A new survey finds that the vast majority of British Columbians are supportive of implementing new government interventionist policies that restrict most foreigners from acquiring real estate.
According to Research Co., such a legislation that bans foreigners from acquiring real estate would be similar to the 2018-enacted ban in New Zealand, where foreign buyers were also blamed for driving up housing prices.
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Exceptions to the highly touted New Zealand policy include foreigners who hold residency status, as well as citizens from Australia and Singapore due to free trade agreements. Despite the attention the ban has received, numerous media reports in New Zealand over the years indicate the ban has moderated the country’s housing market, especially for upscale homes, but prices remain high due to fundamentals, especially in Auckland.
Prior to the ban, foreign buyers accounted for just 3% of New Zealand’s real estate activity. BC government data shows a similar proportion for residential sales in the province in 2018.
The survey shows that the highest level of support for such a ban are residents of Vancouver Island and younger generations ages 35 to 54, with each of these cohorts voicing 88% in favour.
In British Columbia and Ontario, foreign buyers taxes have been enacted by the governments in each province, which has slowed down the housing markets considerably in the Vancouver and Toronto regions over the last three to four years. Within Metro Vancouver, this interventionist policy has particularly affected the luxury segment of the residential real estate market.
BC residents agree with the 2018 decision to increase the foreign buyers tax from 15% to 20% and to expand the foreign buyers tax to areas beyond Metro Vancouver, with 79% indicating this position.
There are also similarly high proportions of British Columbians agreeing with the implementation of the speculation tax targeting foreign and domestic homeowners who pay little or no income tax in the province, and those who own second properties that are not long-term rentals (77%).
Furthermore, 76% support the new tax of 0.2% on the value of homes between $3 million and $4 million, and the tax rate of 0.4% on the portion of a home’s value that exceeds $4 million.
As well, 72% of residents agree with the decision to increase the property transfer tax from 3% to 5% for homes worth more than $3 million.
With all that said, nearly six-in-10 BC residents (57%) think the provincial government’s current policies will be “effective” in shifting the housing market towards more affordable conditions, representing an 8% increase from a survey conducted in late 2019.