“I think it’s a great idea. I do agree with it. But what are they going to do with the 15%? Are they going to use it to offset the land transfer tax for first-time buyers. That’s what they should do,” Omer Quenneville, an agent with Homeward Real Estate, told REP. “That would make it easier for first-time buyers to get into the market. Of course, they won’t; it’s going to go into the general coffers.”
On Monday, British Columbia Finance Minister Mike de Jong announced a 15% land transfer tax for all Vancouver real estate purchased by foreigners.
The additional tax will take effect August 2.
And this type of tax was actually suggested by Quenneville, who is also licensed in Hong Kong, a few years ago.
Speaking to REP sister publication MortgageBrokerNews.ca in February 2014, Quenneville suggested a similar tax requirement currently required of foreigners who purchase Hong Kong real estate.
“It’s called ‘stamp duty’ but it’s basically the same thing [as a land transfer tax]: The way they do it is they charge similar to what the provincial government charges here, about two and a half per cent every time you purchase a piece of property,” Quenneville said at the time. “What gets really interesting is if you do not have a Hong Kong address – in other words a foreign investor – you have to pay an additional, I believe it is, 18 per cent.
“So all these foreign investors who are pushing the market up and making a bundle would have to pay a significantly higher land transfer tax.”
As to what impact Vancouver’s recently announced tax will have, Quenneville argues the current low Canadian dollar will still entice foreign buyers. And he also believes a similar tax will be instituted in Toronto.
“They’re still 10% ahead with the tax; When the dollar was at par, this would have made a big difference,” he said. “Trust me, when [Ontario Premier] Kathleen Wynne gets wind of this, she’ll be slapping it on in Ontario pretty quick.”
A Canadian agent -- who also operates in Hong Kong -- agrees with the recently announced 15% tax on foreign buyers in British Columbia, and believes a similar tax is coming to Toronto.