I think the logic is that if you're a local, the primary purpose of the residence is for living, not speculation. If prices drop your illiquid asset # drops, but you still have a place to live and you're going to pay less property tax. Of course, people could end up underwater, but that's all dependent on how crazy a mortgage they were able to get (I think there is less craziness here than there was in the run up to 2008 amurica).
Yes, some people will get screwed. Hopefully this will result in less locals being screwed than if nothing was done.
Given that current prices were completely out of whack, and that the govt kept warning that something will be done ... people who bought at the peak deserve what they got. I've been sitting on the fence (since the math didn't make sense) for years. All we got for being prudent was annual moves and seeing other people's homes paying them more than a 1%er's yearly salary. I welcome this move by BC. Ontario needs this stat for the GTA. We also need to tax the gains from home sales. The situation has gotten so bad, young people are leaving in disgust.
I just bought a 450K house in Victoria knowing I'll take a haircut. The problem with timing the market is it simply hasn't crashed and I'm out of time - it's time to start a family.
450K for a house seems cheap. In the GTA, you won't even get a townhouse for that much. A townhome (with monthly fees) probably goes for over 650K :'( I don't understand it.
If locals didn't overstrech financially to buy something they can barely afford, they should be able to weather the storm. If they blissfully took on massive mortgages in a highly overvalued market, well, I think they might get the short end of the stick. I don't think governments should provide safety net for foolishly risky behaviour.
Yes, some people will get screwed. Hopefully this will result in less locals being screwed than if nothing was done.