Clark gov’t announce changes to foreign buyers tax
Like it or loathe it, the B.C. Liberals’ 15-per-cent foreign homebuyers tax was unquestionably the real estate story of the year in 2016.
The controversial story took a sharp turn Sunday when Christy Clark announced her government would lift the tax for people living in B.C. who have work permits and pay taxes.
The tax was implemented Aug. 2 in a bid to cool real estate prices in Metro Vancouver. The effect was swift as the market reacted to the news. But there was a story behind the tax, meant to temper foreign buyers – the new tax also affected working families moving to B.C.
For example, a telecom worker from Colorado, who was set to move with his wife and four daughters last summer, had to walk away from a home in Langley. The new tax added an extra $80K to the purchase of the home he was slated to buy. The sudden, unexpected increase was too steep for the couple, who, according to the CBC had to walk away from the deal, losing their $25K down payment as a result.
A Vancouver Sun article says that Clark made the statement during a scrum at Vancouver’s Chinatown Lunar New Year Parade in response to questions on U.S. President Donald Trump’s travel ban on people from seven predominantly Muslim countries. The Sun reports that Clark said the ban was lifted “as a way to encourage more people to come [to B.C.].”
What the foreign buyers tax means
Details on the new adjustments to the foreign tax are yet to be announced, including when the new policy will come into effect (stay tuned here, as we will update when that info is made available) and whether it will retroactively affect those who live and work here and have already paid the tax.
“Now that the additional tax has effectively cut back the excessive demand we were seeing last year, we are in a position to make the adjustments necessary to help ensure we can keep attracting highly skilled workers,” says an email statement from the finance ministry.
With the immigration changes and uncertainty south of the border, B.C. is poised to be even more attractive to specialized foreign workers.
How we can help you understand the foreign investment
Working with a trusted, expert REALTOR® ensures buyers and sellers are armed with the latest information related to the tax changes/updates. At VPG, we help guide buyers and sellers to understand what government legislation means for the sale or purchase of their home, and make sure they have expert advice.