British Columbia’s government is doubling down on its bid to lower Vancouver housing prices by curbing foreign demand, which could drive wealthy Chinese home buyers to other markets.
As of Wednesday, the special tax foreigners pay when they buy a home in the province’s largest city will increase from 15 to 20 percent, Bloomberg reported. The provincial government is also expanding the tax to other cities, such as Victoria, and adding a 2 percent tax for investors who don’t pay local income tax.
“B.C.’s real estate market should not be used as a stock market. It should be used to provide safe and secure homes,” finance minister Carole James told Bloomberg. “That’s why we’re cracking down on speculators who distort our market.”
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Chinese buyers comprise a significant portion of Vancouver’s buyer pool.
Vancouver is grappling with the same influx of foreign investors that has helped push up housing prices in cities like New York and Miami. But while the Big Apple is trying to tackle the problem by increasing housing supply through rezoning and tax incentives, Vancouver is doing the opposite: going after demand.