Tax On Foreign Buyers Likely To Backfire

According to the president of the Real Estate Board of Greater Vancouver, Dan Morrison, after voicing the responses of 27 brokers through an email inquiry, there will be about 427 deals likely to not be completed because of the new measure. Calculation as to the worth of sales was not performed by the group, although the value will amount to $404 million based on the minimal purchase by a buyer of $949,945 from outside the country.

This may just be the beginning of how things will turn out. The Western Canada regional executive president for Re/Max Holdings Inc., Elton Ash commented that the tax on foreign property buyers is a domino effect. He added that the foreign buyers will not be the only set of people that will be greatly affected by this, but also Canadians who have pending contracts that are to be purchased and have already put their offer on their next property. The effect of the tax will take some time before it plays out due to the deals which involve the construction of condos that are to be sold off.

Detached homes in one of the country’s third-biggest cities increased by 38 percent within a year, to $1.58 million last month, thus the country’s westernmost province deemed it fit to have the tax for foreign buyers introduced as price gain increased. The governments of U.K, Australia along with British Columbia came together to make sure the measures are imposed in order to have the market cool down, as most local residents have been complaining about it. More people came together to look at the matter in Vancouver, where there are huge numbers of investors that place bids on properties only to leave them vacant. Homes in the Metro Vancouver region will be the ones affected by the provincial levy because of three-quarter of money inflows from outside the country.