Is it fair? The 15% tax should accomplish a positive affect, in time (it has worked in other counties). The
tax itself isn’t the immediate concern. The concern is the many property sales contracts that have been frustrated
by the government. This tax was introduced without fair consideration for those (local) who had firm
contracts with closing dates that fell after August 2, 2016. In many cases, a foreign buyer will be effected,
but it can be two or more locals that suffer by the ‘how’ this tax has been implemented. For instance,
Betty and Joe had a firm and binding contract on their home in Vancouver. Acting in good faith, they put a
firm and binding purchase of sale on Mr. White Rock’s home. (They were buying it with the funds from their
Vancouver sale.) Mr. White Rock was thrilled and put an offer in on a condo in Victoria and an offer on the
retirement boat he has always dreamed of. Everybody was happy until August 2, 2016. You see, the sale of
Betty and Joe’s house fell through. The buyer was told he had to pay 15% ($441,176) more on his $2,500,000 house. He had only put a deposit
of $350,000 and it was closing August 15th. Now that buyer feels better about walking away and losing his $350,000 deposit, rather than coming up with $441,176 more. The
deal dies. Betty and Joe lose Mr. White Rock’s house because they don’t have the money from their sale (loss of deposit and possible law suit). Mr White Rock can’t complete
on his condo or boat purchase (loss of deposits and definite law suit). All because the Government jumped the gun on how and when the 15% foreign tax came into effect.
Who gained in this battle? Certainly not the local people (who the Government claims to be protecting) not the foreign buyer, who planned to open up a new tech company
supplying 125 new jobs to locals, but is now looking outside the Greater Vancouver area (perhaps Alberta). Did this drop prices? No. Did this provide more rentals? No.
Did this slow down the market? Sure, in 15% of the homes (valued over $2,00,000) in the Vancouver area. All this could have been avoided if Christy Clarke had, for once,
actually listened to more than her usual cronies that have her ear. A simple exclusion of firm contracts written before August 2 would have been fair to our locals.
Until next time,