The Vancouver housing market is considered one of the least affordable ones in the world. It seems that the government at the helm of affairs in the province has acted to even the playing field for Canadians who are looking to buy a house for sale in the area. The one way the government has tried to act on it, is by levying a 15% additional tax on all property bought by foreigners, and companies and corporations not registered in Canada.
There are two ways to make the price ratio in a market fair. One is to either increase the supply or to limit the supply. According to premier Christy Clark, this is an attempt at the latter. A 15% tax on condos and homes for sale will limit the number of foreign buyers who are able to afford such a property and leave more property available for acquisition to the locals of the country.
Increasing Provincial Revenues
A report released two months ago highlighted how the revenue for the provincial government from property has increased by almost half a billion. This is a considerable jump from the last fiscal year and the increasing revenue is only likely to increase with this new tax kicking in this fiscal year.
According to statistics from the last fiscal year, foreign nationals were responsible for nearly spending $1 billion on property. At present while foreigners were able to afford housing in the area, locals who belonged to middle class families were not able to buy homes for sale in Vancouver.
Despite the cash windfall that the move is expected to bring the reaction to the new tax has been mixed. Some people have hailed it as a wise move to make the housing market more accessible to Canadian buyers; whereas, some have criticized it for being a discriminatory tax being leveled against people based on their nationality.