BC Liberals announce further adjustment to the 15% foreign Buyers' tax progarm

The province unveiled changes to its foreign-buyer tax on real estate on Friday, exempting skilled workers immigrating here under the provincial nominee program and offering rebates to foreign buyers who put down roots as permanent residents.

Premier Christy Clark said in January that she wanted to exempt people with work permits who were living and paying taxes in B.C. Finance Minister Mike de Jong said a range of rebates for new permanent residents were under consideration.

Friday, Clark and de Jong announced their decision, which includes an exemption to immigrants arriving under the provincial nominee program. The exemption takes effect immediately and is retroactive to when the tax was introduced in August.

De Jong also announced a rebate to the 15-per-cent tax for foreign nationals who obtain permanent Canadian residency within a year of buying a home, so long as they have lived in that home for at least a year.

The Finance Ministry expects 500 to 800 nominee-program buyers will apply for the exemption and 20 to 30 new permanent residents, which will cuts the province’s take from the tax by $1 million to $3 million for the first year of the tax.

For 2018-19 and onward, it estimates the measures will apply to between 100 and 200 applicants at a cost of between $10 million and $20 million.

Clark said the changes were designed to make sure the province can recruit skilled workers and entrepreneurs that the economy needs to expand, particularly the tech sector.

“British Columbia has always welcomed the world’s best and brightest, where they find a place that embraces them,” Clark said in the news release.

The NDP opposition, however, characterized the tweaks as a half-measure that fixes some of the mistakes the government made in rushing to implement the tax on Aug. 2, 2016 and doesn’t close loopholes that still allow speculation in real estate.

The tax was introduced to curb the influence of foreign investment on rapidly rising property prices in what was then a red-hot Metro Vancouver real estate market.

On Friday, de Jong said that since the tax has helped cool sales in those markets, the province “is now in a position to provide targeted relief to help ensure our province continues to attract skilled workers and entrepreneurs.”

Crafting the exemption for the provincial nominee program was the right thing to do, said Tom Davidoff, a professor with a specialization in housing at UBC’s Sauder School of Business.

“It’s hard to fake a (nominee-program application),” Davidoff said. “You can’t slide a student in to get a whole family off the tax, it’s really someone who has come here, has reason to be here and the province wants to be part of the workforce.”

However, NDP housing critic David Eby said the opposition warned government that the tax would unfairly hit people living, working and paying taxes in the province and Friday’s measure simply fixes that.

“So they’re halfway to an effective tax regime, but they’re not quite there,” Eby said.

 Eby said government should still close the loophole that allows foreign buyers to buy condos through so-called presales then sell the contract before the purchases close without paying the tax, even if they make a profit flipping the contract.

“It will ultimately be an election issue now, not a legislature issue,” Eby said.