British Columbia's Premier, Christy Clark announced in January that foreigners with work permits who live and work in B.C. will be exempted from the province’s 15% homebuyers tax.
What the specific changes will look like and who will be impacted remains to be seen. The finance ministry says in a statement that details of the regulations are still being worked out, including when the new policy will come into effect and whether it will retroactively cover people with work permits who have already paid taxes.
Clark is hoping that the new lift in the foreign buyers tax will help attract more people to B.C. “We believe that people who are seeking refuge around the world should be able to find safe haven here in our province,” Clark said. “We believe that people, the best and the brightest, should be able to come to British Columbia.
“We are going to lift the foreign owners tax on people who have work permits who are paying taxes and living in British Columbia, as a way to encourage more people to come.”
Clark referred to legislation in place that allows the government to exempt groups of people from the tax. She did not elaborate on when the exemption will take effect.
The premier’s office said full details will be released soon, and that the premier has asked Finance Minister Mike de Jong to look at ways the government can provide relief from the tax for those who are coming to B.C. on work permits.
The foreign tax has been in place since August, and was meant to cool demand in an overheated real estate market in Metro Vancouver in the face of growing concerns over affordability.
The tax appears to have its intended effect on the market, with data showing a significant drop in real estate transactions involving foreign buyers. In November, there were 204 transactions involving foreigners in Metro Vancouver compared to the 1,974 transactions that took place seven weeks before the tax came into effect.
Housing critic David Eby said the NDP had proposed a similar exemption seven months ago when the tax first came into effect but the B.C. Liberals voted against the motion.
“We knew it would be a problem,” he said. “These are people who are paying taxes and contributing to the economy.”
Eby said he believes the exemption is due to the premier hearing from employers, many in the tech and advanced education sectors, about the impact of the tax on their ability to recruit workers to live and work in the province.
“There’s a fight for highly skilled employees nationally and we made it more difficult by imposing a 15-per-cent tax in the name of punishing speculators,” said Eby, adding the province should reimburse foreign buyers with work permits who have already paid the tax.
Greater Vancouver Real Estate Board president Dan Morrison welcomed news of the exemption, saying foreign buyers with work permits who live and contribute to the economy shouldn’t have had to pay the additional tax in the first place.
Consistency in policy is an important part of getting the markets to work efficiently, said Morrison. “It’s hard for the buyers if the rules are constantly changing, but if it’s correcting a mistake, it’s a good thing.”