Excellent article on why the social contract and stability requires us to curb housing speculation and tax foreign ‘investment’ flows. Read Speculation tax is essential for housing affordability:
A problem arises, however, when people can buy housing with income or wealth not generated locally, and yet are still able to use social services — education, health care, etc. — and infrastructure — roads, bridges, legal system, etc.
If property taxes are comparatively low, as they are in B.C., this allows such individuals to pay much less than their fair share of taxes. They can, in short, free ride on the contributions of others.
What will be the effect of that dynamic? If the jurisdiction is an attractive place to live, it will mean that wealthy people from around the world will want to place their families there. They will buy expensive housing, pay minimal income taxes, and enjoy public amenities and services — all for the modest cost of their property taxes.
That prevailing dynamic means that housing prices come to reflect the purchasing power of a global elite, not local working people. Those working people, meanwhile, are left to subsidize that elite with their income taxes, and they struggle to save up enough to pay for what is now unaffordable housing.
…Should young working British Columbians [or Ontarians or anywhere else] be forced to subsidize those who are using foreign funds to out-compete them for housing? Would you accept that situation if you were in their shoes?
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