British Columbia joins a growing list of regions around the world that are restricting foreign investment and speculation in their housing markets. Here are measures taken in six other countries to cool house prices.
Australia has barred non-resident investors from buying resale houses unless they plan to live there full-time. The country's Foreign Investment Review Board requires international buyers to apply for permission to purchase or build new houses and charges fees to prospective investors that increase with the price of the house. Foreigners who break the rules could face jail time, while real estate agents who help clients bend the rules face steep fines.
The Australian government has also forced some foreign owners – including Canadians – to sell properties that do not qualify under the new rules. The rules temporarily slowed the housing market, but prices have rebounded, economists from Toronto-Dominion Bank wrote.
Grappling with a surge in prices in its largest city, Auckland, New Zealand's central bank introduced measures late last year requiring property investors in the city to have deposits of at least 30 per cent. The Reserve Bank is now proposing to expand those rules to the rest of the country.
Opposition leaders have begun calling for the government to ban offshore buyers, while some of the country's major banks said last month they had started to refuse mortgages to borrowers without New Zealand-based income.
Explainer: Everything you need to know about real estate reform in B.C.
Last year, politicians in Britain sought to close a tax loophole that gave foreign property investors an advantage over local buyers. The government now requires all investors to pay capital-gains taxes as high as 28 per cent when they sell houses that are not a full-time residence. Previously, the taxes had applied only to British residents.
Lawmakers also unveiled increases to the land-transfer tax – or "stamp duty" – on purchases of investment properties. The moves have done little to curb foreign demand, with several real estate analysts reporting that interest from Asian buyers in British properties had soared since last month's Brexit vote.
Singapore has long restricted real estate purchases by foreigners, making it difficult for non-residents to buy anything beyond a condo. It has also tried to curb speculation by imposing extra taxes on buyers who sell their houses in less than four years and extra fees for those buying second homes. Since 2013, foreigners have faced an extra 15-per-cent tax when they buy a house.
In 2013, Switzerland imposed restrictions on property investment, limiting the number of properties deemed to be second homes to 20 per cent of the housing stock in any community. Those rules are on top of existing restrictions for foreign investors from outside the European Union, who can buy only a limited number of houses in the country each year.
Some commentators have referred to British Columbia's move as a "Hong-Kong-style tax" because it echoes the 15-per-cent tax that Hong Kong introduced in 2012 on house purchases by non-permanent residents and companies. Buyers who sell within three years pay as much as 20 per cent in extra taxes.
Foreigners are barred from buying houses in certain neighbourhoods. In mainland China, foreigners must spend at least a year in the country before they are allowed to buy real estate, and are restricted to one house purchase until they have become permanent residents.