Monday the 25th of July marked the day the government of British Columbia declared that it was going to impose a 15% tax on foreigners looking to buy homes within the Metro Vancouver area.
Foreigners are defined as non-Canadian citizens, those without a permanent residency status or international students and foreign workers looking to purchase a home within the region.
The tax has been imposed as a possible resolution to the phenomenal hike in Vancouver’s house prices. Prices have skyrocketed as rising demand and limited supply have been the general reason as to why. In response to this, the British Columbia government has imposed the 15% tax in the hopes that it would discourage buyers; reduce demand and ultimately bring down the turbulent house prices. If this fails and foreigners are still not put off by the tax, the B.C government would at least bring in more revenue as a result.
The province of Ontario has declared that they are by no means total bystanders during this whole process. During a recent press conference, the province’s finance minister, Charles Sousa, had this to say:
“I welcome what British Columbia is putting forward, and we’re certainly looking at whatever options can be made available.”
Despite admitting that Ontario will be closely monitoring the impact the tax will have on B.C, Mr. Sousa was quick to point out that his own government is mindful of implementing the tax in its own province. The reasons for scepticism is mainly due to the other parts of Ontario that have not experienced the peaks in prices occurring in Metro Vancouver.
Observers believe B.C’s tax could force foreign buyers to buy homes in places like Ontario instead; as such tax is yet to be implemented within its borders. Perhaps when this occurs and triggers a rise in demand as well as prices in Ontario, the provincial government will be more inclined to introduce taxation on foreign home buyers as well.