As the number of real estate purchases by foreign buyers continues to drop in Burnaby, city politicians are once again taking aim at the provincial government for the affordable housing crunch facing the region.
City council recently approved a pair of recommendations, including a request that Metro Vancouver gather municipal views on the province’s new Housing Priority Initiatives Fund. They’ve also asked that the provincial government consult with local governments on data collection and analysis as it relates to the property transfer tax.
But it was the information inside the staff report related to the recommendation that got city council talking.
According to the report, the province collected more than $1.53 billion in property transfer taxes for the fiscal year 2015/16, which represented an increase of $468 million, or an increase of almost 44 per cent from the previous 12 months.
Mayor Derek Corrigan suggested the property transfer tax was having a larger effect on the rising cost of housing then the costs cities are adding on to new developments like development cost charges.
“They (the province) take more money in the property transfer tax then we take with all of the charges we put on for them [developments] to provide the infrastructure in our communities,” he said. “What do you get for the property transfer tax? That would be nothing.”
Corrigan also argued if the province had put just a portion of the transfer tax each year into providing social housing, it could have done a lot of good to alleviate the housing crisis.
“This problem wouldn’t exist,” he said.
The Housing Priority Initiatives Fund, which is being proposed for provincial housing and rental programs, will receive an initial investment of $75 million from revenues from both the property transfer tax and the new additional tax on foreign buyers.
Last week, Premier Christy Clark was in Burnaby to announce $500 million for affordable housing units, with part of the funding coming from the 15 per cent foreign owner property tax
But council was quick to criticize the foreign buyer tax. Corrigan said he isn’t confident the tax will provide the source of funds the provincial government claims it will bring, while Coun. Nick Volkow suggested there are lawyers out there trying to figure out how to beat the tax.
He also said organizations like the Canadian Revenue Agency and the Financial Transactions and Reports Analysis Centre of Canada have turned a blind eye to the foreign buyer issue, adding the province’s finances are reliant on real estate.
“Everything that goes up must come down and when it (the real estate market) comes down, it will be epic,” Volkow warned, calling the recent announcements by the Liberal government a “farce.”
Meanwhile, the number of real estate transactions involving foreign nationals appears to be in a steep decline, according to the province’s latest numbers.
Between Aug. 2 and Aug. 31, the number of property transfers in Burnaby that involved foreign nationals was just five, or one per cent of the 494 total transactions for the time period.
That’s compared to the 262 transactions, or 24 per cent of the total transactions that involved foreign nationals in the city from between early June and Aug. 1.
The total value of the property transferred in Burnaby by foreign nationals after Aug. 1 was $2 million, compared to $221 million in June and July.
