“Government has had a long time to take action on the affordability issue, yet they decide to bring this new tax in over a long weekend, with no notice, and no time to prepare. It would have been prudent to seek consultation from the people most knowledgeable about the impact,” commented Dan Morrison, president of the Real Estate Board of Greater Vancouver.
The new tax will be implemented on August 2 and Morrison says that the hasty action adds uncertainty to the market and is calling on lawmakers to make an exemption for transactions that are in the process of closing.
The Urban Development Institute has also reacted to the government’s announcement and is skeptical about its effect. In a statement it said:
“The Urban Development Institute believes that taxes alone will not solve our affordability problems. With three new taxes proposed it is now time to focus on creating more housing supply. A portion of the PTT tax revenues will be deposited in a new Housing Priority Initiatives Fund. If allocated wisely, these revenues could provide a real opportunity to increase the supply of both market and rental housing.”
However, there has been some positive feedback following our reporting of the new tax Monday.
Kris Kooblall told Canadian Real Estate Magazine: “This is simply an excellent move by the B.C provincial government in the right direction.”
Bernadette Mroz commented at Mortgage Broker News: “Everywhere in the developed world foreign investors are required to pay additional tax when purchasing real estate. It is finally time for Canada to do the same.”
Meanwhile, Ron Butler is more cautious: “It will be very interesting to see how this plays out. If it is too much of a brake: the market tanks. Do nothing and based on the current price acceleration extrapolated out over the next 3 years.”
The changes announced Monday will also enable the City of Vancouver to introduce a tax on vacant properties.
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The decision by the government of British Columbia to introduce a 15 per cent tax on real estate purchases by foreign buyers has not impressed one of the region’s realtors’ groups.