The 15 per tax on foreign buyers are driving Chinese investors from looking into purchasing properties in Vancouver. A well known business tycoon in China seems to be trouble by BC’s tax on those from outside Canada buying homes in Vancouver. He is intending on speaking with the Prime Minister, Justin Trudeau concerning this matter.
Frank Wu who is the vice-president of the China Real Estate Industry Association and the Chairman of Central China Real Estate Ltd is currently on a tour in Canada with some other delegates from China, as they are looking at strengthening the economic bond with Canada. He has further plans to have a talk with Prime Minister Trudeau concerning the discussion of the tax issue sometime next week.
The foreign tax to have prices curbed was introduced two months after the Bank of Canada cautioned on the impact of foreign housing demand on domestic house prices in areas like Toronto and Vancouver. Frank said he truly understands where the government is coming from and sees the need to have the tax imposed, he isn’t trying to have the tax eradicated, rather he suggests it should be specifically targeted.
The tax will drive Chinese investors and cause them to focus more on other markets in Canada, or worse, invest in other countries like the United Kingdom, Australia and the United States. Most of the investment in Canada makes up about $2.3 billion of foreign cash during June to August, right before the tax was introduced.
A statement read; “While investment from outside Canada is only one factor driving price increases, it represents an additional source of pressure on a market struggling to supply enough new homes. The additional property transfer tax in no way changes our belief that strong ties with jurisdictions around the world benefit British Columbia.”
The tax did not put an end to the surge of home prices in Vancouver, last week recorded the average house price to have increased to $1.19 million in that trimestrial period, for the same quarter of 2015. Wu claims to not be discouraged or feel threatened from investing into Canada’s housing market, despite the concerns of his customers.