Foreign Purchases of Local Homes Hit Brakes after Tax Introduction: New Data

New figures from BC finance ministry reveal flood of sales to foreign buyers in week between tax announcement and implementation, then a hard stop in August

Joannah Connolly
REW

The new 15 per cent additional Property Transfer Tax on sales of Metro Vancouver homes by foreign nationals has caused those buyers to hold off  purchasing homes in the region, new data from the BC government shows.

Sales of Metro Vancouver homes to foreign nationals plummeted dramatically when comparing the seven-week period from June 10 and August 1 with the four-week period from August 2 (the first day of the new foreign buyer tax) to August 31, say statistics released by the BC Ministry of Finance September 22.

The figures for home sales to foreign buyers (identified as non-Canadian citizens or permanent residents, who may be living locally or overseas) in the whole of Metro Vancouver fell by 97 per cent from 1,974 transactions June 10-August 1 (13 per cent of all sales), to 60 between August 2 and 31 (less than one per cent of all sales).

The ministry pointed out that despite these immediate figures, it was too soon to assess the real impact of the tax, particularly there was a huge rush of sales to foreign nationals in the week leading up to the August 2 introduction of the new tax, which was anomalous. Furthermore, the periods being compared are not the same in terms of number of days, but these were the only data available as of September 22.

By individual city, the sales numbers were as follows:

• Vancouver: the number of sales to foreign nationals dropped from 508 in the seven-week period June 10-August 1, to 14 between August 2 and 31. The total value of those transactions dropped from $733 million to $11 million.
• Burnaby: sales to foreign nationals fell, in the same periods, from 262 to 5. The total value of those transactions dropped from $221 million to $2.1 million.
• Richmond: sales to foreign nationals fell from 310 to 10. The total value of those transactions dropped from $335 million to $6.4 million.
• Surrey: sales to foreign nationals fell from 318 to 10. The total value of those transactions dropped from $312 million to $6.7 million.

The full PDF report can be found on the BC Government website here.

© 2016 Real Estate Weekly