One Metro Vancouver realtor says he will cut the sale price of his own Richmond home by 15 per cent for any international buyer, in a response to the province's new levy against foreign citizens who want in on the region's overheated housing market.
Eddy Chen says a person from Mainland China was in the midst of completing the paperwork on the purchase of his $1.98-million house last week when the government announced its new tax, which comes into effect Tuesday. The buyer walked away after the government's surprise announcement because they could not get a home inspection or mortgage approved fast enough to avoid an extra $298,000 brought on by the new levy, he said.
"They said they don't think it's fair to foreign buyers, so they want to wait and see what happens [to the market]," he said. "There's no point for them to rush it through, because they thought they were ripped off by those extra taxes."
Now, he has upped the price to $2.35-million, but says he will take 15 per cent off for any foreign citizen hit by the new property transfer tax so they "have an equal opportunity to get the property."
Mr. Chen, a Taiwanese immigrant who has sold real estate in B.C. for more than a decade, is not breaking any laws by offering to lower the price in this manner, and he says he has the right to list his house at any price he likes.
Realtors, developers and others in the industry raised concerns as soon as the tax was announced, ranging from the potential impact on B.C.'s reputation as a safe place to invest, to the fairness – and even the legality – of applying a tax retroactively. The tax applies to deals that were signed, but not yet closed, before Tuesday.
Rich Coleman, the Deputy Premier and minister responsible for housing, told The Globe and Mail that the government could not do anything to help those foreign buyers who did not join the rush to close their existing deals before the deadline.
"The reality is whenever you make the change, somebody gets affected – that's just the reality of tax law," he said.
The surprise move introduced a tremendous amount of uncertainty into Canada's hottest housing market, and Finance Minister Mike de Jong has said he has no idea how many foreigners will pay the new levy.