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Impact of Vancouver’s Foreign Buyer Tax Still Unknown
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(Posted on Mar 26, 2017 at 01:00PM by Michelle Bogle)
Last year, the provincial government implemented a 15 percent foreign buyer tax on residential home purchases (including multi-family properties) in Vancouver, B.C. Since then, the local housing market’s price growth and sales volume have relatively slowed, yet the levy’s actual impact on the residential and commercial segments remains unknown.
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In an interview with the Canadian Press, Dan Morrison, President of the Real Estate Board of Greater Vancouver (REBGV), said that while it’s probable that investors have redirected their funds from residential to commercial properties in response to the tax, no data currently exists to conclude one way or the other.Â
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“I would attribute it more to the economy than anything else,†added Morrison.
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On the other hand, NDP housing critic David Eby argued that this situation underscores the need for the provincial government to diligently collect transaction data across all property types.
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“As far as we know, the province isn’t collecting any data about these sales. We're one of the few provinces that doesn't collect this type of information and we really need to know what is driving these prices,†Eby stated. “There are a lot of small businesses facing huge property tax hikes because the perceived value of their property is higher. It's driving a lot of small businesses out of business.â€
These statements came after the REBGV released 2016 sales data, which revealed that the value of commercial real estate sales in the Lower Mainland grew by $12.990 billion last year – a 47.4 percent increase from the $8.815 billion total in 2015.Â
“It's really the confidence in the B.C. and Vancouver economy,†Morrison said in the same interview with the Canadian Press. “It's no surprise that we see the same thing happen with commercial properties as has been happening for residential properties.â€
These statements came after the REBGV released 2016 sales data, which revealed that the value of commercial real estate sales in the Lower Mainland grew by $12.990 billion last year – a 47.4 percent increase from the $8.815 billion total in 2015.Â
“It's really the confidence in the B.C. and Vancouver economy,†Morrison said in the same interview with the Canadian Press. “It's no surprise that we see the same thing happen with commercial properties as has been happening for residential properties.â€
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Foreign investment remains a hot topic not only in Vancouver, but nation-wide. For more information and insight, please contact our office to speak with one of our knowledgeable commercial real estate advisors.
