To restore housing affordability, we need to think big picture
We need to treat housing as Homes First (investments second). We need to dial up the right kind of supply, dial down harmful demand, scale up permanently affordable housing, and rebalance our tax system.
The latter requires a #TaxShift that benefits the vast majority of residents.
Imagine a big income or sales tax cut, no employer health tax, or new investments to make life more affordable. A #TaxShift can make these possible.
But a backlash is brewing in B.C. against such a shift.
Owners of multi-million dollar homes in places like Point Grey are angrily mobilizing against the new School Tax, and the Speculation Tax also faces resistance.
Why we need a #TaxShift
To keep more money in our pockets
Earnings have fallen in B.C., especially for those under 45.  By cutting taxes on things we want more of — like income — we can keep money in our pockets to cope with the cost of living and to invest in our future.
To help cool the market
Meanwhile, housing costs have tripled.  Increasing taxes on things we want less of — like unhealthy housing values — will reduce treatment of homes as commodities, helping cool the market and reining in costs.
To address inequality
Inequality has worsened between renters and owners, and young and old. Our tax system hasn’t caught up, burdening many of us more than is fair. A #TaxShift can restore balance and enable better investments in young and old alike.
What it could look like
B.C. is already shifting taxes towards housing wealth via the Foreign Buyers Tax, new taxes on homes over $3 million and the Speculators Tax. While refinements are warranted, we need the government to go even further:
Less tax on local income (we could also cut sales taxes or eliminate the employers health tax).
More tax on unhealthy housing values, which could mean more directly targeting speculators, "flipping," and/or by taxing housing wealth more generally in a way that protects "house rich, cash poor" residents of all ages, and without making it more expensive to build new supply.
- Better investments in young and old alike, in areas like medical care, child care, education or transportation to improve affordability and intergenerational fairness.
There are many paths to achieve this broader #TaxShift, and we've developed one option. But we don't pretend to have all the answers. Thus:
We call on the B.C. government to establish a Tax Shift Special Commission to assess how to best rebalance our tax system.
Fix current taxes
We should make sure B.C.’s new Speculators Tax and School Tax:
Are accurately named → to better reflect the nature of the taxes (for example, it's not fair or helpful to label many vacation homeowners as "speculators").
Don’t increase the cost of building new supply → by exempting properties demonstrably under development, and exemptions for purpose-built rental.
- Thoroughly consider economic consequences → e.g. on tourism-reliant communities, revisiting which municipalities are covered.
Without losing sight of the bigger picture.
[1,2] Full report — A Tax Shift that Benefits the Vast Majority: the case for more annual (deferrable) taxation of housing wealth to rebalance the mix of revenue generation tools used by Canadian governments (includes 10 key considerations to help make a #TaxShift fair, along with a detailed proposal for a Million Dollar Homes Tax)
Short interview — CKNW's Jon McComb interviews us about the #TaxShift
Media release — (May 16, 2018) - A Tax Shift that Benefits the Vast Majority