Foreign home buyers tax not expected to influence Nanaimo area: realtor

By Ian Holmes
February 22, 2018 - 4:46pm Updated: February 23, 2018 - 11:11am

A foreign home buyers tax is now in effect in the greater Nanaimo area.Canadian Press

NANAIMO — A local realtor doesn't believe a clampdown on foreign home owners in B.C. will have much of an impact on the mid-island.

The NDP government unveiled an increase to the foreign buyers tax to 20 per cent in Tuesday's budget and also announced it is being applied to more regions across the province, including between Cedar and Bowser.

Kaye Broens, president-elect of the Vancouver Island Real Estate Board and a Nanaimo realtor said statistics from Data BC showed very few people buying homes in the region are from outside Canada.

“In the Regional District of Nanaimo the percentage of foreign buyers in 2017 was 4.4 percent,” Broens said. “It's not a huge number and not very much of our sales.”

The previous Liberal government introduced a 15 per cent tax on foreign home buyers in Metro Vancouver in 2016 to cool the real estate market, however the measure was deemed insufficient by NDP finance minister Carole James.

On top of the foreign buyers levy, a speculation tax was announced by the government in its inaugural budget and is slated to be introduced this fall. The annual property tax will target foreign and domestic homeowners who do not pay income tax in B.C., including those who leave homes empty.

Again, Broens said investment purchases and recreational homes also account for a small number of purchases on the mid-island.  

“It's not a huge number, people buy here to move here,” Broens said.

In an email to NaniamoNewsNOW from the finance ministry stated a key rationale behind expanding the foreign buyers tax is to prevent speculators from shifting from one urban centre to another. The statement noted prior to the foreign buyers tax 13 per cent of all residential transactions on the Lower Mainland involved foreign nationals, compared to 4.2 per cent in December, 2017 after the tax was applied.

An expert at UBC's Sauder School of Business said the province's planned speculation tax will help make the lower end of the housing market more affordable.

Tom Davidoff said B.C. has high income and sales taxes but low property taxes, which encourages vacationers to buy property and makes life more expensive for workers.

— With files from The Canadian Press
 

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