Agents breathing relief on spec tax

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The news of B.C. Premier Christy Clark formally rejecting the idea of a speculation tax for property flippers was met with praise from one industry agent who said the plan was “ridiculous.”

“It made no sense to begin with so I’m not surprised; it was a ridiculous idea,” said John Lovelace, an industry vet and agent with more than 20 years of experience.

“It’s always a slippery slope for a politician to get involved in a market with so much money involved and while I get what [the Mayor of Vancouver] was trying to do, I don’t think he had much of a plan.”

His comments come following a two-page response that was sent to Vancouver Mayor Gregor Robertson from the Premier, outlining her reservations about introducing a speculation tax that would create hikes to drive down prices.

The Premier responded following initial efforts from Robertson and Bob Rennie, owner and founder of Rennie Marketing Systems, to bring attention to the issue of affordability in Vancouver.

“Using any method of new taxation with the goal of driving down the price of housing could have the unintended effect of hurting current homeowners across the region,” Clark said in an interview.

“Driving down the cost of housing by just 10 per cent would mean a family with a home currently worth $800,000, could lose $80,000 in equity in their home. That could put some homeowners with large mortgages into negative equity.”

She also added that Vancouver civic fees and levies add $76,144 to the price of a new condo unit, and suggested that more supply is needed to make for better use of land.

Despite the Premier’s assertions, Lovelace did admit that there just may not be enough land available in the Lower Mainland to create real affordability.

“There really is no real answer there," he added. "The Lower Mainland area is small and there aren’t many places left to build so there’s not much you can do.

“What we’re seeing is the result of free enterprise and, as an agent, I know what the laws are and how to communicate to my clients so I don’t want that messed with by politicians if they don’t have a concrete plan.”