Vancouver has introduced a new tax law adding 15% to the purchase price of a home for foreign buyers, with the aim to make housing more affordable for local people and reduce its negative social impacts. Currently Canadian citizens pay a Property Transfer Tax of 1% on the first $200,000 of the purchase price, 2% on the remaining amount up to $2million and 3% on the rest. The foreign tax will be paid in addition to the Property Transfer Tax. Immediate effects of this tax have been recorded by The Real Estate board of Greater Vancouver. Within the first month Vancouver’s home sales fell by 26% and the average price of a detached property declined to C$1.47million ($1.1m). This appears to be a positive step towards inhibiting the housing crisis. However is it enough to stem the social effects of gentrification? The average price of a detached family home in downtown Vancouver has hit highs of C$1.56m (US$1.2m). This hefty price tag has increased by 32% in the past year and has attracted an influx of foreign investors to the area . It has also been reported that there has been a rise in uninhabited homes bought by foreign investors in Vancouver, totalling near 11,000. These rapid changes have displaced local people out of the city centre as a result of rising living costs.
Have you spotted a signal of change?