This week we heard that B.C. intends to bring in a real estate tax on foreign buyers.
Foreign investors who now dare to purchase real estate in Metro Vancouver would pay an additional property transfer tax of 15 per cent under legislation introduced on July 25 by the provincial government.
The finance minister indicated, “the tax is aimed at addressing low vacancy rates and high real estate prices in southern B.C.”
The legislation also includes a provision that would also enable the City of Vancouver to amend its community charter in order to levy a vacancy tax.
This is great news for Victoria area developers, and municipalities outside of the Lower Mainland that have promoted development.
More specifically, the law of unintended consequences will result in any future foreign investors parking their money in Victoria and possibly the Okanagan. As Adam Smith indicated over 200 years ago, money can walk when supply and demand are manipulated.
Moreover, if the province were to implement this policy province-wide it would unduly depress prices in markets where demand is soft already.
More specifically, no municipality outside of the Lower Mainland would support this restriction on ownership.
In other words, this policy and tax initiative is likely to remain a Lower Mainland measure. That would be fine with the Okanagan crowd, as Kelowna prices start to creep up.
We should all send the finance minister and the mayor of Vancouver, a big thank you for sharing the wealth.
As a resident of Langford, I would love to see more foreign investment in my municipality.
This municipality has a great mayor and council with a proven track record in attracting investment in one of the most rapidly growing communities in B.C. Their job just got easier.