Chinese agents miffed by B.C.’s new tax

Instead of moderating the overheated Vancouver market, the B.C. government’s implementation of a 15 per cent property transfer tax on foreign home buyers earlier this month has led to a chorus of condemnation from various observers and segments—most notably Chinese agents and buyers, who many quarters have alleged as the main drivers of housing price growth.
 
Licensed real estate agent Jack Li has helped multiple Chinese investors purchase around 40 condos over the past two years, but he has recently voiced dissatisfaction over the hastily applied tax.
 
“It’s a tragedy,” Li told The Globe and Mail.
 
“It’s going to have an impact on me, my family and my business, even though I made a lot of contributions to the B.C. economy. I put money there. I have brought people to B.C. And I told people Canada is a good place.”
 
Li, who has worked and lived in Canada for a year and a half prior to working as an agent in B.C., said that a significant proportion of buyers who might have been interested in getting a home in Vancouver would be scared off instead.
 
“If the government had said 5 per cent or even 8 per cent, that’s reasonable. But 15 per cent, that’s a lot. That’s a very heavy tax,” Li said.
 
“This is not about the real estate market,” overseas sales agent Xie Xingyu agreed. “From my point of view, it’s political. It’s for votes. It’s not for home prices.”
 
Liu Fei, the Chinese consul-general in Vancouver, echoed the thoughts of various analysts who have encouraged the Canadian government to focus on supply-side solutions instead of choking off demand.
 
“If government has no plan, any policy can be the start of a disaster,” she told Chinese media last week.
 
Even Canadian agents outside Vancouver have mirrored these fears, saying that high-demand properties—especially those in the luxury segment—would become increasingly out of reach of domestic buyers as a result.
 
“Where are those foreign investors going to go? They're not going to want to pay that 15 per cent, so they're going to now dump it into the Toronto real estate market, which is already hot,” Toronto-based real estate agent Derek Ladouceur said.

Related Stories:

B.C.’s tax on foreign buyers might inflame Toronto market instead
New tax on foreign buyers might induce price growth instead - analysis
Canadian professionals’ statements reflect Chinese fears over new tax

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COMMENTS

  • by Moe 2016-08-17 11:15:32 AM

    The biggest issue is that investors who trusted the liberal free enterprise system will think twice about bringing their money to our shores. You cannot make drastic tax increases and announce it few days before the new measures are implemented. What about buyers who made offers to buy and will close at a date beyond the new date for implementing the new tax increase.
    A lot of the deals would collapse because buyers did not predict a sudden huge increase in the price of the property they are buying.

    How can a foreigner trust Canada if they feel that Canada wants to punish them because they want to invest in a safe "heaven country". Canada is not the only choice in the free world. Bad and alarming precedent .

  • by 15is toolow 2016-08-17 11:17:10 AM

    Should be 20%

  • by MFenn 2016-08-17 11:19:56 AM

    This excellent but grim article is spot on accurate. It's 'political'. It's a 'tragedy'. It's a 'disaster'. Exactly.
    It seems to be driven by deliberately manipulated racial-specific ill-feeling, and it's a measure which will not relieve those whom the politicians claim to be wanting to help.
    It sounds like "Deutschen! Wehrt Euch!" all over again. How ironic in a province which prides itself as being so progressive!

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