Looks like Australia is not the only country to increase property tax for foreign investors.
Foreigners buying real estate in the Metro Vancouver area of Canada will have to pay an additional property transfer tax of 15% under new rules introduced by the British Columbia government. British Columbia, commonly referred to by its initials B.C., is a province located on the west coast of Canada and houses the city of Vancouver, which has the largest population in the country.
The new legislation, which takes effect on August 2, will see a 15% property transfer tax imposed on foreign nationals buying residential real estate in Metro Vancouver, from Bowen Island to Maple Ridge/Langley Township. The tax also applies to corporations that purchase residential real estate, depending on the citizenship status of directors and beneficiaries. The move is aimed to reduce some of the pressure in Metro Vancouver’s overheated real estate market and to address low vacancy rates and high real estate prices in B.C.
“For example, the additional tax on the purchase of a home selling for $2 million to a foreign national will amount to an additional $300,000,” said BC Finance Minister Mike de Jong. A $10 million home would raise RM1.5 million in tax. The latest government data shows foreign buyers – mainly from China – purchased more than $1 billion worth of B.C. property between June 10 and July 14.
This could add hundreds of thousands of dollars in additional taxes for buyers who aren’t Canadian citizens or permanent residents, and potentially generate hundreds of millions in revenue that the B.C. government plans to reinvest into affordable housing projects. The revenue from the additional tax would be used to fund housing, rental and support programs.