday after being asked about U.S. President Donald Trump’s highly controversial ban on certain Muslim immigrants.
“We believe the best and the brightest should be able to come to British Columbia,” she told reporters during a short media scrum as Vancouver’s Chinese New Year parade was starting.
“We’re going to lift the foreign owners’ tax on people who have work permits, who are paying taxes and living in British Columbia, as a way to encourage more people to come.”
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Ben Chin, the Premier’s head of communications and issues management, said that Ms. Clark had asked British Columbia’s Finance Minister a little while ago to begin looking at lifting the levy for international buyers working. Mr. Chin said the exact details of the exemption have not yet been finalized, but the changes will soon be enacted through a provincial order in council.
He added that there is no plan to extend the tax beyond the 22 communities it currently affects and into Greater Victoria, which Canada’s housing agency recently singled out as an area experiencing a dangerous surge in home prices.
Tom Davidoff, an economist at the University of British Columbia, welcomed the province tying the tax exemption to someone’s work permit – a federal document that is hard to forge. But he worried there could be a massive loophole if foreign buyers were allowed to duck the tax by paying nominal amounts of provincial income tax on their global wealth. He added that the new exemption should not lead to a new spike in foreigners buying in Metro Vancouver’s lagging market because relatively few people are on work permits.
The latest provincial government data showed that foreign citizens edged back into Metro Vancouver’s flagging real estate market months after the province introduced the 15-per-cent tax at the beginning of August, but the percentage of buyers who are not Canadians or permanent residents is still well below the double-digit rates seen before the new tax hit the sector.
In and around Vancouver, foreign citizens were involved in 4.1 per cent of all homes bought in November, up from 3 per cent the month before and more than quadruple the near-zero rate recorded in the month after the province launched the levy.
Mr. Chin said this new exemption – which is similar to alternative proposals from the Opposition New Democrats and a group of more than 40 other local economists led by Prof. Davidoff – is coming because the B.C. Liberal government is narrowing its focus after creating the much broader tax.
“Now that we’ve had a pretty good half-year’s worth of data, we can make a move to encourage and continue to attract people that can add to our economy,” he said.
Vancouver MLA David Eby, the NDP’s critic for housing, said in failing to make this exemption at the beginning, the province brought seven months of unnecessary hardship for employers trying to recruit foreign talent already weary of the region’s unaffordable housing.
“The weird thing was we were taxing the workers who wanted to come and help build our province and we weren’t taxing all the speculators who got their money into the market before the foreign-buyer tax was proposed,” he said.
By exempting foreign buyers who are working in and around Vancouver, the Premier has now implemented half of the NDP’s original proposal to zero in on foreign capital – not citizens, Mr. Eby said.
“Now she needs to impose the additional property taxes on people who buy homes here, but who don’t pay provincial income tax here and haven’t been paying provincial income tax here.”
IAN ROBERTSON (BUSINESS IN VANCOUVER) The City of Vancouver’s character house zoning review proposes changes to policy which, under guise of character retention, will force homeowners to build in a way that is out of synch with their neighbourhood, the goals of density, affordability, inclusiveness, accessibility, life-safety, sustainability and energy conservation. It needs to be reconsidered before creating yet another barrier to needed new construction in Vancouver.
The changes would allow a character house (defined as built prior to 1940 with most historic features remaining) to grow a modest 7% larger than currently allowed, but would shrink the size of any new houses by 29%. The reasons given for this change are to stop the demolition of older houses, to stop the construction of “monster” houses and to address the disparity between an un-renovated character house and current construction.
But there are better ways to do this than to require that all buildings in character zones wear the same character’s kabuki mask.
Giving an incentive to keep existing construction is a worthy goal, because there are many ways in which the greenest building is the one that already exists. However, the proposed rules mean that a renovated existing house could soon be 1.5 times larger than a new house, which would in itself create a large disparity between existing and new construction.
A recent tour by the Abundant Housing Vancouver group visited several buildings that are up to three times the currently allowed size, more than four times larger than the new house limit, precisely the sort of difference being highlighted as a problem.
Zoning bylaws have been updated to allow both secondary suites and laneway houses. However, the new rules mean that new houses will no longer support both three-quarter bedrooms and a basement suite. This will lead to many basement suites going unbuilt, causing an overall loss of density over much of the city, at a time when affordable and family-appropriate housing demands are greater than ever.
The city’s goals to increase affordability and density are thus held hostage by the weight of “fitting in” to the neighbourhood.
