Big Problems with the Foreign Buyers Tax

15 August 2016

A few weeks ago, we talked about the 15% sales tax on non-residents buying property in B.C.  We said it would not have much of an impact on the property market but it was a great P.R. move. However, just the opposite is happening. Bad P.R. And real estate deals falling through.

The B.C. Government announced this policy change on July 25th, effective August 2nd. This was probably not the smartest move. They made the changes effective closings when it should have been effective on the offer date. What is happening now is that you have residents, those are B.C. Voters who sold their house in July, closing in August to a non-resident and the deal will fall through because the deposit is less than the 15% tax. In this situation, it is just cheaper to walk away from the deal. Not only that, you have landed immigrants working in B.C. and paying taxes, who bought prior to July but are closing after August 2nd. They too are walking from their property because they can't close.

These are all big problems that could have been solved if the real estate industry had just been consulted first. Obviously the Government has little respect for us.