VANCOUVER: Canada plans to tax overseas investors buying homes in Vancouver, one of North America’s hottest property markets, as it seeks to tamp down price gains in an area that absorbed more than C$1 billion (US$760 million) of foreign money in just five weeks.
An additional property-transfer tax of 15 percent will apply to foreign nationals and overseas corporations buying residential property in the Metro Vancouver area starting on Tuesday next week, the province of British Columbia said on Monday in a statement.
That means an extra C$300,000 levy on a C$2 million home, it said.
Governments from the UK to Australia and Hong Kong have imposed levies and restrictions on foreign buyers in recent years in an effort to cool housing markets shooting beyond the reach of many local residents. Public pressure for a crackdown has been mounting in Vancouver, where the price of a typical detached home rose 38 percent last month from a year earlier to C$1.6 million.
“While investment from outside Canada is only one factor driving price increases, it represents an additional source of pressure,” British Columbia Finance Minister Michael de Jong said in the statement. “This additional tax on foreign purchases will help manage foreign demand while new homes are built to meet local needs.”
