VANCOUVER -- Foreign nationals who buy real estate in Metro Vancouver would pay an additional property transfer tax of 15 per cent under legislation introduced Monday by the British Columbia government.
Finance Minister Mike de Jong unveiled the tax as part of legislation aimed at addressing low vacancy rates and high real estate prices in southern B.C.
"For example, the additional tax on the purchase of a home selling for $2 million to a foreign national will amount to an additional $300,000," de Jong told members of the legislature.
The additional tax will take effect Aug. 2 and apply to foreign buyers registering the purchase of residential homes in Metro Vancouver, excluding treaty lands in the Tsawwassen First Nation.
All B.C. residents currently pay a one per cent tax on the first $200,000 of their purchase, two per cent on the remaining value up to $2 million and three per cent on the portion above that.
"The amendments include anti-avoidance rules designed to capture transactions that are structured specifically to avoid the additional tax," de Jong said.
The money from the additional tax would be used to fund housing, rental and support programs, the minister said.
De Jong said recent government housing data indicate foreign nationals spent more than $1 billion on B.C. property between June 10 and July 14, with 86 per cent on purchases in the Lower Mainland area.
After the bill was introduced, Premier Christy Clark said her government is focused on increasing the housing supply, protecting buyers and sellers and boosting the rental market.
"Today we are taking measures to ensure home ownership remains within reach of the middle class," she said.
The legislation would also enable the City of Vancouver to amend its community charter in order to levy a vacancy tax.
In May, de Jong said he wasn't in favour of a tax on foreign investment, saying he worried it would send the wrong message to Asia-Pacific investors.