Has Vancouver found the solution to a super-heated housing market?
There is a city which is suffering a worse property bubble than Sydney, whose residents are more priced-out than Londoners, and where there is a greater divide between the housing haves and have-nots than even San Francisco.
That city is Vancouver, and in response to these mounting challenges, the west-coast Canadian metropolis recently imposed an extraordinary new tax on foreign buyers – whose impact is now being watched closely by other cities grappling with bloated property markets.
On 2 August, Vancouver introduced a tax on anyone from outside Canada wanting to buy a home in its super-heated market. In future, city authorities said, if you weren’t Canadian, you would have to pay an extra 15% on the purchase price.
The impact has, by some measures, been more startling than campaigners could have hoped for. The price of the average detached home reportedly slumped by an astonishing 16.7% in August alone to C$1.47m (£856,000), according to the Real Estate Board of Greater Vancouver. Some agents are reporting that the market has gone from red hot to stone cold in a matter of weeks….
Vancouver’s experiment is being closely watched in London. According to London Assembly member Sian Berry, who stood as the Green party’s candidate for mayor: “Vancouver shows that the very rich buying up luxury flats at the expense of ordinary people is not just a London problem – it’s a growing problem all over the world.
|Switzerland||Restriction||The Lex Koller restricts where and what size property non-residents can buy: non-residents are confined to buying in key holiday zones, predominately in ski resorts and areas surrounding both Montreux and Lugano; the maximum size is 200 sq m of living space, not including balconies or basement areas. The Lex Weber sets a 20% cap on number of second homes per Swiss commune: the law applies to residents and non-residents alike and if the area of the property falls under the jurisdiction of a commune that has already exceeded this limit it is impossible to sell unless the property is already owned as a secondary residence|
|China||Restriction||Qualifying foreign individuals and companies are allowed to buy as many properties as they wish on the Chinese mainland, but they are subject to local housing purchase limits. In Shanghai, for example, people without a Shanghai household registration are only allowed to buy one property|
|New Zealand||Restriction||A tax on second home properties bought and sold within two years has been introduced. Foreign buyers also have to apply for a government ID number for tax purposes. Some NZ Banks are refusing to provide mortgages for non-residents|
|Fuji||Restriction||Land sales in towns restricted to domestic buyers only. Foreigners who currently own houses in Fiji cannot sell it to other non-residents. Foreigners who already own land but have not built a house must do so within two years or face a fine of 10% of the property’s value every six months|
|US||Restriction||The identities of buyers for all-cash purchases are now required in Manhattan, Miami-Dade County, California and Texas|
|Canada||Restriction||In Vancouver, foreign buyers must pay a new 3% property transfer tax rate applied to the portion of a home sale that exceeds C$2m. Additionally, there is a new 15% property tax for foreign buyers purchasing within the Metro Vancouver area|
|Indonesia||Restriction||Foreign nationals who are resident can buy a landed house or apartment in Indonesia, though various requirements must be met, including a minimum price|
|India||Restriction||A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India|
|Vietnam||Restriction||Foreigners are not allowed to own land|
|Hong Kong||Restriction||Foreigners can buy property but must pay a 15% additional buyer’s stamp duty|
|Singapore||Restriction||Foreigners must pay a 15% additional buyer’s stamp duty|
|Australia||Restriction||Foreigners can buy new dwellings but cannot buy established dwellings as investment properties or as homes. Victoria, Queensland and New South Wales charge foreign buyers extra stamp duty. Some states also charge extra land tax|
|Spain||Incentive||The Spanish government is preparing a new law which will allow non-EU residents who purchase homes priced above €500,000 to qualify for Spanish residency|
|Portugal||Incentive||Portugal allows non-EU investors to gain residency. To qualify new arrivals need to either transfer €1m+ in capital to Portugal, set up a business that creates a minimum of 30 jobs or purchase a property of €500,000+|
|Greece||Incentive||Foreign nationals from non-EU countries who have bought property worth more than €250,000 are able to obtain five-year renewable residence permits for themselves and their families|
|Turkey||Incentive||Turkey allows 183 nationalities to purchase real estate without restrictions. Other incentives include automatic one year residency permits for foreign property owners and the right of Turkish citizenship after five years|
|Cyprus||Incentive||Non-EU nationals who purchase a property above €300,000 have the right to residency|