The foreign home buyer tax is increasing to 20 percent.
In addition, the levy, which originally was applied only in Metro Vancouver, will be extended to other regions in B.C.
The 20 percent foreign home buyer tax will now also cover the Fraser Valley, Capital Regional District, Nanaimo Regional District, and Central Okanagan.
The changes were part of the first provincial budget rolled out by the B.C. NDP since losing power to the Liberals in 2001.
According to the plan presented by the B.C. NDP on housing affordability, the 15 percent foreign buyer tax that was implemented by the previous government was not enough to stabilize the housing market.
The plan notes that “foreign demand is still putting pressure on our housing stock”.
The document also states that the extension of the tax beyond Metro Vancouver “ensures that speculation isn’t pushed into neighbouring markets”.
On February 1 this year, the Union of B.C. Municipalities released a housing report, which suggested an increase in the foreign buyer tax and its application to areas outside Metro Vancouver.
According to the report, “estimates of foreign investment provided by federal and provincial data are likely quite conservative”.
On December 19 last year, Statistics Canada and the Canada Mortgage and Housing Corporation came up a report stating that non-residents, which include Canadians as well as non-Canadians, own 4.8 percent of homes in Metro Vancouver.
According to B.C. provincial government data, 4.2 percent of home transactions in Metro Vancouver in December 2017 involved foreign buyers.
In the 2018 budget announcement, the B.C. NDP also indicated that a speculation tax on residential property will be introduced in the fall.
The government will also increase the property transfer and school tax rates on homes worth over $3 million.