OneCity proposes house-flipping levy in Vancouver

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      When San Francisco citizens cast ballots in California’s general election on November 4, they’ll also vote on several local-initiative measures, including one related to housing.

      The measure seeks to discourage real-estate speculation, particularly the flipping of apartment or multi-unit residential buildings. If approved, it will impose an additional tax on sales of these properties that occur within five years of purchase.

      “Home prices and market rents in San Francisco are among the highest in the nation and are now beyond the reach of many San Franciscans,” reads the proposed ordinance.

      That’s something that many residents in Vancouver can relate to. It’s a concern that the OneCity civic party plans to address with its own version of a “flipping levy”.

      The levy would be charged in increments as a percentage of “speculative profit” on the sale of properties within five years of purchase.

      Based on OneCity’s proposal, the tax would be 50 percent of the profit in the first year, 35 percent in the second and third years, and 20 percent for the next two years.

      “It’s for people who go into the market to buy a home and then turn around and sell it to make a big profit,” OneCity’s lone council candidate, Rafael “R J” Aquino, told the Straight in a phone interview.

      According to Aquino, the measure aims to foster long-term ownership and actual use of houses in the city.

      “It will encourage people to hold on to their properties longer and use it for long-term ownership and make it available for housing for anybody that needs that housing,” he said.

      Aquino noted that Germany, Malaysia, Singapore, and Hong Kong have tax laws aimed at curbing the practice of flipping properties.

      OneCity’s proposed levy would exempt costs for renovations, green retrofits, and other capital improvements to the property.

      Revenues generated would be used to develop affordable homes.

      According to Aquino, the flipping levy will work in concert with his party’s proposed “20 Over 5” housing policy, which it earlier rolled out as part of its campaign in advance of the November 15 municipal election.

      That policy provides that all new multi-unit developments of at least five homes should devote 20 percent of units to low- and middle-income residents.

      Comments

      24 Comments

      Tech42

      Oct 9, 2014 at 7:44am

      So the proposal is to encourage owners to leave houses vacant for 5 years now instead of selling them more quickly.

      Sounds like a recipe for a ghost town....

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      Oy Gevalt

      Oct 9, 2014 at 8:10am

      Isn't that a little like closing the barn door after the horse got out?

      The damage has already been done, so you're a little late pal ... like by 20 years

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      Forest

      Oct 9, 2014 at 8:13am

      Great idea, with one small caveat: what about folks who purchase a home, but then find themselves having to move a year later (due to work, family, other exigencies)? Still, I applaud those parties (OneCity, Cope) who are at least attempting to rectify the pernicious problems of speculative buying (whether that be flipping or 'holding properties) and housing affordability. Something needs to be done.

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      Miranda da Cruz Diaz

      Oct 9, 2014 at 9:17am

      This is the first really practical step to start addressing our housing affordability crisis that I have heard so far. It is accompanied by an actual "what to do and how to do it" plan. Instead of just promising 'more affordable' housing and then floating an insulting definition of the term, a la Kerry Jang, this Flipping Levy seems to be a first step. The housing exclusivity in this city has grown worse over the past 6 six years, with sky high rentals and home real estate prices that are out of this world. Add to that mess wholesale, anti-green demolitions of once really affordable housing and you've got our current crisis. Despite Vision's rhetoric, it has overseen this shameful situation. This is not a green city at all, unless one refers, symbolically, to the colour of money or perhaps to cynicism. Flipping Levy? Sounds good to me. I would like to hear more.

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      Felipe Capdeville

      Oct 9, 2014 at 9:44am

      I think that this won't do much about the lack of affordability in Vancouver. What happens with the foreign money investing in housing and then renting? Nowadays, people who actually live in the Lower Mainland can't afford a house here... it is ridiculous.

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      don

      Oct 9, 2014 at 9:51am

      This sounds like a great plan, applicable to Vancouver. As long as there is no possible loophole that avoids the tax if you tear down the house to build another.

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      RUK

      Oct 9, 2014 at 10:12am

      Very interesting, I have been asking for ideas about a drag on house sales from the vendor perspective. I have also read that some jurisdictions compensate the vendor for loss of market top end when selling to a local vs foreign buyer.

      The idea that we homeowners deserve whatever we get (after all, we took the risk of the market bubble bursting and would not have been insured against that risk) is pretty pervasive but I do want a Vancouver where the next generation can actually live and work.

      I also think that Burnaby and the other bedroom communities need to be involved in this discussion

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      mike

      Oct 9, 2014 at 10:17am

      Keep your nose out of peoples business, you have about as much chance of getting elected as Putin has of saying I'm sorry.

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      ion delsol Moruso

      Oct 9, 2014 at 10:34am

      Profiting from private property creates competition and increases social inequality.
      Developing abundant Municipal social housing would bring more equality and cooperation.
      When land is owned collectively by the city, speculators would would emigrate.

      By enabling Municipal, and non-profit-Land Trust agencies, housing shortage and housing speculation would decrease or disappear automatically.

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