Relaxing foreign buyer ban would benefit B.C. housing market, expert says
The foreign homebuyers ban was launched on Jan. 1, 2023, when the Bank of Canada was aggressively raising interest rates and as other global economic factors weighed on homebuyers.
Canada’s budget for 2026 proposes to extend the prohibition on non-Canadians purchasing residential properties until January 1, 2029, with an exemption for new builds. This extension aims to cater to the development industry's request for stability despite non-residents not constituting a significant portion of the market. Michael Geller, a community planner and real estate consultant, believes that this extension would be advantageous for B.C.
"While foreign buyers have not been a major segment, they were once an important one," Geller commented. The ban was initiated on January 1, 2023, amid the Bank of Canada's interest rate hikes and other global economic pressures impacting homebuyers. In major markets such as Ontario and B.C., non-resident property ownership dropped from 4.5% in 2021 to 3.8% in 2024.
However, even if the ban is extended, B.C.'s provincial sales tax of 20% on foreign buyers remains a deterrent. This tax, combined with additional provincial taxes like the speculation and vacancy tax, especially affects those buying second homes in Vancouver. If B.C. were to modify or eliminate these taxes, it could significantly boost the housing market's development.
Geller emphasized that even for a short period, such relief would be beneficial. Despite this, the BC Conservative government did not address these taxes during their recent provincial election campaign.
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