B.C.’s foreign ownership tax led to sky-rocketing price growth in exempt cities like Kamloops: TRU study

KAMLOOPS — A study from Thompson Rivers University shows Kamloops’ housing prices have continued to skyrocket since 2016 when the B.C. government implemented a Property Transfer Tax on foreign entities buying property.

Additionally, findings from Dr. Jabed Tomal of TRU’s Department of Mathematics and Statistics and Dr. Hafiz Rahman of the Department of Economics shows Kamloops was impacted when the city wasn’t included in the B.C. government’s extension of the foreign property tax in February, 2018.

Tomal and Rahman compared housing prices in Kamloops to Chilliwack since 2016, when Metro Vancouver’s foreign property tax was implemented and caused sudden rapid housing pricing increases in other communities, and 2018 when other regions – which included Chilliwack but not Kamloops – were included. The extended foreign buyers tax included the Capital Regional District, Fraser Valley Regional District, Metro Vancouver Regional District, Regional District of Central Okanagan and Regional District of Nanaimo.

Studies shows Chilliwack’s housing prices stabilize – albeit not lowering – after the expansion, while Kamloops continues to grow in a linear line.

(Thompson Rivers University via SpringerLink).

“Since 2016, skyrocketing home prices in Kamloops have quantified a price growth of 513.33 per cent higher after the threshold effect than the price growth prior to the threshold effect,” the study states.

The study notes that the other two cities within the proximity of Vancouver – Kelowna and Victoria – have experienced their own threshold effects from the foreign property tax, but they’re different from Chilliwack and Kamloops, suggesting it’s due to the differences in size, business capacity and universities. Tomal and Rahman say they are working on developing models to detect threshold effects in Victoria and Kelowna as well.

The full report can be viewed here.