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.

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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

On Monday, Sept. 21, 2020, the Township approved a rainbow crosswalk between the school district and RCMP buildings in Murrayville, but did not earmark funds for the project. (Langley Advance Times file)
Out On Patrol police group backs rainbow crosswalk in Langley

Urges supporters to donate to cover cost of $12,000 crossing near main RCMP detachment

Chris Wejr, principal of Aldergrove’s Shortreed Elementary, made U.S. senator Bernie Sanders a playground monitor (Twitter image)
Another Bernie Sanders meme, this time in Langley

Principal adds image of mitten-wearing U.S. senator to playground photo

Langley City hall (City of Langley image)
Langley City financial plan scales back SkyTrain preparations

If approved, the average homeowner taxes would go up by $154

Giants defenceman Bowen Byram has recorded his first NHL career point (Rob Wilton/special to Langley Advance Times)
VIDEO: Vancouver Giants Bowen Byram records first NHL career point with Colorado Avalanche

Player with Langley-based WHL franchise assisted on goal against the Ducks

Surrey Fire Service responded to a fire in the industrial area of 192nd street and 54th Avenue early Saturday morning (Jan. 23, 2021). (Photo: Shane MacKichan)
Surrey crews respond to fire in industrial area

Fire happened early Saturday morning

U.S. Senator Bernie Sanders sits in on a COVID-19 briefing with Dr. Bonnie Henry, provincial health officer, and Adrian Dix, B.C. minister of health. (Birinder Narang/Twitter)
PHOTOS: Bernie Sanders visits B.C. landmarks through the magic of photo editing

Residents jump on viral trend of photoshopping U.S. senator into images

sd
VIDEO: Mission drag racer scores 1st career win, sets world record, makes history in 2020

Justin Bond, founder and owner of JBS Equipment Mission, has break-out year

A 75-year-old aircraft has been languishing in a parking lot on the campus of the University of the Fraser Valley, but will soon be moved to the B.C. Aviation Museum. (Paul Henderson/ Chilliwack Progress)
Vintage military aircraft moving from Chilliwack to new home at B.C. Aviation Museum

The challenging move to Vancouver Island will be documented by Discovery Channel film crews

A video posted to social media by Chilliwack resident Rob Iezzi shows a teenager getting kicked in the face after being approached by three suspects on Friday, Jan. 22, 2021. (YouTube/Rob i)
VIDEO: Security cameras capture ‘just one more assault’ near B.C. high school

Third high-school related assault captured by Chilliwack resident’s cameras since beginning of 2021

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

FILE - In this Feb. 14, 2017, file photo, Oklahoma State Rep. Justin Humphrey prepares to speak at the State Capitol in Oklahoma City. A mythical, ape-like creature that has captured the imagination of adventurers for decades has now become the target of Rep. Justin Humphrey. Humphrey, a Republican House member has introduced a bill that would create a Bigfoot hunting season, He says issuing a state hunting license and tag could help boost tourism. (Steve Gooch/The Oklahoman via AP, File)
Oklahoma lawmaker proposes ‘Bigfoot’ hunting season

A Republican House member has introduced a bill that would create a Bigfoot hunting season

Economic Development and Official Languages Minister Melanie Joly responds to a question in the House of Commons Monday November 23, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Federal minister touts need for new B.C. economic development agency

Last December’s federal economic update promised a stimulus package of about $100 billion this year

FILE - In this Nov. 20, 2017, file photo, Larry King attends the 45th International Emmy Awards at the New York Hilton, in New York. Former CNN talk show host King has been hospitalized with COVID-19 for more than a week, the news channel reported Saturday, Jan. 2, 2021. CNN reported the 87-year-old King contracted the coronavirus and was undergoing treatment at Cedars-Sinai Medical Center in Los Angeles. (Photo by Andy Kropa/Invision/AP, File)
Larry King, broadcasting giant for half-century, dies at 87

King conducted an estimated 50,000 on-air interviews

Kimberly Proctor, 18, was murdered in 2010. Her family has spent many of the years since pushing for a law in her honour, that they say would help to prevent similar tragedies. (Courtesy of Jo-Anne Landolt)
Proposed law honouring murdered B.C. teen at a standstill, lacks government support

Ministry of Mental Health and Addictions has concerns with involuntary detainment portion of act

Most Read