Foreign buyers with work permits who live and work in British Colombia will no longer need to pay the 15% homebuyers’ tax introduced in August last year.
The new foreign buyer’s tax was aimed at cooling demand and improving affordability in one of the world’s hottest housing markets. As we reported in our latest Global Residential Cities Index, prices in Vancouver increased by 24% in the year to September 2016.
The tax looks to have had the desired effect; data for November 2016 shows 204 sales involved foreign buyers in the Metro Vancouver area compared to over 1,970 transactions that took place in the seven weeks prior to the tax’s introduction.
The premier’s office said full details will be released soon, but an exact date when the policy change comes into effect has yet to be confirmed.
Concerns from employers, many in the tech and advanced education sectors, about the impact of the tax on their ability to recruit workers to live and work in the province, is believed to be behind the change in approach.
Kevin Skipworth, Managing Director of Dexter Associates Realty, Knight Frank’s partners in Vancouver, comments: “This was a necessary change but how it will unfold is still not known. The tax has had a big psychological impact on the market and this change may ease some of the uncertainty enabling buyers who contribute to the local economy to now enter the property market without facing extra costs.”
For more information on the Vancouver property market please contact Kevin Skipworth or to see how price growth in Vancouver compares with other cities around the world read our Global Residential Cities Index.