In August 2016, the British Columbia government introduced a 15% tax on foreign buyers with the aim of cooling down home prices in Vancouver. By the end of 2016, home prices in the city had begun to go down and many attribute this decline to the tax.
But for some market critics; they claim that home prices in Vancouver had already begun to decline in July before the tax was implemented.
However, the British Columbia Premier Christy Clark on Sunday announced that there will be an exception as to whom the tax will affect. With many foreign workers affected by the tax, they pleaded with the premier to exclude them from the tax as they have already been paying other taxes.
Foreign residents with working permits will no longer be affected by the 15% tax when trying to buy homes in Vancouver.
According to Clark in an interview, she stated that “we are going to lift the foreign owners tax on people who have work permits who are paying taxes and living in British Columbia, as a way to encourage more people to come.”
She added that the province should be also to welcome diversity as it enhances growth.
After the tax was put in place, there was a drop in foreign activities by 2.2% and by the end of 2016; the average home price in Vancouver was $897,600.
Dan Morrison, REBGV’s president voiced out his opinion that the implications of the tax is yet to be discovered which serves as a warning that the government should have second thoughts about policies they decide to make.
Despite the fact that there was a drop in foreign buyers by the end of 2016, foreign investors have recovered from the tax shock and the British Columbia states that foreign buyers are flooding back to the city.