The new 15-percent tax on property transactions involving foreign nationals virtually stopped sales to foreign buyers across Metro Vancouver, the latest round of provincial government data on B.C. real-estate sales appears to show.
Before the tax took effect on August 2, foreign nationals accounted for 13.2 percent of sales across Metro Vancouver during the period June 10 to August 1.
Then, from August 2 to August 31, 0.9 percent of Metro Vancouver home sales went to foreign buyers.
Predictably, it was the cities where the percentages of sales to foreigners were highest that saw the tax’s most significant effects.
In the City of Vancouver, the percentage of home sales to foreign nationals was 15.5 before August 2 and 0.9 after.
In Richmond, sales to foreign nations dropped from 24.7 percent before the tax was implemented to 1.9 percent after.
For Burnaby, those sales declined from 24.2 percent to 1 percent.
In Surrey, they dropped from 9.6 percent to 0.6 percent.
Across all of British Columbia but excluding Metro Vancouver, foreign buyers accounted for 3.6 percent of sales before the tax was introduced and 1.7 percent of sales after.
Looking at those numbers, it would appear the tax is doing its job.
But questions remain about how long the decline in foreign-sales activity will last.
If foreign buyers were scared away from the Metro Vancouver real-estate market purely by the financial burden that the tax could place on them, they could be gone for good.
However, if their concern was the degree of uncertainty triggered by the tax—the fact that it was introduced without warning and applied retroactively, against sales for which contracts were already signed even long before it took effect—then there’s a decent chance sales to foreign buyers could bounce back before too long.
Another way of presenting the data is to note that it continues to fluctuate wildly.
The provincial government has released numbers irregularly to establish four reporting periods. Here they are with corresponding numbers for the percentage of Metro Vancouver sales that went to foreign nations.
- June 10 – June 29 : 5.1 percent (260 of 5,118 sales)
- June 30 – July 14 : 14.9 percent (675 of 4,518 sales)
- July 15 – August 1 : 19.5 percent (1,039 of 5,342 sales)
- August 2 – August 31 : 0.9 percent (60 of 6,964 sales)
The government announced the tax on sales to foreign buyers on July 25.
A September 22 media release emphasizes that the B.C. Ministry of Finance is continuing to collect data on home sales across the province.
“While it will take more time to conclude what effect the additional property transfer tax on foreign buyers has had on the real estate market, the collection of real estate transaction data is allowing the Province to monitor any changes in the market,” it reads. “This will help government assess the impact of the additional property transfer tax on Metro Vancouver’s real estate market, as well as other parts of the province.”