Finance Minister Mike de Jong outlines new data on residential real estate buying by foreign citizens.

Finance Minister Mike de Jong outlines new data on residential real estate buying by foreign citizens.

Foreign buying in Metro Vancouver now pegged at 10 per cent

New data released a day after province's announcement of 15 per cent tax on real estate purchases by foreign citizens in region

Foreigners bought 9.7 per cent of homes recently sold in Metro Vancouver, according to the latest real estate transaction data released by the B.C. government.

That’s significantly higher than the earlier tally of 5.1 per cent issued by the province a few weeks ago on the earliest data.

The new numbers are based on nearly five weeks of transactions from June 10 to July 14 and represent a total of $885 million worth of residential real estate that was bought by foreign nationals during that period.

The release by Finance Minister Mike de Jong came a day after the province announced it would impose a 15 per cent  transfer tax on residential real estate purchases by foreign nationals in Metro Vancouver.

De Jong expects the tax will reduce the pace of foreign investment now happening in Metro, and acknowledged it could result in foreign buyers purchasing more property in other B.C. regions.

RELATED: B.C. imposes foreign buyer tax on Metro real estate Pundits split on whether foreign buyer tax will cool market

If the current pace of buying by foreigners in Metro continued, it would translate into $9.2 billion a year worth of transactions subject to the new tax, and nearly $1.4 billion in additional property transfer tax for the province.

The impact of the tax is yet to be seen, de Jong said, adding he expects it to generate “some” rather than “a lot” of extra revenue, which could support affordable housing and rental assistance initiatives.

De Jong defended the government’s choice of a higher property transfer tax at the time of sale rather than alternate proposals of an elevated annual property tax from which Canadian citizens or working residents could be exempted.

“If the argument is that a two per cent increase in property tax levied a year from now is more effective than a 15 per cent increase in tax that will take effect next week to reduce international participation in the residential real estate market, I just don’t buy that,” de Jong said.

“it’s far more reliable than anything else we have.”

The new tax doesn’t apply to non-citizens who have permanent residency status.

The province has been criticized for leaving the door open to deals paid for by foreigners but run through their relatives already in Canada. The tax will cover foreign citizens here on student or work visas.

De Jong also downplayed the impact of Quebec’s immigrant investor program, which extracts revenue for that province from arriving Chinese investors who critics say often ultimately settle in Vancouver. Because they gain permanent residency status, their property deals wouldn’t be taxed.

He noted there’s no way to preclude those arrivals from moving where they want in Canada.

“I think this is beginning to take on a little bit of a conspiratorial theory that vast loads of people are arriving in Montreal with a Vancouver baggage ticket,” de Jong said.

He said that while some of that happens, the bulk of foreign investment in B.C. is from other sources.

The new tax will apply on transactions where the property transfer has not yet been registered as of Aug. 2, despite objections from realtors that it may disrupt deals that have not yet closed.

The province will ask Canadian citizens or permanent residents to verify their status by providing social insurance numbers, which foreign nationals wouldn’t be able to supply. Audits are also promised, along with penalties for those who try to dodge the tax.

But de Jong said he opposes targeting new real estate taxes to those who own expensive homes but have suspiciously low incomes and pay little to no tax.

“There are a lot of seniors who are cash-poor but bought their homes 40 years ago.”

NDP housing critic David Eby said foreigners who become permanent residents through the Quebec program are a “huge” concern.

He said they often buy Lower Mainland property but pay very little in tax because they’re paying taxes elsewhere in the world.

“I don’t think we should be selling citizenship,” Eby said. “I think it’s inherently offensive to people who waited in a queue who worked hard to become Canadian citizens.”

He reiterated his position that extra taxes are justified on people who don’t pay tax here and merely use B.C. real estate as an investment asset for foreign-sourced money.

“If you don’t get at that international money, you’re not solving the problem,” he said.

Eby also said the new foreign transfer tax may accelerate speculative flipping of pre-sale condo contracts, which won’t be charged the tax until they’re built and registered by a final buyer.

“I don’t know why they wouldn’t deal with it except perhaps that the king of pre-sale condos is in fact the premier’s chief fundraiser, Bob Rennie.”

He said the new data proves foreign buying is “a much bigger problem than they ever acknowledged.”

The province will monitor the transaction data to see if foreign activity jumps in other regions of B.C. as a result of the new tax.

