British Columbia Proposes Real Estate Tax on Foreign Buyers

An additional property transfer tax rate of 15 per cent will apply to purchasers of residential real estate who are foreign nationals or foreign-controlled corporations.

Updated figures released Monday indicated foreign nationals spent more than $1-billion on property in B.C. between June 10 and July 14, with 86 per cent being made on purchases in the Vancouver region.

For mixed-use property, the additional tax would apply on the residential component of the foreign interest in a property.

The debate over who has been driving housing prices has been rife with accusations of racism against Chinese buyers. The fund will receive an initial investment of $75 million.

The B.C. Liberal government will also introduce legislation this week that will allow the City of Vancouver to impose a tax on vacant homes; and follow through on an earlier promise to end self-regulation of the real estate industry.

Second, the government is creating a new Housing Priority Initiatives Fund for provincial housing and rental programs, which will be announced in the near future.

The B.C. government is implementing a new tax it hopes will dissuade foreign buyers from scooping up property in Metro Vancouver’s red-hot housing market. Some real estate officials say Chinese buyers, in particular, have helped fuel price increases for high-end Vancouver homes.

All purchasers in the province now 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.

He’s also pleased the province has given its blessing to tax empty homes in the city, and says the province’s role is critical.

“A day late and a dollar short from premier Clark and her crew”, he said.

“It’s a much better measure and we wish they would do it”.

The president of the Greater Vancouver real estate board, meanwhile, accused the government of acting too quickly.

“People who use housing exclusively as a means to make money – rather than living and working in Vancouver – should be taxed as such”, Robertson said in a statement. “Implementing a new real estate tax, however, with just eight days’ notice and no consultation with the professionals who serve home buyers and sellers every day needlessly injects uncertainty into the market”.