Condo king Bob Rennie suggests a speculation tax on real-estate flippers
The city's most famous real-estate marketer has said he's "leaning toward" supporting a levy on people who buy and then sell homes over a short period of time.
"I suggest we look at a declining tax that sees a percentage of profits taxed if a home is sold—whether it's three months, whether it's six months, or if it's sold within 18 months," Bob Rennie said in a speech today to the Urban Development Institute.
The founder of Rennie Marketing Systems offered two explanations for bringing forward this idea to a crowd of more than 1,000 at the Hyatt Regency Hotel.
"The first is that I hate the racist undertone that is rampant out there, so I think we need a visible, measurable gesture," he said. "Secondly, if speculation is a huge negative contributor to affordability, then let's repatriate some of the money back to our first-time buyers that we collect."
He suggested that perhaps this measure could provide sufficient revenue for a $5,000, $10,000, or $15,000 grant to first-time buyers, based on their length of residency in the city or income. He added that perhaps these grants should only go to people who can prove that they don't have parents sitting on huge amounts of real-estate equity, which could be used to finance a future down payment.
"I'll drop the pebble on the pond," Rennie said. "Someone a lot smarter than me can figure out where this conversation needs to carry on."
In addition, he suggested that imposing a surcharge on owners of vacant homes could go to a "cut-your-grass fund and a fire-safety monitoring fund".
Following Rennie's speech, Mayor Gregor Robertson's office emailed an unsolicited news release to the Straight expressing support for a speculation tax.
“It’s clear that rampant speculation on real estate is driving up prices in Vancouver," the mayor declared in the news release. "Vancouver needs the BC Government to take action on creating a speculation tax and recognize that we need a fair and level playing field to make housing more affordable for residents in Vancouver, and throughout the province."
The mayor's office's statement took a swipe at the federal government for its "complete absence in supporting low and middle income housing", which "is making it extremely difficult for people, especially young people, to live and work in Vancouver".
Rennie has been a major political supporter of Mayor Robertson and Premier Christy Clark.
Meanwhile, Rennie told the UDI audience that he opposes taxing foreign investors in residential real estate.
He cited sales figures from three projects that he marketed to suggest that foreign buyers form a small portion of overall purchasers in Vancouver.
At the Independent at the corner of East Broadway and Kingsway, only three percent were offshore Asians and two percent were offshore Europeans.
Then he said that at Strathcona Village at 900 East Hastings, none of the buyers were offshore Asians and only three were offshore Europeans. A third project, Wall Centre Central Park, had less than three percent offshore buyers—17 Asians and 13 Europeans out of 1,009 units sold.
"I'm concerned that we are going to be sending a message to all of our foreign investors from India to Indonesia that if you tax foreign investment on housing on a Monday, you may tax foreign investment on technology, on LNG, and on manufacturing by Friday, hurting job creation," Rennie said.
May 22, 2015 at 5:00pm
I am a fan of Bob Rennie, but we have to look at the stats on foreign buyers of the great high end real estate this city has to offer.
- not just the condo market
May 22, 2015 at 5:27pm
Sniff sniff....is that fear I smell?
May 22, 2015 at 5:30pm
The bigger problem is buying homes and not living in them. We should have an "un-occupancy tax" which would be equal to the tax paid if someone was living in the home and hopping int he area etc. It should VERY stiff and substantial.
Dont we already have a buying/selling tax? Its called property transfer tax (which is already stupid).
May 22, 2015 at 6:11pm
The wealthy foreign citizen can afford a speculation tax. It does nothing. An outright ban on foreign land ownership is probably the only solution.
May 22, 2015 at 6:23pm
A speculation tax would not raise very much revenue or discourage speculators because prices will continue to rise due to a lack of supply.
Why are we discussing mechanisms to raise funds to help low-income/first-time homeowners when these options are already available. There are various home ownership schemes in socialist places like Singapore, Hong Kong and UK that could be used as models. The City should green-light projects that offer more affordable units.
If additional tax revenues are sought, then we should look at the existing framework: start by closing the loophole on bare trust agreements, add more progressive property purchase tax brackets, and perhaps introduce some broad-based capital gains tax on all transactions with fixed lifetime exemptions (ie $1 million) for Canadians and permanent residents.
May 22, 2015 at 7:50pm
Yes yes Bob. So long as there is no tax on speculators buying into new developments, right?
May 22, 2015 at 9:19pm
Easy for him to say, he is loaded and doesn't have to work or struggle in life if he so chooses. Does he live in a condo or a house?
Once again, the rich telling the unwashed masses how to live, as long as it's not like the 1% elite such as themselves
May 22, 2015 at 11:56pm
I am absolutely delighted to have read the 'Condo King's' 19 point 'manifesto' from this years UDI bun toss. It's as if it was penned by the Emporer Caligulia, so fraught with insanity it was!
A disjointed and paranoid mess of finger pointing at citizens ('Hey, you guys, why haven't you spoken up about development?!), a rambling discourse that sought to discredit (or was that invite?! Who knows!!) neighbourhoods and community's attempts to be heard, and the piece de resistance: the claim that Vancouver is well on the way to 'resort city' status if we don't do sumthing about the empty homes and foreign buyers.' OMG. Say WHAT?! But, but, but, you and the Mayor were saying just days ago that we were whining, no good housing racial profilers, who weren't good enough to afford our own Mercedes! Ok, you sort of said the same thing today...but at least you hedged your bets with your flip flops. Too delicious for words!
An astonishing performance. The many faces of Bob!
Yes, a complete 180 degree turnaround when he wasn't trying to feebly stick to last year's speech.
People, we are in free fall. Anything could happen now. The development gurus and the political lackeys that are their pets are in full blown panic as some reporters and citizens groups are taking over the reins of the housing narrative.
More power to them. I hope you'll all show up in support of those efforts this Sunday, May 24th at noon, at the Vancouver Art gallery.
May 23, 2015 at 7:45am
All ritual has a notable tendency to reduce itself to a rehearsal of formulas.
May 23, 2015 at 8:36am
Bob is talking out of both sides of his mouth, if he really wanted to provide relief for home buyers he could commit to only taking his sales commission on the first time sale of a property and then provide resale services free for the life of the property.
Don't expect it to happen...