Foreign buyers’ tax does nothing for affordability, needs to be fixed: Horgan

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Vancouver-housesVICTORIA– Premier Christy Clark’s foreign home-buyers tax has failed to improve housing affordability and needs to be fixed by the amendments proposed by New Democrats during July debates in the legislature, writes NDP leader John Horgan in a letter sent today to the premier.

After years of allowing the housing market to overheat, writes Horgan, the B.C. Liberals “rushed in ill-considered legislation without fully considering the consequences.”

“Christy Clark has now called our housing market a “bubble” and finally admits there’s a real affordability crisis for people and families, but her actions have done nothing to make the rental or purchase of a home more affordable,” Horgan said.

Horgan said it’s been a month since Bill 28 came into effect, and the B.C. Liberal tax is “both failing to address the real problems facing Lower Mainland residents and creating significant unintended consequences.”

Since the tax was introduced, B.C. families have found themselves in the middle of failed property deals, while everyone from families looking to build a life in the province to professionals recruited by B.C. companies have suddenly been hit with a punitive tax when they try to buy a home.

At the same time, Horgan writes, loopholes in the tax have allowed for the continued use of bare trusts, enabling those with the financial funds to avoid the tax altogether. Horgan also warns that the Metro Vancouver focus of the new tax may drive the problem to other areas of the province.

“The tax appears to be failing to accomplish its only objective: making homes in this province more affordable,” Horgan said.

Horgan says it’s clear that the tax needs to be improved, and suggests three key New Democrat amendments that were rejected by the Clark government in July.

Those amendments would ensure that those who come to this province to live and work will not be faced with a punitive tax when they buy a home. They would also expand the tax to apply to investors who buy property here, but don’t pay income tax in the province, and remove the bare trust loophole.

“Your inaction over the past two years has created an affordability crisis in the Lower Mainland real estate market. Your inaction has made it nearly impossible for average British Columbians to find a home to buy or rent in the Lower Mainland,” writes Horgan.

“With that in mind, I strongly encourage you to take steps to remedy the shortcomings in Bill 28 during the fall sitting of the legislature.”

Read a copy of the letter to the Premier here.