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Foreign nationals buy nearly $1 billion in real estate day before targeted tax

Last Updated Sep 22, 2016 at 11:24 am PDT

(iStock image)
Summary

About $850 million worth of property snapped up before 15 per cent levy was implemented

Provincial auditors reviewing most recent transactions to see if people are trying to avoid the tax

VICTORIA (NEWS 1130) – Yet more proof foreign nationals are impacting the local real estate market. New numbers released from the provincial government show foreign investment skyrocketed the day before the 15 per cent foreign buyers tax was brought in.

On July 29th, Victoria says foreign buyers racked up $850 million worth of property — that is equivalent to more than 55 per cent of all transactions registered in Metro Vancouver on that day.

The government adds foreign investment accounted for nearly six per cent of the roughly 48,000 residential real estate transactions between June 10th and August 31st of this year, which amounts to about 8.8 per cent of the $31 billion in residential property that changed hands.

In Metro Vancouver alone, 2,034 transactions worth $2.3 billion involving foreign nationals took place during that period, which represents 9.3 per cent of nearly 22,000 transactions. The 15 per cent foreign buyers tax was announced on July 25th and took effect on August 2nd in an effort to help cool the red-hot market.

However, there is a stark difference after the levy was brought in. The government says between August 2nd and August 31st, there were 60 transactions in Metro Vancouver that involved foreign nationals. And the total value of the properties transferred was $46.9 million, which is less than one per cent of all Metro Vancouver transactions during that time. These transactions raised approximately $2.5 million in additional property transfer tax revenue.

Auditors are now reviewing these deals to see if any were structured in such a way to avoid the tax.