Photo: Ruth Hartnup/Flickr
BC’s foreign homebuyer tax for Metro Vancouver will no longer apply to all non-residents.
Under changes BC Premier Christy Clark announced Sunday, non-residents with temporary work permits will be able to buy residential property in Metro Vancouver without paying a 15-per-cent levy. The tax was rolled out in August to cool the market, at the time Canada’s hottest.
“We are going to lift the foreign owners tax on people who have work permits who are paying taxes and living in British Columbia, as a way to encourage more people to come,” Clark told reporters.
“We believe that people, the best and the brightest, should be able to come to British Columbia,” she also said.
Clark didn’t provide a timeline for when this change could be implemented, but did note that legislation makes it possible for the province to make exemptions for the tax, the Vancouver Sun reports.
After posting strong gains in the first half of the year, home prices in Metro Vancouver started to dip after the broad tax was put in place.
In the Real Estate Board of Greater Vancouver’s monthly statistical report for December, the group said the benchmark price for all residential properties sold in Metro Vancouver had fallen 2.2 per cent in the past six months. The benchmark home price for the area was $897,600 at the end of last year.
“The long-term effects of these actions won’t be fully understood for some time,” said Dan Morrison, REBGV’s president, in a statement discussing government intervention into the housing market.
Foreign investment in Metro Vancouver real estate plummeted immediately after the tax took effect. But data from the BC government suggests foreign buyers are wading back into the area’s housing market.
Non-residents were involved in 4.1 per cent of all residential real estate transactions in Metro Vancouver in November, up from a 3 per cent share the month before.
However, Greater Vancouver prices continue to decline on a month-over-month basis as they rise in nearby Victoria as well as Toronto, a leading economist recently showed.
“We have enough history to now distinguish the clear divergence between Vancouver (down) and Toronto (still straight up),” commented Douglas Porter, chief economist at BMO.
For Porter, this is a good indication that foreign buyers have been looking to other markets that have yet to implement their own taxes.