The B.C. government moved Monday to reduce some of the pressure in Metro Vancouver's overheated real estate market, introducing legislation that would add a 15 per cent property transfer tax for foreign nationals buying real estate there.
The new rules take effect Aug. 2 and only apply to home purchases in Metro Vancouver, excluding the treaty lands of the Tsawwassen First Nation.
Provincial Finance Minister Mike de Jong unveiled the tax as part of legislation aimed at addressing low vacancy rates and high real estate prices in southern B.C.
"For example, the additional tax on the purchase of a home selling for $2 million to a foreign national will amount to an additional $300,000," de Jong told the legislature.
All B.C. residents currently pay a 1% tax on the first $200,000 of their purchase, 2% on the remaining value up to $2 million and three per cent on any portion above that.
Last month, the Real Estate Board of Greater Vancouver said its benchmark price for detached properties in Vancouver had risen above $1.5 million.
A financial report last week showed the province collected about $1.5 billion from the property transfer tax in the last fiscal year, up almost $450 million from the previous year.
The revenue from the additional tax would be used to fund housing, rental and support programs, the minister said.
The government says the new tax is aimed at making housing more affordable for middle-class buyers.
De Jong said recent government housing data indicate foreign nationals spent more than $1 billion on B.C. property between June 10 and July 14, with 86% on purchases in the Lower Mainland area.
