Foreigners wanting to buy a Vancouver house could receive an additional tax of 15 percent, as Canadian authorities look to temper a heated housing magazine that ranks as one of the world’s least affordable.
The tax comes into effect on Tuesday and will be levied on all home buyers in metro Vancouver who are not Canadian citizens or permanent residents. Corporations that are not registered in Canada or are controlled by foreigners will also be affected.
The provincial government of British Columbia said the tax will help to subdue Vancouver’s red-hot property market, where demand from foreign investors (many from China) has helped increased the cost of a detached home to ($1.2m) in June, a 39 percent jump from a year earlier.
“There is evidence now that suggests that very wealthy foreign buyers have raised the price, the overall price of housing for people in British Columbia,” said Christy Clark, the province's premier.
A study by the province found that foreign nationals invested over $1 billion Canadian dollars (equating to eight percent of sales) in real estate in the province, with most of the money heading to Vancouver and the neighbouring region.
For a long time, Clark has resisted calls to intervene in the real eastate and construction industries, which accounted for 25 percent of the province’s GDP in 2014.
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SOURCE: [The Guardian]