Vancouver’s Tax Turning Heads

The chief economist of the Canadian Real Association made a statement saying; “Single family homes sales were already cooling before the new land-transfer tax on foreign home buyers in Metro Vancouver came into effect. The surprise announcement of the new tax caused sales to brake hard.”

From what the Canadian Real Estate Association said, the sales of current homes in the country went down last month, which was the fourth consecutive month to experience a decline in sales figure. The drop which was the largest decline in a month in over two years followed by the new tax on foreign buyers was introduced in Vancouver.

The sales of homes in Vancouver went down by 26% in the month of August compared with the same month in 2015. Toronto will also follow after with their own buyer’s tax. An economist at CIBC, Benjamin Tal said that Ontario will have no other option than to endorse a tax for foreign home-buyers, just like that of the 15% additional tax that was passed for foreign buyers purchasing homes in Vancouver, and now fully in effect.

Demand has been brought up in other cities, the likes of Toronto, which is causing a huge deal; because of Vancouver’s tax. The economist, Benjamin Tal believes that Toronto will have to end up endorsing a tax, which will cause the multi-year rise in the real estate market to come to an end. He said: “Policymakers have to use demand tools to deal with what is essentially a supply problem. Ontario will have little choice but to do the same.”