Vancouver’s powers-that-be are re-thinking a 15% levy on foreign buyers, which was introduced last August in an effort to take the runaway property market off the boil.
Knight Frank reported that Vancouver’s property values rocketed by 24% in the year to September 2016, prompting officials to look at ways to dramatically quell demand. A 15% transaction tax on non-resident buyers, introduced in August, did just that; Knight Frank’s 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.
But it sounds as though there have been unintended consequences in the labour market…
Christy Clark, British Columbia’s Premier, has announced that the levy will be lifted for those who have a work permit and pay taxes in B.C., although a date has yet to be set for the change. There are rumours that tax refund might be in the offing for some buyers too, as the leadership tries to make high-skilled foreign talent – particularly in the tech and education sectors – feel welcome again.
Kevin Skipworth, Managing Director of Dexter Associates Realty, Knight Frank’s partners in Vancouver: “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.”