Victoria council gives tentative approval to 15 per cent foreign buyers tax

Victoria city council has given a tentative green light to the implementation of a foreign buyers' tax similar to the one approved for Metro Vancouver in August 2016.

Council committee votes to ask province to implement same 15 per cent foreign buyer's tax as Metro Vancouver

Victoria wants a foreign real estate tax similar to Metro Vancouver's to cool its hot housing market. (Getty Images/RooM RF)

Victoria city council has given a tentative green light to the implementation of a foreign buyers' tax similar to the one approved for Metro Vancouver in August 2016.

The successful vote, made with council sitting as a committee of the whole, passed five to three. It will go to a second formal vote at a later city council meeting.

Once the vote is formally ratified, the city will ask the province to immediately impose the 15 per cent tax in Victoria,

Victoria has debated the foreign buyers tax issue for months as a way to grapple with escalating real estate prices.

Effort to cool market

Supporters of the 15 per cent tax say it cooled the real estate market in Vancouver.

The number of transactions involving foreign buyers dropped in the weeks after the tax, and home sales cooled in the Vancouver market.

On April 20, Ontario's provincial government revealed its own 15 per cent foreign buyers tax in the Greater Golden Horseshoe area to help cool the overheated Toronto real estate market.

Not everyone on board

Not everyone is on board with the tax in Victoria.

Victoria City Councillor Geoff Young voted against the tax, saying he is concerned about the way it targets foreigners.

"It brings back memories of the Chinese] head tax of many years which in some ways was a response to the economic concerns of people who were competing for jobs," he said.

He also has concerns about the effectiveness of the tax.

A recent report from Royal LePage says the market correction attributed to the foreign buyers tax in Vancouver may be "short-lived," as prices are slowly climbing up now.

The Vancouver tax is also being challenged in a proposed class-action lawsuit that claims the legislation violates Canada's Charter of Rights and Freedoms.

With files from The Early Edition