Will a new tax on foreign buyers, announced Monday by the B.C. government, have any effect on the housing crisis brewing in Canada?
New legislation will take effect August 2, and will add a 15% property transfer tax for foreign nationals buying real estate in the west coast province.
Foreign buyers have come under heavy criticism over the last year or so, being singled out as the main cause behind sky-high real estate prices in southern B.C. and Toronto (and the surrounding are).
The tax would add $300,000 to the purchase price on a home selling for $2-million to a foreign national.
Many foreign buyers involved in the Vancouver market hail from mainland China.
A recent column here in The Globe & Mail points out that if house prices in Vancouver increased at annual rate of 17%, from 2016 onward, a single-family home in the city would be worth around the $80-million mark.
Good luck getting approved for that 150-year mortgage.