VANCOUVER (NEWS 1130) – The province is taking some heat from China’s Consul General in Vancouver over the foreign buyers tax that was introduced nearly two weeks ago. And Liu Fei has some pointed questions for the BC Liberals.
The two main questions: why the tax at all and why 15 per cent?
The problem the Consul is having with all this is she feels the province didn’t do anything about this issue for so long — claiming there wasn’t enough data to go on and then out of nowhere last month, announcing the levy.
Bloomberg’s Natalie Obiko Pearson spoke with the Consul who isn’t sure any tax will make a difference in this red-hot market. “Whether we’re going to be able to bring the benchmark $1.6 million home affordable again to the average Vancouver person. And the Consul’s opinion on that was, ‘Will even a 50 per cent tax on foreigners work?’ And she’s skeptical.”
She feels foreigners are being blamed for housing affordability issues across the region, but that really there are other components like there are too many areas in Vancouver zoned solely for single-family homes.
“There are many factors contributing to high prices such as a public transport system that’s not extensive enough which makes it more difficult for the city to grow outwards. Still, compared to a lot of other big cities in the world, there aren’t a lot of condos. She was saying, densification [and] taller buildings have to be built and also more timely data to better match supply with demand,” adds Pearson.
About one week after the tax was brought in, Dan Morrison with the Real Estate Board of Greater Vancouver had asked his agents to estimate how many sales may fall through because of the tax, and the number he got back was 427.
He adds that figure is just a prediction which is “far from scientific,” but he adds it could be the beginning of things to come.
The provincial government implemented the tax to single out foreign buyers as a way to cool demand in the red-hot market. For context purposes, the tax will amount to $300,000 on the sale of a $2 million home.
The tax can also be increased and decreased between 10 and 20 per cent. Regional districts outside of Metro Vancouver can also be included if the tax pushes foreign buyers to other areas.