Spike in foreign buyers sparks debate about extending 15% tax to Victoria

The rising number of foreign buyers snapping up properties in the Victoria area is sparking debate about bringing Metro Vancouver's 15 per cent tax on foreign buyers to the capital region as well.

About 6.3 per cent of transactions in the Capital Regional District in October involved foreign purchasers, according to the latest figures released by the province yesterday.

That's up from about 3.5 per cent since the last report in September.

The Victoria area is now only second to Richmond, where 6.7 per cent of transactions involved foreign buyers. It's also seeing higher foreign investment than Vancouver, which came in at 2.5 per cent.

That has some critics calling for the 15 per cent foreign buyers tax to be expanded to the Capital Regional District.

"The government shouldn't wait until it's a serious problem," said NDP housing critic David Eby. 

"They should simply impose the tax on south Vancouver Island so that there is a level playing field for buyers and there's not this weird distortion effect created by this tax that is not very well thought out."

Province watching Victoria market

When the foreign buyers tax was brought in for Metro Vancouver in early August there was concern it would push investors into other hot housing markets in the province.

B.C. Finance Minister Mike de Jong said he is watching the upward trend in the Victoria market closely.

"We structured the tax in a way that would allow, if we make the decision, for a geographic area to be added and to be captured by the 15 per cent tax," he said.

Oak Bay Mayor Nils Jensen, who personally visits new homeowners in his community, said he's not surprised the latest numbers show a rise in foreign buyers.

But Jensen said he still wants to see a longer period of data collection before a tax is considered for the Victoria area.

"Is it a cause for concern? No. It is offshore investment and I think in the long run, that is good. We have new people coming into our community and we welcome them."

The president of the Victoria Real Estate Board also says more data is needed before implementing a foreign buyers tax in the Capital Regional District.

"The provincial government has only been measuring it for a short period of time," said Mike Nugent. 

"We don't have a year's worth or two year's worth of data where we can point to it a lot closer just to know even if it's not a seasonal difference.