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Foreign buyers get extra tax on Vancouver home purchases

July 27th, 2016  |  Home

A new property tax coming into effect next week on Aug. 2 will mean foreign nationals who want to get into the red-hot Vancouver housing market should be prepared to fork over an extra 15%.

The announcement came yesterday when B.C. Finance Minister Mike de Jong unveiled legislation “aimed at addressing low vacancy rates and high real estate prices,” according to the Toronto Star.

The money generated from foreign purchases, which are typically high value homes to begin with, will help the government fund more housing, rental, and support programs. With the government’s recent investigation into foreign ownership in the area, they were finally able to learn just how much foreign buyers are spending in Vancouver. According to the data they spent over $1 billion on B.C. property just in between June 10 and July 14. 86% of that money went to purchases in the Lower Mainland area.

The new tax will apply to buyers registering purchases of residential homes in Metro Vancouver not including treaty lands in the Tsawwassen First Nation. The legislation also allows the CIty of Vancouver to make good on its promise to tax owners of vacant residential homes. The combination of the two taxes should help people find more housing opportunities and hopefully discourage wealthy foreign buyers from buying up houses and keeping them vacant while citizens are priced out of the market. This legislation goes hand in hand with the tax on vacant homes currently being planned by the City of Vancouver.