VANCOUVER (Web Desk) – Providing affordable housing is challenge for governments around the world including Pakistan. With more and more people migrating to cities, the situation has been worsening for decades, but the prevailing economic crisis means a majority of the population isn’t “eligible” to even dream of buying a home.
It is a Herculean task for governments to find solutions and arrest the rise in property prices amid the alarming inflation, high interest rates [mortgage rates] and shrinking purchasing power.
However, British Columbia – a province in Canada on its Pacific coast – has opted for an innovative solution – taxing the wealthy to bridle the property business.
Reuters says British Columbia is seeking to introduce a tax of up to 20 per cent on profits made from selling a residential property within two years of purchase
The new property flipping tax announced as a part of its 2024 budget will impose a 20pc tax on income earned from properties sold within 365 days of purchase. The tax will decline to zero between 366 and 730 days after the purchase.
However, the new property flipping tax will also have certain exemptions like divorce, death, disability and relocation, among other things,
The proposal is subject to legislative approval and is separate from federal property flipping rules. The move is aimed at discouraging speculation which can push residential property prices quickly higher.
Canada is facing a housing affordability crisis, which has been blamed on an increase in migrants and international students, fuelling demand for homes just as rising costs have slowed construction.