Good afternoon ,
Today, the BC government announced their intent to introduce a 15% property transfer tax on foreign buyers of residential property in the Vancouver region effective August 2. This is a first-step in legislation intended to keep home prices within reach of middle-class British Columbians.
According to Finance Minister Mike de Jong, the new tax will apply to the sale of all residential properties within Metro Vancouver, excluding treaty lands in the Tsawwassen First Nation. The tax will apply to buyers who are not Canadian citizens or permanent residents, as well as corporations that are not registered in Canada or controlled by foreigners.
The tax rate is one percent on the first $200,000 and two percent on the remaining value, based on the fair market value of the property at the time of the transfer. For example, the additional tax on a $2-million home would amount to $300,000. The new law also gives the province the ability to adjust the tax rate to between 10 and 20 percent.
The government has introduced this tax in response to growing concerns over an over-heated housing market and affordability issues for Vancouver residents. The new tax is a legislative move to try to limit demand in response to provincial statistics released on foreign ownership in the past month.
Premier Christy Clark stated, "I want to keep home ownership within the grasp of the middle class in British Columbia,” at a Monday morning news conference in Victoria.
The government intends to put the funds raised from this tax into a special housing account to fund housing affordability projects, rental supply and housing support programs. The BC government is putting $75 million into the fund initially.
The legislation would also enable the City of Vancouver to amend its community charter in order to levy a vacancy tax.
We will keep you posted on housing legislation as it affects the BC housing market and potential similar legislation in other regions of Canada.