Vancouver's Flimsy Foreign Tax
The 15 percent charged to offshore buyers won’t slow the real estate market—there are too many loopholes to make it effective
BY KERRY GOLD
When bc premier Christy Clark announced that foreigners would be charged a 15 percent tax on real estate purchases, Vancouver residents who’d been grumbling for the last year were left dumbfounded. With an electorate accustomed to political leaders working hard to ignore the problem, the decision went beyond wildest expectations.
The real estate industry routinely trivialized foreign buying as representing a mere 5 percent of the market, and the province echoed its claim. But before the tax was introduced on July 25, government data showed that foreigners had purchased close to $1 billion of Metro Vancouver real estate over a five-week period beginning June 10. The data was sound, said finance minister Mike de Jong. We officially had a problem.
In the week that led up to the rollout, foreign buying went into turbocharge. Lawyers and notaries worked overtime to help their clients dodge the tax before it came into effect August 2, just before the BC Day long weekend. Over a two-day period, more than 15,000 transactions went through the land title office—86 percent of the buying happened in Metro Vancouver. For the buyer, it was well worth the effort. If they were purchasing a typically priced house on the city’s west side for $2 million, it meant saving an extra $450,000.
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