As of today, foreign investors will have to pay an additional property transfer tax of 15% to acquire residential property in British Columbia, as the Canadian province steps up efforts to fend off more foreign investment.
Provincial authorities say the move is designed to make it easier for more locals to buy property, with many people blaming foreign investment as the main driver of soaring property prices in the region.
The city of Vancouver, for instance, which is the most populous city in British Columbia, has seen a sharp increase in the volume of foreign home purchases over the past 20 years, the majority of whom come from China.
The new surcharge applies to all residentially-zone property in the province, including those purchased by foreign-controlled firms, but commercial properties are not covered under the new rules.
But there is concern among the property industry leaders that the new property tax for foreign buyers will hurt the province’s housing market, as well as the wider economy.
Bob de Wit, the chief executive of the Greater Vancouver Home Builders’ Association, said that there has been much concern among foreign buyers who signed pre-sale properties agreements and have tried to avoid paying the tax before it became law today.
“There's basically a lot of panic out there and we're trying to keep people calm,” he said.
De Wit estimated there are 2,300 pre-sale properties in Metro Vancouver alone that are connected to foreign buyers.