B.C. Liberal Leader Andrew Wilkinson tables bill to tax profits on presale condo flipping
The leader of the Official Opposition has proposed forcing people who gamble in the presale condo market to fork over some of the proceeds to the provincial government.
Andrew Wilkinson has tabled a private member's bill calling for a provincial capital-gains tax on any profit from the sale of housing units before construction is completed.
“Unlike the NDP’s so-called ‘speculation tax’ that targets family cabins, this bill will actually address home flipping and artificial inflation of the housing market,” Wilkinson said in a B.C. Liberal caucus news release. “The NDP speculation tax is an ideologically driven attempt to drain away the savings of British Columbians who have invested in their homes.
"We will not target people’s retirement assets. Under this bill, only those who are purchasing pre-sale homes or condos and selling them at a massive price increase before completion will be taxed.”
His Strata Pre-Sale Contract Flipping Tax Act 2018 would replace the NDP government's "speculation" tax if a majority of MLAs were to vote in favour.
Critics of the B.C. NDP's speculation tax, including the B.C. Liberal leader, have claimed that it doesn't actually address the flipping of homes.
Next year, it imposes a $10 to $20 per $1,000 tax on assessed value on those who leave homes empty in Metro Vancouver, Greater Victoria, Kelowna, West Kelowna, Nanaimo to Lantzville, Abbotsford, Chilliwack, and Mission.
This is why it's been called a "vacancy tax" or an "occupancy tax".
This year, it's set at $5 per $1,000 in assessed value. B.C. residents can obtain nonrefundable tax credits for up to $2,000, which would offset the levy on second homes.
“The NDP promised ‘bold’ action on housing but so far, it’s just been blind tax grabs,” Wilkinson said. “Younger people and first-time homebuyers need a fair crack at actually buying a home here at a fair price.”
Earlier this year, the NDP government said that it would force developers to turn over information on presales to the government.
"The Province has yet to disclose the information it will require developers to collect and report, but it is likely that this will include the names and residency statuses of the assignor and assignee as well as the municipal address of the property and the amount of any consideration paid by the assignee to the assignor," wrote Clark Wilson lawyer Robby Goodrich on his firm's website.
This data would make it far easier for the province and federal government to impose capital-gains taxes related to the resale of these unfinished units.