A new crackdown on overseas investors in British Columbia’s residential real estate could easily end up driving that money to other parts of the country, according to reports out Tuesday.
Foreign buyers will pay an extra 15% in property tax fees on residential real estate in Vancouver, a move to cool the country’s hottest market that Ontario might be smart to follow, says BMO economist. Continue reading.
Citing concerns over affordability, B.C. slapped an additional 15 per cent property tax transfer fee on all foreign investors, and entities representing them, for purchases in Metro Vancouver effective Aug. 2.
“With any tax change, there may be some unintended consequences. For one, the move may shift foreign attention to other markets in B.C., such as Victoria, or elsewhere in Canada,” said Michael Dolega, a senior economist with Toronto-Dominion Bank, in a note released Tuesday. “Even prior to the new policy announcement, we believed that foreign investors had already begun to gravitate to the more affordable Toronto market. As such, prices in Toronto could see some significant upside pressure in the coming months as foreigners look to new markets.”