Foreign buying of Metro homes plunged after new tax

Less than one per cent of Metro deals involved foreigners in August, down from 13.2 per cent in the previous six weeks

The number of Metro Vancouver homes sold to foreign buyers has plunged.

The number of Metro Vancouver homes sold to foreign buyers has plunged.

New numbers show a near-total collapse in the number of Metro Vancouver homes bought by foreign nationals in August after B.C.’s new 15 per cent foreign buyer tax kicked in.

Just 60 transactions with foreigners were recorded in Metro in August – 0.9 per cent of the total – down from 1,974 or 13.2 per cent in the previous seven weeks.

The new numbers were released Thursday by the finance ministry.

The value of foreign deals in Metro plunged from $2.3 billion for the seven weeks prior to the new tax taking effect to less than $47 million in August.

RELATED: B.C. urged to tighten scrutiny of foreign investors after spike in cash seized at YVR

Premier Christy Clark noted a huge surge of transactions were rushed through in late July – $850 million worth involving foreigners on July 29 alone – so they’d close before Aug. 2 and not be subject to the new tax.

“Lots of people moved their transactions into July from August because they wanted to avoid paying the tax,” Clark told reporters. “So I think we’ll start to see the numbers change a little bit in the coming months.”

Clark said the apparent dramatic effect of the tax was the goal of government in setting a rate for foreign buyers that some people argued was too high.

“That is the impact we wanted to have,” she said. “My hope is that many of those units that might have otherwise sold to foreign buyers will be open for British Columbians to buy, because we want to put British Columbians first.”

Clark also said she expected the tax would face a legal challenge. A Chinese student who was hit with an $80,000 foreign buyer tax bill on the Langley townhome she bought is leading a proposed class-action lawsuit on behalf of foreign buyers.

In the rest of the province outside Metro Vancouver – where the tax is not levied – there were 189 property transfers by foreigners, or 1.7 per cent of total transfers, worth $109 million. That was down from 3.6 per cent of the transfers in the rest of the province by foreigners prior to Aug. 2.

Foreign buyers made up 3.7 per cent of transactions in August in the Capital Regional District.

Finance Minister Mike de Jong has indicated the province would watch regions outside of Metro to gauge if the foreign buyer tax should be extended to additional areas.

Within Metro, foreign buyers made up 0.9 per cent of August transfers in Vancouver, 1.9 per cent in Richmond, 0.6 per cent in Surrey and 1.0 per cent in Burnaby – down sharply in each case from more than 24 per cent in Burnaby and Richmond before the tax took effect.

The amount of extra tax levied from foreign buyers in August was $2.5 million.

But finance ministry auditors are examining some transactions to see if they were structured to dodge the tax and whether reassessments are necessary. Suspect transactions include ones where a foreign buyer and a Canadian citizen or permanent resident were both included on title, with the extra tax only owed on the portion of the value claimed by the foreigner.

The province is also checking the citizenship of buyers who claimed to be tax-exempt Canadians or permanent residents and has vowed to audit any anomalies or cases where social insurance numbers don’t match.

The finance ministry has estimated it would generate $165 million a year in new revenue, which the province intends to use to fund new affordable housing initiatives.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

BC Coroners Service is currently investigating a death at Canoe Cove Marina and Boatyard in North Saanich. (Black Press Media File)
Drowning death in North Saanich likely first in B.C. for 2021

Investigation into suspected drowning Monday night continues

Located at 9750 West Saanich Rd., this North Saanich mansion is on the market for $10.25 million. (Realtor.ca photo)
Located at 9750 West Saanich Rd., this North Saanich mansion is on the market for $8.65 million. (Realtor.ca photo)
The five most expensive homes for sale in Greater Victoria

A roundup of luxury estates currently on the market

The Greater Victoria School District and two retired teachers are named as defendants in a lawsuit alleging that a student was sexually abused in the early 2000s. (Pixabay photo)
Former Saanich student files sexual abuse lawsuit against school district, retired teachers

Lawsuit claims student was groomed, abused by retired teacher

(Black Press Media file photo)
Mechanical issues blamed for Saanich car fire

‘Nothing untoward’ suspected, no injuries reported, firefighter says

Sidney's Beacon Wharf
Pontoon company piqued at prospect of public-private partnership around Sidney wharf

Seagate approached to submit proposeal for public-private partnership

Toronto Public Health nurse Lalaine Agarin sets up for mass vaccination clinic in Toronto, Jan. 17, 2021. B.C. is set to to begin its large-scale immunization program for the general public starting in April. THE CANADIAN PRESS/Frank Gunn
B.C.’s COVID-19 mass vaccinations expected to start in April

Clinics to immunize four million people by September

Terry Keogh, an RDN Transit driver, used his paramedic skills the morning of Jan. 22 after coming across an unconscious woman along his route in downtown Nanaimo. (RDN Transit photo)
Nanaimo transit driver stops his bus and helps get overdosing woman breathing again

Former EMT from Ireland performed CPR on a woman in downtown Nanaimo on Friday

Chief Public Health Officer Theresa Tam speaks during a daily briefing in Ottawa. (THE CANADIAN PRESS/Adrian Wyld)
31 cases of COVID-19 variants detected in Canada: Health officials

Dr. Theresa Tam made announces 13 more variant COVID-19 cases in Canada

Daily COVID-19 cases reported to each B.C. health region, to Jan. 20, 2021. Island Health in blue, Northern Health green, Interior Health orange, Vancouver Coastal in red and Fraser Health in purple. (B.C. Centre for Disease Control)
B.C.’s COVID-19 infection rate stays stable with 508 cases Friday

Vaccine delivered to more than 110,000 high-risk people

Black Press file photo
Investigation at remote burned-out Vancouver Island cabin reveals human remains

Identity of victim not released, believed to be the owner of an SUV vehicle found parked nearby

Angela Waldick is the new team photographer for the Nanaimo NightOwls. (Nanaimo NightOwls photo)
Half-blind photographer will help new Island baseball team look picture-perfect

Nanaimo NightOwls say legally blind team photographer is making history

School District 57 headquarters in Prince George. (Mark Nielsen, Local Journalism Initiative Reporter)
Prince George school district settles with sexual abuse victim

Terms were part of an out-of-court settlement reached with Michael Bruneau, nearly four years after he filed a lawsuit

Surrey provincial court. (File photo: Tom Zytaruk)
New COVID-19 protocols set for provincial courthouses

The new rules were issued on Jan. 21, and took effect immediately

Dog owners, from left, Marlyn Briggs with Nayla, Marjory Sutherland with Effie and Mick, and Christina Godbolt with Conon walk their pets frequently at the Chemainus Ball Park but are growing increasingly concerned about drugs being found discarded in the area. (Photo by Don Bodger)
Puppy rushed to emergency 3 times after ingesting drugs in Chemainus public spaces

Dog owners walking in Chemainus parks urged to take caution

Most Read