British Columbia’s move to impose a new tax on foreign property buyers in Vancouver has had an immediate impact.

The Real Estate Board of Greater Vancouver says preliminary figures show home sales fell 51 per cent in the first half of August 2016 compared to the same period of 2015.

Detached property sales, often seen as a key indicator in the real estate industry, fell a mammoth 66 per cent.

The 15 per cent tax was introduced on August 2 in response to a real estate market that has been spiralling out of control in recent months and years.

The new tax was announced on July 25, and led to a frantic week of action as buyers, sellers, realtors and lawyers faced a race against time to complete deals.

Many law offices had to turn business away as people looked to avoid being subject to the new tax.

Vancouver is a key target market for wealthy, mainly Chinese, buyers, causing house prices to rise astronomically in recent years.

A recent study by the Economist Intelligence Unit singled out the city as the most livable in Canada, and the third-most livable worldwide.

Top 10 Most Livable Cities

Figures: The Economist Intelligence Unit

The average price of a detached home in July was $1.76 million, according to the Real Estate Board.

Some of the blame for the problem was attributed to the Quebec Immigrant Investor Program (QIIP), which awards permanent residency to high net worth investors in return for an $800,000 investment over five years.

QIIP: Primary Requirements

• Have a legally acquired personal net worth of $1.6 million.
• Possess two years of suitable management or business experience within the five years preceding the application.
• Commit to making an investment of $800,000 into a passive government guaranteed investment for a period of five years bearing no interest.
• Intend to settle in the province of Quebec.

Although candidates for the program must declare their intention to live in Quebec, it is their constitutional right to move wherever they want in Canada once permanent residency is granted.

Many of them end up in Vancouver and Toronto, pumping their money into the hot housing markets of two of Canada’s premier cities.

Federal Immigration Minister John McCallum admits there is little he can do to stop this happening.

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