No, no, silly, it’s not astonishing that foreign buyers are into high-end real estate. It’s because the real-estate agent who markets it to them thinks they should be taxed more:
“The luxury market has been driven purely on the demand from investors and the appeal is the perfect storm of geographical appeal,” Jason Soprovich, a real estate agent with Royal LePage Sussex who specializes in the West Vancouver market. “Low interest rates, very low active listing rates and pent up demand.” …
Soprovich said levying some sort of extra property tax could deter some real estate activity, but he believes it’s important in the fact of intense interest from from foreign buyers.
Vancouver-based academics have proposed several ways taxes could be designed to target either expensive properties or property owners who do not make income in Canada.
“If this large number of people are influxing into the city are coming to city and using infrastructure, there needs to be some level of taxation,” Soprovich said.
Of course, what does he know. Fortunately, our Finance Minister thinks otherwise:
Earlier this week, B.C. Finance Minister Mike de Jong said he was “biased” in his belief that supply constraints, not foreign buyers, are the main factor behind Metro Vancouver’s extreme home price increases of the past 16 months; between April 2015 and April 2016 benchmark residential home prices across Greater Vancouver rose 30%. De Jong said his government is reluctant to impose any extra tax targeting expensive properties or home owners who don’t make their income in Canada without more information on how that would affect the real estate market.
And we won’t be getting that kind of information for at least half a year or more. From Vaughn Palmer:
“After six months, given the kind of volume that we’re seeing in and around Metro Vancouver and other parts of B.C., we’ll start to get a relatively reliable sense of what is going on in the market. So that takes us towards the end of the calendar year.”
But de Jong cautioned against assuming that once the data has been aggregated and analyzed, the government would necessarily proceed with a new tax or other disincentives against foreign buyers.