Developers fear that even in a project where foreigners played only a minimal role, the whole deal would still be slapped with the new foreign buyer’s tax
The new 15 per cent tax on foreign buyers of B.C. homes has made its shockwaves felt not only among overseas nationals, as even developers have expressed concerns about the possible impact of this new levy on cooperative ventures involving non-Canadian companies.
Specifically, developers fear that even in a project where foreigners account for only a small part of the ownership group, the whole deal would still be slapped with the 15 per cent tax, reported Joanne Lee-Young for the Vancouver Sun.
“This is our understanding,” Urban Development Institute president and CEO Anne McMullin said, adding that buyers might end up shouldering the increased cost.
“I recognize that some of our members would be happy to have non-local developers have to pay a higher price for their development sites, but there are also a number of members (and some very significant members) who have the potential to be caught by this legislation, and to have their sources of investor funds capped by this [new tax],” McMullin added.
While the executive did not specify what ongoing or planned projects fit that profile, McMullin stated that any policy that would aim to cool down the country’s overheated housing markets should take into account that foreign presence is unavoidable in an open world.
“People want an easy solution for a complex situation,” she lamented. “It’s a global marketplace and it’s far more complicated.”
The B.C. Ministry of Finance said the applicability of the new tax would depend on various factors.
“It would depend on the situation, but, for example, if six out of 10 directors are foreign citizens, that corporation could be considered foreign controlled and the tax would apply,” the Ministry wrote in an email to the Vancouver Sun.
“When two (or more) corporations are purchasing a property and one of those is foreign owned, the foreign corporation would pay the full 15 per cent on the portion of the property they own.”
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Specifically, developers fear that even in a project where foreigners account for only a small part of the ownership group, the whole deal would still be slapped with the 15 per cent tax, reported Joanne Lee-Young for the Vancouver Sun.
“This is our understanding,” Urban Development Institute president and CEO Anne McMullin said, adding that buyers might end up shouldering the increased cost.
“I recognize that some of our members would be happy to have non-local developers have to pay a higher price for their development sites, but there are also a number of members (and some very significant members) who have the potential to be caught by this legislation, and to have their sources of investor funds capped by this [new tax],” McMullin added.
While the executive did not specify what ongoing or planned projects fit that profile, McMullin stated that any policy that would aim to cool down the country’s overheated housing markets should take into account that foreign presence is unavoidable in an open world.
“People want an easy solution for a complex situation,” she lamented. “It’s a global marketplace and it’s far more complicated.”
The B.C. Ministry of Finance said the applicability of the new tax would depend on various factors.
“It would depend on the situation, but, for example, if six out of 10 directors are foreign citizens, that corporation could be considered foreign controlled and the tax would apply,” the Ministry wrote in an email to the Vancouver Sun.
“When two (or more) corporations are purchasing a property and one of those is foreign owned, the foreign corporation would pay the full 15 per cent on the portion of the property they own.”
Related Stories:
New B.C. tax might exacerbate Toronto situation
Broker: The real story is being missed
