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.

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.

Just Posted

Abbotsford International Airport headed toward major passenger milestone

Mayor predicts YXX will see one millionth passenger at end of December

Mouat grad Irons heading to Grey Cup

Former Hawks star and the Hamilton Tiger-Cats challenging Winnipeg on Sunday

VIDEO: West Coast Christmas Show in Abbotsford

Highlights from the annual event at Tradex

Langley crash slowing westbound Highway 1 traffic

Crash occurred just past 200th Street around 5:45 a.m.

Check out Abbotsford’s top 15 attractions, according to Trip Advisor

Mill Lake tops the list of things to seen and do, according to travellers’ rankings

Three people deported after Surrey brawl caught on camera: RCMP

Police say they have been ‘actively engaged’ in the issue of youth fights in Newton since March

B.C. to advocate for frustrated, confused, unhappy cellphone users, says premier

Maple Ridge New Democrat Bob D’Eith to advocate for more affordable and transparent cellphone options

B.C. man who killed Belgian tourist near Boston Bar gets life in prison, no parole until 2042

Sean McKenzie pleaded guilty to second-degree murder of 28-year-old Amelie Christelle Sakkalis

Workers union calls strike vote in SkyTrain labour dispute

Mediated talks are scheduled to begin Nov. 28

‘Very disrespectful’: B.C. first responder irked by motorists recording collisions on cellphones

Central Cariboo Search and Rescue deputy chief challenges motorists to break the habit

Daily cannabis linked to reduction in opioid use: B.C. researchers

Researchers looked at a group of 1,152 people in Vancouver who reported substance use and chronic pain

Bids down, costs up on Highway 1, B.C. independent contractors say

Rally protests NDP government’s union-only public construction

Members of little people community applaud change to drop ‘midget’ term

‘It’s not about sensitivity,’ says Allan Redford, the president of the Little People of Canada

Most Read