Why I’m uncomfortable with the new Vancouver Foreign Owner Property Tax
I resonate with a lot of social media articles about the Vancouver housing crisis: It’s pricing people out, stifling the city, the bubble is going to burst, etc.
But I am uncomfortable with the glee around this new foreigner land transfer tax in Vancouver. Because the tax seems xenophobic, and it’s not targeting the right people that have the most influence on the market.
The media coverage also doesn’t help, because they never really have a conclusion about how much various factors contribute to the high (12.09) price-to-income ratio.
- Is it the rich Chinese immigrant’s money flooding the market?
- Is it the prolonged low interest rates?
- Is it the large inflow of people in the city?
- Is it the slow rezoning process limiting supply?
- Is it speculative flipping?
A Torontonian’s Point of View
I did not grow up in Vancouver, I came here 10 years ago from Toronto. And before that, my family came to Canada as part of a previous wave of immigrants from Hong Kong (25 years ago).
Being from Toronto, I’ve always heard about Vancouver’s high real estate prices. Ten years ago I thought: “I’d never pay this much for a condo, I can buy a whole townhouse in suburban Toronto at that price!”. Boy was I wrong. And in those 10 years, the housing market here never ceased to surprise me.
Déjà Vu
It took me a while to figure out why this new tax and discourse irked me: we’ve seen racist taxes before in Canada. Even though I have no relatives who paid the Head Tax, new immigrants like me watched the campaign to seek redress for this tax with interest.
The discourse leading up to the head tax can be found in the Royal Commission on Chinese Immigration, 1885:
“…the Chinese were immoral, dishonest, unclean, prone to disease and incapable of assimilation…”
“…Others protested that the influx of Chinese workers created competition for white labour…”
Unfortunately, 130 years later, such stereotypes still exist — In Hong Kong discriminating against mainland Chinese. And by extension even naturalized Canadians.
It’s their subconscious believe that:
- Mainland Chinese should work for local companies, that’s the only way they should contribute
- Mainland Chinese should not be owners/bosses
- Mainland Chinese should not be owning land here
This new foreign owner tax is not specific to Mainland Chinese, but all the media headlines were about them.
If the market does crash, it will not be because of the new 15% PTT — but the racist hostility behind it.
The shirked responsibilities
While Vancouver locals were struggling, their frustrations simmering about the housing prices — the various levels of government did nothing to address the problem and fend off the racist discourse.
They point to each other saying they do not have the right authority, or the problem is too local to address with a national housing strategy.
They fail to explain to the local population why we continue to have Chinese immigration, why foreign capital is good for Canada, or that it’s local Canadian’s who sold their properties and re-invest elsewhere, or higher prices incentivize development and growth of the city.
They also should explain to Vancourites that the new Chinese billionaires that the locals loathe either bought their PR visa from a provincial nomination program, thus are exempt from the new tax — or are too rich to care about 15%
And finally, they should explain how unenforceable the vacancy tax will be. The idea of Stasis style neighbours reporting on each other is insane, and certainly at odds with my understanding of Canadian values.
Public Housing as a Solution
Some articles found comparable foreign ownership restrictions in Hong Kong, Singapore and Australia.
I think beyond those taxes and restrictions, we should also keep in mind the following:
~30% of Hong Kong residents are living in some form of public housing
~80% of Singapore residents are living in Housing and Development Board constructed homes
This Opinion is Mine Alone
I had this uneasy feeling about the PTT for a few days now, and I couldn’t fully express it in Facebook comments and Tweets. But it’s just an opinion, please be gentle in your responses, you probably are not racist. But as the beneficiaries of this free and open country, I hope we will consider the past.
