New figures from the provincial government show that the number of foreign buyers has dropped to 1.1 per cent during the first nine months of 2024.
Foreign buyers accounted for 1.2 per cent of all real estate purchases in 2023.
B.C.'s Finance Ministry released the figures in response to a new study from Statistics Canada that show that one-in-four B.C. real estate purchases between 2018 and 2020 were investment purchases. About two-thirds of all investment purchases made in B.C. between 2018 and 2020 were by purchasers with addresses in B.C.
Out-of-B.C. buyers accounted for just under nine per cent, while foreign buyers accounted for about 13 per cent. The rest classified as business investors.
Provincial figures do not distinguish between investment and non-investment purchases, but broadly align with the figures from Statistics Canada that show the number of foreign buyers of investment properties has been dropping since the introduction of the foreign buyers tax.
Of all the residential property transactions in the province, three per cent had a foreign buyer in 2017, according to the provincial government. In 2018, that number had dropped to 2.4 per cent before declining below two per cent.
The ministry said the foreign buyers tax belongs to a suite of measures including the speculation and vacancy tax designed to improve affordability. It cited a recent Canada Mortgage and Housing study that says the speculation and vacancy tax has helped add 20,000 condo units to the long-term rental market in Metro Vancouver.
These figures appear against the backdrop of the pending introduction of B.C.'s flipping tax.
It will kick in on Jan. 1, 2025 and applies to profits from the sale of residential properties held for less than two years. The rate will be 20 per cent for properties sold within one year of purchase, then decline on a graduated scale before hitting zero after two years. The tax includes exemptions for life events such as separation or divorce. The addition of another housing unit to the property will also trigger an exemption.
Profits from property flipping is also fully taxed as business income if residential properties are sold within the first year of possession under federal legislation effective since Jan. 1, 2023.
