In recent months – and most recently over the weekend – we have frequently discussed the risks associated with housing bubbles springing up in certain parts of Canada and Australia on the back of hot investments by Chinese money laundering operations. We’re happy to report that the British Columbia government finally took our advice to stem hot money inflows into real estate by announcing a 15% transfer tax on foreign nationals who buy real estate in Metro Vancouver. Finance Minister Mike de Jong unveiled the tax, which will take effect on August 2nd, after recent housing data revealed that foreign nationals spent more than $1 billion on British Columbia property between June 10 and July 14, or a mere $28.6mm per day.
CTV has the details:
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…. “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. 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.
This post was published at Zero Hedge on Jul 25, 2016.
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