British Columbia is introducing an additional transfer tax for foreign real estate buyers in Metro Vancouver.
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Mayor Lisa Helps says she is disappointed that it wont be applied locally, but the city will take a “wait and see approach”.
Housing in Vancouver is now subject to a tax when purchased by a foreign national.
Knight Frank researcher Kate Everett-Allen said the proposed legislation, which has to be passed by the provincial legislature, enables British Columbia to expand it beyond Vancouver and adjust the tax rate within a range of 10 to 20 percent at a later date.
He described situations where B.C. residents are fearing property nightmares because they sold to foreign buyers who may now balk at paying the new tax, which in turn threatens to kill the real estate purchases of B.C. buyers.
Clark says people who bought homes even just a year ago have already seen a 15 per cent increase in value, which should cover the tax they will pay, and the quick start date was to prevent a run on the market from driving up prices even further, however they could have kept the August 2 start and also had a grandfather clause.
The British Columbia government broke new ground this week, reporting a robust assessment on outside homebuyers in the Metro Vancouver region, something Ontario rapidly said it will observe almost as a conceivable approach to chill Toronto’s hot housing market.
Dan Morrison, president of the Greater Vancouver Real Estate Board, says the 15-per-cent tax is aimed at foreign buyers but it could impact others if foreigners walk away from their deals because of the tax.
Such as decreasing the amount of transfer tax local residents have to pay to offset the increase of revenue the government will reap from the new surtax. Jonathan Cooper is a long-time Vancouver realtor at Macdonald Real Estate Group.
With Monday’s Miscellaneous Statutes Amendment Act, the government avoided that potential pratfall, by targeting potential property buyers who have neither a Canadian passport, nor permanent residency.
The tax will be enforced by verifying a buyer’s social insurance number on property transfer forms. He speaks with Catherine Murray about the impact of the new tax. The resolution calls on the provincial government to “implement creative, innovative and flexible tools to create solutions” in B.C.’s housing markets.
“Updated data on foreign investment show more than $885 million in foreign investment flowed into Metro Vancouver’s real estate market in just five weeks”, representing one-tenth of the total value of real estate transactions during the period, according to a B.C. Ministry of Finance press release.
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All purchasers in the province already have to pay a one-per-cent tax on the first $200,000 of their purchase, two per cent on the remaining value up to $2 million, and three per cent on the portion above that.
