British Columbia's government has taken a lot of heat over the last few years—especially in the last six months—for ignoring Metro Vancouver's out-of-control housing crisis. Prices shot up a ridiculous 30 percent in 2015, and as far as anyone can tell, no one in the city got a 30 percent raise to match.
After spending years refusing to implement any new taxes on homebuyers, including flipping and speculation taxes proposed by Vancouver's mayor, the province announced today it would start charging a surprising 15 percent tax on foreign investors.
BC Finance Minister Mike de Jong told reporters the tax amounts to a $300,000 take on a $2-million home. According to a small slice of data collected by the government last month, foreign investors make up 5.1 percent of the Metro Vancouver housing market, which amounted to over $1 billion in property purchased between June 10 and 14.
For people who have been watching the issue closely, there's a subtle difference between "foreign money" and "foreign buyers." NDP Opposition Leader John Horgan told VICE the legislation's focus on "foreign nationals and foreign-controlled corporations" will let people with fancy lawyers and accountants slide their money right by it.
"We've said for months and months that we need a speculation tax to focus on the money, not on the individuals," Horgan told VICE. "We don't want it to be a race-based debate, we want it to be based on how we stop this money that's distorting the market."
Observers like Ian Young of the South China Morning Post have maintained the luxury home market in Vancouver has been heating up in large part because of wealthy migrants to Canada, not overseas buyers. Those citizens and permanent residents obviously won't be affected by this new tax.
De Jong admitted foreign investment is "only one factor" driving up prices. "It represents an additional source of pressure on a market struggling to build enough new homes to keep up," he said in a statement.
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