New houses have to be built to current seismic and fire codes, whereas a renovated house can often skip these requirements. Despite the phrase “they don’t build them like they used to,” many older houses were built poorly, by unskilled labour, with little structural integrity. A survey of the most restrictive type of character retention in Vancouver – those that are done through a heritage revitalization agreement (HRA) and become listed historic houses – shows that many get stripped down to their core and rebuilt almost totally. This brings up the question: what character is being preserved anyway?
Historic Places Canada’s Standards and Guidelines for the Conservation of Historic Places in Canada manual makes clear that the goal of a sensitive historic conservation is to preserve – to keep existing elements, not to replace with something that looks plausibly old. The guidelines state that when material must be replaced, it should be clearly distinguishable from existing material. The city’s zoning review promotes neither of these principles. It favours the retention of a look, without requiring the retention of substance; further encouraged is new construction, which looks old – even if this look is inevitably achieved with vinyl and painted foam.
In 2010, Vancouver declared itself to be the greenest city, and in 2016 released the zero emissions building plan. Prioritizing existing inefficient buildings over new ones fights emissions reduction capability and the city’s stated sustainable goals.
Vancouver’s properties generally align north-south. Because a character house’s roof peak generally follows the longest axis of the house, most roofs in Vancouver face east and west. For most of the day, the sun is generally to the south, so if one were to install solar panels on a character house, half or more would tend to face the wrong direction.
When considering cars, it makes more of a difference to make a Hummer twice as efficient, as it does to do so for a Civic. Similarly, for housing, by not substantially upgrading existing buildings, we bake in large inefficiencies for another lifetime.
Character buildings tend to be poorly insulated even after renovation, because by very definition, they must have retained at least 50% of their original windows. Often, character houses also have non-conforming grandfathered projections into required yards. The only way to upgrade insulation is to add it to the interior, which means spaces shrink, further penalizing a poor existing layout, and even a heavily renovated older house will use far more than new, and far-far more than “good” new.
The retention of character merit is placed in direct opposition to the creation of sustainable construction. There have been projects explicitly discouraged from seeking passive house status in favour of keeping character. There have been projects where, once the house was deemed to have character merit, a planned passive houses retrofit has been cancelled because the existing houses could not be altered to admit sufficient light and heat.
Having to choose between preserving the past and ensuring the future puts homeowners between a rock and a hard place. If we are going to propose keeping existing buildings, there need to be real standards for conservation, otherwise we end up living in a Potemkin village, built to deceive the eye rather than retain history.
There are innumerable examples worldwide of new construction fitting in and even enhancing old, but without some acknowledgement of this fact, we forever cast neighbourhoods in amber fixing flaws alongside gems. There has to be some room in the argument for intelligence and outstanding design merit, especially if those traits are vital to the creation of the energy-efficient buildings that the future demands of us. The character house discussion currently seems to begin and end with the statement “make Vancouver [look] great again,” which is a poor argument no matter the subject. •
JON MEYER (CKNW NEWS) The B.C. Government is addressing soaring property assessments.
Finance Minister Mike de Jong confirms to CHNL news Kamloops the homeowner grant threshold will go up.
Global BC’s chief political reporter Keith Baldrey is reporting the threshold will go up to $1.6 million when announced Tuesday.
“It’s one of the biggest jumps, I think it is the biggest jump in terms of that threshold in some time. There was a big jump before the 2013 election, for a couple of years there, this one of course comes on the eve of the May election, with a significant increase of $400,000 in terms of assessed value.”
Baldrey says that should cover about 90-percent of people eligible for the grant last year.
READ MORE: Economist: Homeowner grant program needs adjusting
Assessments for those in several areas such as Metro Vancouver jumped by as much as 30-50 per cent.
The current home owner grant threshold is $1.2-million.
NDP welcomes the newsThe opposition NDP is cheering news the grant threshold will climb but is asking “what took so long?”
Housing critic David Eby says the province knew property assessments would spike this year and wait left vulnerable residents in the dark.
READ MORE: Critics say homeowner grant boost not enough
“There’re so many people who are at risk of having to give up homes that they bought that they could barely afford because people leverage themselves so far, they borrowed money for downpayments from friends and family or from private lenders. There’s a huge number of people that are living paycheck to paycheck and stretched themselves to get into the market, and any increase is unsustainable to them.”
Eby wouldn’t say what he thinks a fair threshold would be but says any change should account for big differences in regional valuations.
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