A controversial new tax aimed at curbing foreign speculation in British Columbia's red-hot housing market might actually hurt local homeowners more than anyone else, the province admitted Thursday.

According to the Ministry of Finance, about 32,000 properties are about to be hit with the so-called speculation tax on unrented second homes. Nearly two-thirds or about 20,000 of them are B.C.-owned.

Roughly 10,000 homes belong to foreign owners, while 2,000 are owned by Canadians from other provinces.

Liberal finance critic Shirley Bond called the numbers "disappointing" Thursday.

"From my perspective, this is an asset tax," she said. "After working very hard in this province and putting their resources into an asset, this government intends to focus on British Columbians."

The province, however, insists its target is speculators.

In March, Finance Minister Carole James said the levy is intended "to make sure that we get speculators who are using our housing market as a stock market out of the business."

On Thursday, she continued to say that 99 per cent of British Columbians won't pay.

"This tax is impacting people who have second or third or fourth homes in the least affordable communities in British Columbia," she said.

"We have to address the housing crisis. There are families in this province who have not even a hope of owning a home."

Locals who have to pay the fee will face a lower rate and receive a tax credit. That means they'll only pay a combined $60 million, while non-residents will pay $140 million, even though British Columbians make up more than 60 per cent of those taxed.

While those across the aisle acknowledge that speculation is a problem in the province, they say the tax isn't the way to solve it.

"It's time for the NDP to take a look at this and look at realistic, practical ways to actually deal with the actual speculators in this province," Bond said.

This isn't the first time that the levy has sparked controversy.

Weeks after it was introduced in the February budget, pushback from vacation communities across the province led the government to announce changes narrowing the scope of the tax, which applies to those who own a home they don't live in or rent out for a majority of the year.

As it stands, the tax will start at a base rate of 0.5 per cent of the property's assessed value in 2018. It will climb to 1 per cent for Canadians outside of B.C. and 2 per cent for foreign investors in 2019.

The levy will only apply to specific communities where the province says speculation is a significant problem.

These include:

• Metro Vancouver Regional District (excluding Bowen Island and parts of Electoral Area A that aren't in the University Endowment Lands)
• The Capital Regional District (excluding the Gulf Islands, Juan de Fuca, Willis Point, East Sooke Park and Matheson Lake Park)
• Kelowna
• West Kelowna
• Nanaimo-Lantzville (excluding Newcastle, Protection and smaller islands in Departure Bay)
• Chilliwack
• Abbotsford
• Mission

The tax is expected to become law this fall.

Article from CTV Vancouver - May 17th

A down payment on an "affordable" Toronto condo could buy you a whole house in the Maritimes.

Woe be the millennial homebuyer in Canada.

Things were hard enough in recent years, with house prices rising rapidly in many cities, but a new report from Royal LePage highlights just how much tougher buying a home has become in recent months.

The federal government's new mortgage rules, instituted at the start of the year, have reduced the buying power for a "peak millennial" by about $40,000, the report said, reducing the mortgage they can get by 16.5 per cent.

Woe be the millennial homebuyer in Canada.

Things were hard enough in recent years, with house prices rising rapidly in many cities, but a new report from Royal LePage highlights just how much tougher buying a home has become in recent months.

The federal government's new mortgage rules, instituted at the start of the year, have reduced the buying power for a "peak millennial" by about $40,000, the report said, reducing the mortgage they can get by 16.5 per cent.

Working couples have a better shot at getting in the market, with a maximum price of around $406,000 for the average duo, Royal LePage noted. And pairing up isn't the only way millennials are using to get into the market.

"In major cities across Canada, a growing number of peak millennials will save, pool their money with a partner and/or borrow funds from their parents, many of whom are downsizing in retirement and can financially contribute to their child's first home purchase," the report noted.

For those discouraged by the astronomical prices in Toronto and Vancouver, the report points out there are far more affordable places to buy homes in Canada.

"A peak millennial can purchase a home in Moncton, New Brunswick for the cost of the 20 per cent down payment on a home in the market segment accessible to them in the Greater Toronto Area or Greater Vancouver."

Among Canada's major cities, there are major disparities in how much home a typical millennial couple can afford, from a high of nearly 1,800 square feet in Halifax, to a low of 788 square feet in Vancouver:

But how is a millennial even supposed to get into the market these days?

"My advice is start small," said Tom Storey, a sales rep with Royal LePage Signature Realty in Toronto.

"Get that condo, start paying it down. If the appreciation keeps going at the rate we've been having, this gives you the opportunity to trade up," he told HuffPost Canada.

Not enough young homebuyers in the years to come

But not everyone believes the price hikes Toronto, Vancouver and some other places have seen in recent years will continue in the years to come — and that's because there might not be enough millennials to keep pushing the market upwards.

Bank of Montreal senior economist Sal Guatieri recently said Canada's housing market potentially faces a decade of stagnation, as the population in the first-time home-buying age range slows in growth in the coming years. By the 2020s, "peak millennials" will be past first home-buying age, and this population could be shrinking, just as it did in the 1990s, when housing markets in Canada stagnated for years.

"We will see a much more sedate housing market over the next decade than we have seen over the past decade," he told HuffPost Canada last month.

Simply put, if you get into the market today, don't expect the home you buy to rise in value like your parents' homes did. Sorry, millennials — you get the short end of the stick on that one, too.

Hufftington Post - Daniel Tencer April 26th, 2018