About 3.5 per cent of transactions in the Capital Regional District and elsewhere in B.C. involve foreign nationals. The value of those foreign purchases were $30 million in the CRD within that five-week window, and about $139 million in all B.C. regions outside of Metro.

Within Metro, the proportion of foreign purchases was 18.2 per cent in Richmond, 17.7 per cent in Burnaby, 10.9 per cent in Vancouver and 8.4 per cent in Surrey.

Foreign real estateCreate column charts

Just Posted

Black Press file photo
RCMP seek suspect in Vancouver Island-wide crime spree

Crimes stretched from Deep Bay to Qualicum, Ladysmith, Chemainus and Youbou

Jesse Roper tackles weeds in his garden to kick off the 2021 season of What’s In My Garden Man? (YouTube/Whats In My Garden)
VIDEO: Metchosin singer-songwriter Jesse Roper invites gardeners into his plot

What’s In My Garden, Man? kicks off with the poop on compost

A sketch of the multi-use path that will connect Lagoon Beach and Royal Beach in Colwood. (Sketch courtesy of the City of Colwood)
Concepts for Colwood beach connector coming to council June 21

Major infrastructure project includes gathering places, public amenities and pathways

The District of Sooke is looking to revamp its business licence bylaw. Council agreed recently that all businesses must hold a business licence to operate in the community. (Kevin Laird – Sooke News Mirror)
Sooke pushes ahead with new business licence bylaw

Proposal calls for all forms of business to require licensing, but bylaw can stil be tweaked

Victoria police are asking for witnesses who might have information about this tricycle that was stolen in downtown Victoria on Thursday. (Photo courtesy of VicPD)
Police seek witnesses after downtown Victoria company’s tricycle stolen

The three-wheeler was taken from the 2100-block of Store Street on Thursday

A small pod of Pacific white-sided dolphins pass by close to shore in Campbell River June 16, 2021. Still capture from video courtesy of Kimberly Hart
VIDEO: Dolphin sunset captured from Vancouver Island shore

Spectacular setting for view of travelling pod of Pacific white-sided dolphins

OPINION SIG
SOOKE HISTORY: A brief history of Bear Creek Camp

Malahat Logging Company began both Beach Camp and Bear Creek Camp

Police are asking for public assistance in locating Anthony Graham who has been charged with the murders of Kamloops brothers Carlo and Erick Fryer. (RCMP photo)
2 charged, suspect at large in killings of B.C. brothers linked to gang activity: RCMP

Kamloops brothers Erick and Carlo Fryer were found deceased in May on a remote Okanagan road

Albert Health Minister Tyler Shandro and Alberta Premier Jason Kenney unveil an opening sign after speaking about the Open for Summer Plan and next steps in the COVID-19 vaccine rollout, in Edmonton, Friday, June 18, 2021. THE CANADIAN PRESS/Jason Franson
Alberta 1st province in Canada to lift all COVID-19 public health restrictions

70.2% of eligible citizens 12 and older in the province have received a dose of the vaccine

Fraser Health registered nurse Ramn Manan draws a dose of the Pfizer COVID-19 vaccine into a syringe at a walk-up vaccination clinic at Bear Creek Park, in Surrey, B.C., on Monday, May 17, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Honour our fathers’ with COVID-19 vaccine protection, B.C. urges

109 new cases Friday, 75 per cent of 12 and up immunized

Freighters have becomd abundant in the Trincomali Channel on the east side of Thetis Island.
Nanaimo ponders taking on waste from nearby anchored freighters

Vancouver-based Tymac petitioning the Regional District of Nanaimo to accept waste at its landfill

(Paul Henderson/ Chilliwack Progress)
Trutch Avenue in Chilliwack to be renamed to remove racist taint

New name to have Indigenous significance as Chilliwack takes new step toward reconciliation

Canadian Prime Minister Justin Trudeau is seen during a joint news conference following the EU-Canada Summit, in Brussels, Belgium, Tuesday June 15, 2021. Trudeau says Canada is on track now to have 68 million doses delivered by the end of July, which is more than enough to fully vaccinate all 33.2 million Canadians over the age of 12. THE CANADIAN PRESS/Adrian Wyld
Vaccine deliveries enough to fully vaccinate all eligible Canadians by end of July

Three in four eligible Canadians now have their first dose, nearly one in five fully vaccinated.

Most Read