Property 101: Canada introduces foreigners' transaction tax

Property 101: Canada introduces foreigners' transaction tax
Property 101: Canada introduces foreigners' transaction tax

Foreign buyers of property in Vancouver now have to pay a 15 percent transaction tax.

British Columbia legislators passed the new law which means new tax means non-Canadian residents buying a $2 million home will have to pay an additional $300,000 in tax.

"While investment from outside Canada is only one factor driving price increases, it represents an additional source of pressure," British Columbia Finance Minister Michael de Jong said in a statement.

"This additional tax on foreign purchases will help manage foreign demand while new homes are built to meet local needs.

Meanwhile the City of Vancouver has identified the need for a vacancy tax in order to meet rental supply issues.

The new foreign buyer tax could face a court challenge as it may be in violation of the Canada-China Bilateral Investment Treaty.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Property market Taxation

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