Foreign buyers accounted for 6% of the value of residential property purchased in British Columbia over the past year, according to the latest data from the province’s Ministry of Finance.
The BC government took in $102m in revenue from the foreign buyer tax from August 2, 2016 to March 31, 2017.
The government started collecting data on foreign buyers in June 2016, and abruptly introduced a 15% tax on the purchase of residential real estate in Metro Vancouver about two months later. However, despite the tax, the majority of transactions involving foreign buyers in the province from June 2016 to May 2017 (totalling about $3.27bn) happened in Metro Vancouver.
A detailed accounting of how much foreign money is being invested in homes in the province is not possible due to obscure ownership structures, critics and industry experts have pointed out.
The share of sales volumes involving foreign buyers have plunged in Metro Vancouver, from 16.5% in June 2016 to 4% in January 2017.
In Richmond, 27.2% of total sales involved foreign buyers in June 2016. This figure plunged to 1.3% in August 2016 and rebounded to about 10% per month throughout most of this year. From June 2016 to May 2017, the cumulative value of all property purchases in the city involving offshore buyers was 12.6%, or about $610m.
However, this is only for the offshore buyers that the government is aware of, according to NDP MLA David Eby.
He noted that a 2016 Transparency International Study showed that 50% of the top 100 most expensive properties in Vancouver are owned via obscure methods, such as offshore trusts or shell companies. Another popular strategy is to have students or housewives represented on land titles.
The prevalence of such ownership methods in Vancouver suggests the government cannot detect many offshore buyers in luxury markets across British Columbia, Eby said.
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