Expert says easing foreign buyer ban would benefit B.C. housing market

Canada’s 2026 budget, announced Thursday, proposes extending the Prohibition on the Purchase of Residential Property by Non-Canadians Act to Jan. 1, 2029, with an exemption for new residential properties. The current ban is set to expire on Jan. 1, 2027, so the proposal would extend it by two years, except for new builds.

Community planner and real estate consultant Michael Geller says the extension would benefit B.C. He said the development industry has been seeking the change. Foreign buyers are not a significant segment of the market, he said, but were important in the past, and any benefit would be welcome while housing markets are weak.

The foreign homebuyer ban took effect on Jan. 1, 2023, as the Bank of Canada was raising interest rates aggressively and other global economic factors were weighing on homebuyers. Statistics Canada says non-residents made up a very small share of property owners in major markets such as Ontario and B.C. in recent years.

Before the ban, non-residents owned about 4.5 per cent of properties in B.C. in 2021, just over four per cent in 2022 and 2023, and 3.8 per cent in 2024.

Geller said B.C. still has a 20 per cent provincial sales tax on foreign homebuyers, even if the federal ban is extended. He said that tax would deter many foreign buyers even if the federal ban were removed, particularly those considering a second home to live in part-time in B.C. They would also have to pay the provincial speculation and vacancy tax. Buyers in Vancouver would face an additional empty homes tax. Geller said these taxes have harmed the industry.

The new B.C. Conservative government did not mention the foreign buyers tax or the speculation and vacancy tax during the recent provincial election campaign. Geller said removing or modifying the taxes would bring a significant benefit. He added that removing some of them for even a two-year period could spur substantial new development, which B.C. needs.