Tell our local politicians: get the foreign buyers tax extended to Greater Victoria

Mayors, Councillors and Directors across the Capital Regional District have been debating whether to ask the province to extend B.C.'s 15% foreign buyers tax to Greater Victoria. 

We believe the answer needs to be YES. There are many factors at play, but with non-resident buyers accounting for 4-13% of the total value of real estate transactions in the CRD, there’s no question global capital is distorting local markets. [1] 

Often, non-resident buyers will make cash offers, sight-unseen with no conditions, tens or hundreds of thousands over asking price. Many local buyers don't stand a chance, or have taken on enormous risk and debt in order to compete. Meanwhile, many renters face additional insecurity as more units are speculatively bought and sold. 

And it could get even worse. Ontario announced in April that it'll follow B.C.'s lead and implement a 15% non-resident speculators tax for Greater Toronto. This means Greater Victoria, often cited along with Greater Vancouver and Greater Toronto as among the priciest markets in Canada, now risks being the only one of those three without a financial disincentive to park global capital in local housing.

 [1] On a month-to-month basis, as measured by the B.C. government starting in June 2016.



Sign the petition

“Dear Capital Regional District Mayors, Councillors and Directors,

It’s time to extend the 15% non-resident speculation tax (a.k.a. foreign buyers tax) to Victoria and the CRD. Please place yourself on record requesting that the Government of B.C. act without delay to bring the tax here, and to utilize the revenue to invest in affordable housing.”

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Background

As outlined in a City of Victoria motion:

  • "The Government of British Columbia and Legislative Assembly responded to a housing affordability crisis in July 2016 by introducing a 15% Additional Property Transfer Tax on residential real-estate purchases in the Greater Vancouver Regional District by foreign entities – a policy that has helped curb rapid escalation of residential real-estate prices in that region.

  • "The Government of Ontario has announced that a 15% Non-Resident Speculation surtax will be introduced for residential real-estate transactions in the Greater Golden Horseshoe region, extending from Kitchener-Waterloo to the City of Peterborough, and encompassing Greater Toronto and surrounding urban areas.

  • "There is a substantial risk that application of these surtaxes in Greater Vancouver and Greater Toronto will create distortions in the real-estate market in other regions, notably the Capital Region of British Columbia, which has been identified as one of the top-three costliest residential real-estate markets in Canada, alongside Greater Vancouver and Greater Toronto, resulting in a negative impact on housing affordability within BC’s Capital Region.

  • "Local government jurisdictions within the Capital Region have experienced sharp escalation in real-estate prices and land values in the past year, as well as growth in purchases by foreign entities, since the Additional Property Transfer Tax was introduced in Greater Vancouver, undermining the City of Victoria and Capital Regional District’s Strategic Objectives of increasing the supply of affordable housing."

It's not just foreign buyers driving up prices (e.g. we’re feeling ripple effects from people leaving Vancouver and there’re plenty of domestic speculators and other factors driving costs skyward). Furthermore, not all foreign buyers are speculators, which is why non-residents who have work permits, and many others are either exempt from the 15% tax or are eligible for a refund. But make no mistake, an influx of global capital is affecting both the cost and psychology of Greater Victoria’s real estate market.

Overall, the housing affordability crisis is complex, and we need action on multiple fronts. The 15% tax isn’t Gen Squeeze’s preferred policy to tackle speculation BUT it’s already on the books, has been recently improved to exempt people who work in B.C., has been shown to have some effect on cooling demand, and generates revenue for affordable housing. There's no good reason not to extend it here.

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