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Vancouver Rental Apartment Buildings Included in 15% Foreign Tax
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(Posted on Aug 4, 2016 at 07:37PM by Michelle Bogle)
The B.C. Finance Ministry has confirmed that multi-family rental buildings within Metro Vancouver will be subject to the new 15% foreign buyer tax on residential purchases, even though this type of transaction is designated as a commercial real estate asset by the Real Estate Board of Greater Vancouver.Â
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The tax, which came into effect on August 2, 2016, is specifically aimed at foreign investment in Vancouver’s inflated residential real estate market, which, as we all know, has been surging to sky-high levels as of late. In fact, according to Finance Minster Mike de Jong, non-Canadians have spent more than $250 million a week on B.C. residential real estate from June 20 to July 14, with 86% of it concentrated in the Lower Mainland.
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Sales volume on multi-family rental buildings in Metro Vancouver is also on the rise. It recently increased by a staggering 142% to $1.1 billion in the first six months of this year, compared to the same period in 2015. Even older style apartment buildings are selling for over asking and in competition with per-unit prices hovering at the $750,000 mark.Â
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However, according to regional commercial real estate advisors, many of the buyers for these types of assets continue to be local investors or permanent residents. It does not appear that the 15% foreign buyer tax will dampen this already red-hot market.
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Want to learn more? At Marcus & Millichap Vancouver, our team of advisors have a watchful eye on the foreign investment activity in our market. For more information or insight, please contact our office to speak with a broker.
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