Foreign buyer tax not enough to send housing market into tailspin: economist
Posted July 26, 2016 6:42 am.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – The province’s move to implement a 15 per cent property transfer tax for foreign buyers in Metro Vancouver won’t likely cause our market to nosedive, according to the chief economist for BMO Capital Markets.
“Some of the response to the move was that it wasn’t enough, that the tax will just be seen as the price of doing business by some potential foreign buyers,” says Doug Porter with BMO. “Then there are others who say the foreign buying isn’t really that big of a deal– and if that’s right, then this will have little or no impact at all.
“And then there’s the third criticism, that there are a number of ways to get around this, and that would also suggest that it won’t have much impact at all.”
But Porter says it could cool our housing market, to some extent.
“I think it will have at least a little bit of an impact,” says Porter. “But I doubt it’s going to tip the market over. I don’t believe it’s signficant enough to lead the Vancouver market into a tailspin.”
Even if this does change prices more than desired, Porter points out that government policy isn’t static, and the province could always pull a U-turn if needed, or, if it does little to turn off foreign buyers, go the other way and further increase the tax.
