B.C.’s New Tax Peeves Chinese Agents

In a supposed effort to stabilize the overheated market of Vancouver, the B.C. government’s enactment of a 15 percent property transfer tax on foreign homebuyers earlier this month has resulted in a storm of disapproval from various onlookers and sectors, especially Chinese agents and buyers, who have been blamed by many as the reason for the housing price growth.

Jack Li, a licensed real estate agent assisted several Chinese investors in purchasing about 40 homes over the past two years. However, he has recently voiced his annoyance over the hastily applied tax.

Talking to The Globe and Mail, he said, “It’s a tragedy.”

“It’s going to have an impact on me, my family and my business, even though I made a lot of contributions to the B.C. economy. I put money there. I have brought people to B.C. And I told people Canada is a good place.”

Having worked and lived in Canada for a year and a half after working as an agent in B.C, Li claimed that a substantial number of buyers who may have been interested in investing in Vancouver would be fearful instead.

“If the government had said 5 per cent or even 8 per cent, that’s reasonable. But 15 per cent, that’s a lot. That’s a very heavy tax,” Li said.

“This is not about the real estate market,” overseas sales agent Xie Xingyu agreed. “From my point of view, it’s political. It’s for votes. It’s not for home prices.”

The Chinese consul-general in Vancouver, Liu Fel reiterated the opinions of various analysts who maintained that the Canadian government ought to focus on supply-side solutions instead of nipping off demand.

Talking to Chinese media last week, she stated “If government has no plan, any policy can be the start of a disaster.”

Additionally, Canadian agents working outside Vancouver echoed these fears, stressing that expensive properties, most notably those in high-end areas, would gradually become out of reach for domestic buyers as a result.

“Where are those foreign investors going to go? They’re not going to want to pay that 15 per cent, so they’re going to now dump it into the Toronto real estate market, which is already hot,” Toronto-based real estate agent Derek Ladouceur said.