Vancouver homeowners cool to idea of tax on real estate ‘lottery’
With younger generations priced out of a sky-high market, should the government tax more those who lucked out? Local families think not.
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Some call it clever foresight. To others, sheer “fluke” — simply profiting from Vancouver’s “lottery of timing.”
However you see it, it’s clear that those fortunate Vancouverites who bought homes in previous decades before values exploded have amassed what amounts to a massive windfall.
Now, as some younger generations residents question whether they have a future in their own city as either owners or renters, ideas for how to deal with the winnings are generating mixed reviews.
On Sept. 6, Environics Analytics released a study concluding that, thanks to home prices, Vancouver has become the country’s first “city of millionaires,” with the average total wealth — including property — exceeding $1 million a head for the first time this year.
“It's an issue that's pitting the Baby Boomers and older against Millennials,” said Penny Gurstein, director of the University of British Columbia's School of Community and Regional Planning, in a phone interview. “It's become an age issue now, rather than just socioeconomic status.”
But instead of a battle between homeowners against renters, or old against young, some residents are banding together to worry about the same thing: their future here.
“Even families who are very wealthy are very concerned about how their children are going to be able to live here — it's going to be increasingly difficult,” Gurstein said. “We're hollowing out the city of Vancouver.”
Homeowners across the city told Metro the same thing: the rapid lift in their property values pales in importance to whether their descendants can remain here, particularly as parents near retirement.
“It’s insane,” said East Vancouver homeowner Dave, who asked not to publish his surname. “My oldest daughter makes a really good income, but she doesn’t know what her future holds here … The youngest one’s just out of school and wants to live on her own, but it’s hard to find anything affordable even renting. Forget about owning.”
This week, a Chinese student filed a class action lawsuit in court against B.C.’s tax on non-resident or citizen buyers, calling it discrimination based on nationality.
Regardless of whether the case is allowed to proceed, for Generation Squeeze founder Paul Kershaw it’s an opportunity to question why buyers’ origins should matter when it comes to taxes — instead of taxing what he calls “housing wealth” in order to drive down prices and create revenue for more supply.
“For those who have had homes for some time — I’m thinking about my mom's demographic — the fact that housing prices have gone up so much is golden,” he explained. “It's contributing tremendously to the financial security I want for her in her retirement.
“But by the same token, she is well aware that her kids and grandchildren can't manage to actually start homes in the same way she did.”
That’s why the Generation Squeeze campaign, which advocates for government policies more equitable for Canadians under 40, has suggested that taxes actually look at households’ total wealth including their homes, since they benefited from nothing more than a “lottery of timing.”
“If people can then make investment returns on their housing investments, fabulous,” Kershaw said. “But we should tax housing wealth more fairly, including from a generational standpoint.”
Although the city already levies greater taxes based on a property’s assessed value, Kershaw argued the system is still stacked in favour of those generations of homeowners who have become house-rich while others are priced out.
Vancouver author Caroline Adderson heard Kershaw outline the proposal at a rally held last Saturday downtown, and disagreed.
“If that happened, we would lose our house,” the author of the book Vancouver Vanishes: Narratives of Demolition and Revival, told Metro. “Somebody told me we could defer our taxes, but I don’t believe in that.
“Taxes are my contribution to my community. If everyone’s going to defer their taxes, how’s the scheme going to work? The coffers won’t fill.”