British Columbia recently announced a rollback on the 15% foreign homebuyers tax put into place six months ago. The province will lift the foreign owners tax on people relocating who have work permits in Metro Vancouver. The rollback came in reaction to President Trump's executive order temporarily blocking entry by seven Muslim majority countries. The B.C. Premier, Christy Clark, announced the rollback is an effort to attract more people coming in for work to live in her province.

The tax, which went into effect in August 2016, levied a 15% tax on home buyers in metro Vancouver who were not Canadian citizens or permanent residents. It also applied to corporations not registered in Canada and/or those controlled by foreign investors. This proposal was introduced to cool the real estate market after the Vancouver area witnessed a 25% surge in home prices in 2016. According to policy makers, much of the surge in prices at that time was accredited to an influx of relocating foreign buyers driving up the demand for housing.

After the measure took effect, opponents of the tax hike were criticizing its narrow focus that seemingly targeted immigrants who were working and paying taxes in the metro area. Adding fuel to the fire, a group of relocating foreign buyers even launched a class action lawsuit against the province stating that it violates the international treaties where Canada committed to treat foreign nationals favorably.

According the data from the British Columbia government, the tax did have the desired impact on the market, the number of purchases by relocating foreign buyers dropped dramatically from 13.2% to 1.3%; reducing pressure on local buyers. The province received an additional $10.1 million from the new tax during the six-month period. However, some of that revenue might be coming to the relocating buyers in the form of a refund. As a result of the new rollback, a reform has been introduced to issue refunds to the buyers that paid the tax and then obtained their citizenship or permanent resident status shortly after.

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