One of the things that makes my job as a public-opinion researcher so compelling is having the chance to test how the population will react to a particular issue or decision. A recent opportunity arrived with the perceived outcry from individual homeowners to the changes in taxation that were announced by the B.C. government in the latest budget.
A poll conducted earlier this month showed that more than four-in-five British Columbians thought three items included in the budget were “good ideas:” Increasing the foreign-buyers tax from 15-20 per cent (82 per cent saw it as a “good idea”), introducing a “speculation tax” of two per cent of a property’s assessed value for vacant homes whose homeowners pay no income tax in B.C. (81 per cent) and expanding the foreign-buyers tax to areas outside of Metro Vancouver (also 81 per cent)
The foreign-buyers tax has always been popular with residents. Increasing it by five percentage points and taking it to other areas that could potentially be attractive to foreign investors makes sense for many. A speculation levy for those who pay no taxes in the province is also regarded positively. But what about the government’s proposal to increase the property-transfer tax from three to five per cent for homes valued at more than $3 million? The idea was welcomed by 77 per cent of British Columbians.
A hypothesis, which was mentioned immediately after the budget was released, was that support for the property-transfer tax change would be extremely low among homeowners, especially in the Lower Mainland. This is simply not the case. More than seven-in-10 British Columbians who own their primary residence and reside in the Lower Mainland (72 per cent) welcomed the increase in the property-transfer tax. Among those whose property is currently valued at $1 million or more, the level of agreement is 64 per cent.
The government’s proposals are designed to cool the real-estate market and generate some revenue that could be used for specific initiatives to help British Columbians who are struggling with housing affordability. Our tracking data shows how housing, homelessness and poverty became the main concern for 50 per cent of British Columbians in January 2018. But will the efforts to make housing more affordable come at the expense of current homeowners, particularly in Metro?
With this in mind, we asked Metro Vancouverites whether they would be “happy” or “unhappy” if real-estate prices in their area dropped by 10 per cent. Three-in-four (74 per cent) said they would be “happy” if this actually took place.
Practically all Metro Vancouverites who rent their primary residence (92 per cent) said a drop in real-estate prices would make them “happy.” But a majority of homeowners (61 per cent) acknowledged that they would feel “happy” with this scenario, while 30 per cent said that it would make them feel “unhappy.” This represents a 2-1 margin on what was originally perceived as a controversial issue. British Columbians who are already in the market and amassing equity from their home don’t appear ready for a revolt against the current government.
Housing, as an issue, has transcended party banners at the provincial level and requires solutions that can be palatable for most. The polarization that we used to see in previous years with government proposals wasn’t evident in the initial reaction to the budget, particularly on the housing file. Even B.C. Liberal voters from the last election appear to be giving the current B.C. NDP government the benefit of the doubt.
Right now, with the housing proposals fresh in the minds of voters and the Opposition finding it more convenient to zero in on the changes to Medical Services Plan (MSP) premiums, the provincial government is in a good position to sell their housing stance. Still, all the goodwill that is currently outlined by a large proportion of residents can disappear. There needs to be a tangible effect from changes to existing property taxes and the introduction of a new one.
Millennials are trying to figure out if they can stay in the city where they’re currently studying or enjoying their initial work experience. Young Generation Xers are making decisions about family and may yearn for larger accommodation. These two demographic groups, which supported the B.C. NDP in last year’s election, will be particularly attentive to the opportunities that the government’s decisions may generate for them. And they will vote accordingly.