Legislation has introduced a new bill that will result in foreign owners facing a much larger provincial property transfer tax when purchasing real estate in metro Vancouver.
Bill 28, Miscellaneous Statutes (Housing Priority Initiatives) Amendment Act, 2016, will come in effect on Tuesday August 2nd, and bring in a 15 percent tax on sales to foreign nationals.
For mixed-use property, the tax will apply on the residential component of the foreign interest in a property.
If you take an average home sold for $2 million, the tax will amount to $300,000. In a market that’s currently scorching, foreign investors will now be looking at hundreds of thousands of dollars in tax per purchase.
The new property tax will not apply to homes ought on Tsawwassen First Nation land however.
“The data we started collecting earlier this summer is showing that foreign nationals invested more than $1 billion into B.C. property between June 10 and July 14, more than 86% of it in the Lower Mainland,” said Finance Minister Michael de Jong.
The government is also launching a new Housing Priority Initiative Fund for provincial housing and rental programs. The fund will receive an initial investment of $75 million, and a portion of revenues from the new property transfer tax, and tax on foreign buyers.
The Province has also hinted it will launch additional measures to address rising house prices in metro Vancouver. The measures will focus on ‘ensuring the dream of home ownership remains within the reach of the middle class’, among others.