Watch Phil Soper, CEO of Royal LePage discusses implications of the new 15% foreign tax that took effect yesterday in Vancouver. According to a very small sample and short term report based on MLS sales just last week shows that the market literally stood still for the past seven days. Although the market in Vancouver has already showed signs of leveling over the pay few months, news of the tax was clearly a catalyst to the temporary market paralysis.
I would certainly like to see based on what concrete data was this policy decided on. It seems that more than anything it was a desperate measure to “do something about the market” without in-depth research. It also seems very simple – %15 across the board for all foreigners. But if foreign investment is truly the cause of the surge in the Vancouver market, shouldn’t it also be examined what type of purchasers will be affected? What if the buyer’s purpose is not investment, but bona-fide immigration? Perhaps raising children here? Opening a business that helps our economy? What if the “investment” component comes from specific countries? Let’s say only 1% of purchases from a particular country are for investment purposes, but 50% of buyers from another country buy to “park money” or make money here.
Should all foreign buyers be taxed under the exact same hat?
Do we truly have factual data to make a big decision like this?
Also, I’m not so sure existing home owners want the market to cool off completely. Perhaps a reasonable “tap on the break” as Phil said would be prudent.
I honestly believe focusing on how to help first time home buyers is key. Cracking down of speculators would be another. How about examining assignment practices? I think we ought to start there. Most home owners are content with becoming wealthier by owning real estate long term. Just my two cents. Are you concerned as a home owner? Perhaps a first time home buyer?