Municipalities across Greater Victoria will have a chance to weigh in on whether a foreign-buyer tax should be introduced on residential real estate sales in the area.
Victoria Mayor Lisa Helps had proposed that the Capital Regional District ask the province to levy a 15% foreign-buyer tax in the region should the percentage of foreign purchasers in the CRD be 10% or more for two consecutive months.
Helps, who introduced the motion with acting CRD Chair David Howe, called the idea “pre-emptive,” noting the percentage of foreign purchasers in the capital region is currently “well below” 10%.
That percentage in Vancouver was well above 10% when the province introduced a 15% foreign-buyer tax there last August, she said.
“We know that property in this region is expensive, but the data doesn’t show that that’s because of foreign purchasers,” Helps said, adding that that might change should the Ontario government impose a similar tax to cool the overheated Toronto housing market.
“Again this motion is pre-emptive. It’s so we’re not caught waiting should we start to see an increase,” she said.
But after several people spoke in opposition last week, directors agreed to a suggestion to postpone further consideration for two months to give municipalities an opportunity to submit input.
Juan de Fuca electoral area director Mike Hicks said while such a tax might be needed in Victoria or Oak Bay, housing prices and increases vary widely throughout the region, and the affordability problem Victoria is experiencing isn’t the same in Langford, Sooke or Juan de Fuca.
“Vancouver between Squamish and Hope had a 30 to 50% increase in property values this year. In our area, the Juan de Fuca had 7%. Langford had 8.5, Sooke, 8.75, Metchosin 10% — all really nice annual increases,” Hicks said, adding the increase was 20% in Saanich, 24% in Victoria and 31% in Oak Bay.
“Oak Bay’s average house is $1 million now, but in Langford, it’s $456,000, in Sooke $394,000 and Juan de Fuca $435,000.”
Victoria Coun. Jeremy Loveday said he not only supports the idea of the tax but would like to see it brought in immediately, adding foreign buyers already account for 5.2% of sales here. “Speculation is already an issue in our region. Costs are skyrocketing and the dream of home ownership is getting further and further away for many of our residents,” he said.
Ara Balabanian, president of the Victoria Real Estate Board, said while the board is monitoring the effect of the foreign buyer tax in Metro Vancouver, it’s important to note that Victoria is not Vancouver.
“Our market conditions and our community offer different things to people emigrating from other countries,” he said, quoting from a letter the board recently sent to local municipalities, saying diversity “improves our community and helps to provide a foundation for a sustainable local economy” and increasing supply is a better way to increase affordable housing.
Metchosin Mayor John Ranns said the proposal might be reasonable for Victoria but the problem isn’t affecting Metchosin or the other West Shore communities.
“I also have a concern that every time government gets involved in the free market there are repercussions and we haven’t had the opportunity to view or discuss unintended consequences of this,” Ranns said.