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New tax program announced with intent to curb foreign investment in the residential market. credit: Province of BC (flickrCC)
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“Current popular perception is that much of the increase in property prices, and the corresponding lack of affordable housing, is tied to foreign investment in residential housing,” writes columnist John McLachlan, a real estate lawyer, linking this perception to recently announced provincial and Vancouver municipal government tax programs.
Both governments have introduced new taxes to discourage foreign investment in residential property: the provincial government has imposed an additional property transfer tax of 15% on foreign nationals when buying residential real estate in Metro Vancouver, and the City of Vancouver plans to impose additional property taxes on vacant homes.
“The stated intention of these taxes is to temper or even reverse the current price of housing in Metro Vancouver and to encourage an increase in the supply of long-term rental housing. The governments assert that the taxes reflect market data and analysis. A second look, however, suggests that both of these taxes are geared more to politics than results, to optics than well-thought-out planning. In essence, the taxes do not address the underlining issues of housing affordability and rental vacancy in the region,” writes McLachlan.
Read more analysis in McLachlan’s “Ask a Lawyer” column in the Summer 2016 issue of Input, page 17.
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