Real estate experts say the B.C. government started to build a strong foundation for more affordable housing in TuesdayB次元官网网址檚 budget, but opinion varies on the expected outcomes.

Finance Minister Carole James is trying to ease the provinceB次元官网网址檚 housing crisis by introducing a new tax on property speculators, expanding and increasing a tax on foreign homebuyers and spending $6 billion to build affordable housing over the next decade.

James said she expects to see property values start to drop as her budget measures kick in.

B次元官网网址淲eB次元官网网址檙e an amazing province,B次元官网网址� she said Wednesday after speaking to the Greater Victoria Chamber of Commerce. B次元官网网址淭hereB次元官网网址檚 no question people are going to want to live in B.C. But we need to see a moderation and my hope is, by addressing both supply and demand, youB次元官网网址檒l see more supply in the market that will ease some of the cost pressures and youB次元官网网址檒l see a moderation.B次元官网网址�

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Cameron Muir, chief economist at the Real Estate Board of B.C., said plans to help build 114,000 affordable housing units will offer much needed supply for rental and low-income properties.

But he said a tremendous undersupply of available homes in Metro Vancouver, Victoria and Kelowna, coupled with B.C.B次元官网网址檚 strong economy, will keep home prices from dropping.

B次元官网网址淚n terms of market impacts, it may be great to raise tax revenue, but this is not going to have a demonstrable impact on housing markets,B次元官网网址� said Muir. B次元官网网址淭he chief culprit of rising home prices is the inability to supply the housing market in a timely fashion.B次元官网网址�

Tom Davidoff of the University of British ColumbiaB次元官网网址檚 Sauder school of business said he hopes the speculation tax will help make the lower end of the market more affordable, particularly for condos.

The levy will be introduced this fall, targeting foreign and domestic homeowners who do not pay income tax in B.C., including those who leave homes vacant.

In the 2018 tax year, the rate will be $5 per $1,000 of a propertyB次元官网网址檚 assessed value. Next year, the rate will rise to $20 per $1,000 of assessed value. It will initially apply to Metro Vancouver, the Fraser Valley, the Victoria area, the Nanaimo Regional District, Kelowna and West Kelowna.

A non-refundable income tax credit will also be introduced to offset the new levy, providing relief for people who do not qualify for an exemption but who pay income taxes in B.C.

The tax makes a lot of economic sense, Davidoff said, because B.C. has high income and sales taxes but low property taxes, which encourages vacationers to buy property and makes life more expensive for workers.

B次元官网网址淭hat is the worst possible idea in a market like Vancouver where you have a tremendous amenity level and itB次元官网网址檚 so hard to build,B次元官网网址� he said. B次元官网网址淲eB次元官网网址檙e such a draw for people who donB次元官网网址檛 want to work here, but do want a lovely vacation home.B次元官网网址�

People who are affected by the new levy might sell their properties, freeing up housing for locals, he said.

One issue the budget didnB次元官网网址檛 directly address is zoning, Davidoff said, adding that the taxes on speculation and foreign buyers might provide some indirect help because they will B次元官网网址渂ashB次元官网网址� the high end of the real estate market. That encourages people to push for changes in zoning density to keep their property values up, he explained.

B次元官网网址淭he property they own is going to be worth a lot less than it was before this tax. When you have new zoning, thereB次元官网网址檚 a trade off B次元官网网址� your property becomes more valuable because you can put greater density on it, but you donB次元官网网址檛 like whatB次元官网网址檚 happening to your neighbourhood,B次元官网网址� Davidoff said.

He said the changes make it more attractive for people to subdivide a single luxury property into five or six moderately priced properties.

- With files from Gemma Karstens-Smith in Vancouver.

Dirk Meissner, The Canadian Press