B.C. Liberal leader Andrew Wilkinson has proposed his own version of a “speculation tax” that he says will better target real estate practices that artificially drive up condominium prices.
Wilkinson presented a private member’s bill in the legislature Monday called the Strata Pre-Sale Contract Flipping Tax Act, which proposes a new capital gains tax on sellers who make quick profits on sales before construction is complete.
Like most private member’s bills, it has little chance of being passed, but Wilkinson said he hopes the NDP government will consider it.
The tax would duplicate the existing federal capital gains tax that applies to any sale for profit, effectively doubling the tax for pre-sale contracts sold on new developments.
“The idea is to tax the flipping of pre-sale contracts to slow down this ridiculous approach whereby people have trouble getting into the housing market, because the condo they want to buy has been flipped three or four times before they get there,” Wilkinson said.
The NDP government has brought in a “speculation tax” on second homes in urban areas where housing costs are high and rising. It was criticized for penalizing people with vacation homes, prompting Finance Minister Carole James to remove its application from rural areas in the Okanagan, Fraser Valley and Vancouver Island.
Wilkinson said the NDP government’s other housing tax, an extra school tax on homes worth $3 million or more, lands mostly on long-time homeowners rather than speculators.