MLAs, realtors, and prospective owners upset at government and loophole
By Mercedes Deutscher, News Editor
Foreign buyers will now have to pay an additional 15 per cent tax on Metro Vancouver property, according to new legislation passed by the provincial government on July 25. The legislation came into effect on August 2.
In contrast, those living in BC only pay a one per cent tax on their property.
The fast track of the new tax comes as a surprise to some. While Vancouver Mayor Gregor Robertson has been advocating for a tax since May 2015, the BC Liberal government has previously maintained an opposition to enforcing one due to a perceived lack of evidence. That is, up until mid-July, when Premier Christy Clark claimed there was new data to support the theory that foreign ownership has contributed to the housing crisis, according to CTV.
“I’ve been calling for years now for the province to take bold action to deal with housing affordability, and the impact of global capital on our market here,” said Robertson to CBC.
An Angus Reid Institute poll showed that 90 per cent of respondents were in favour and approved of the tax. However, several parties have voiced concern since the tax was announced, including 71 per cent of the poll’s respondents.
Many believe that the tax will not be effective long term. An email sent by Mike Stewart of Century 21 advised potential clients to invest in pre-sale condo units under the names of resident family and friends in order to avoid the tax. Stewart has since come under scrutiny from both Clark and the Real Estate Council of BC. Clark responded with a warning that there will be increased auditing activity around pre-sale condo units sold around and after the implementation of the new tax.
Meanwhile, realtors have expressed disapproval of how fast the tax was implemented and questioned how much input was put into its development.
Dan Morrison, President of the Real Estate Board of Greater Vancouver, said in a statement that the government “…has had a long time to take action on the affordability issue, yet they decide to bring this new tax in …with no notice, and no time to prepare.” Morrison expressed disappointment at the fact that seemingly few realtors or housing experts were consulted.
Some, such as Stewart and NDP MLA David Eby are calling the tax unfair to those still settling into the region. Those who are not Canadian citizens or permanent residents can be taxed as foreign buyers—including refugees, stateless people, and new immigrants.