EVEN in hot markets like Vancouver, property sales normally slow in the summer. But for Sonia Prasad and other estate agents, the last days of July were a blur of hurried sales and paperwork as buyers and sellers rushed to complete transactions before an August 2nd deadline.

On July 25th the provincial government of British Columbia decreed that, after that date, foreign buyers must pay a new 15% tax on any residential purchase. The tax is aimed at stopping these buyers from pushing up prices in Canada’s most expensive residential-property market.

Ms Prasad’s last-minute buyers included a couple from China who were purchasing a C$400,000 ($305,000) condominium in the suburb of New Westminster for their son, a student starting college in September. The extra $60,000 they would have had to pay might have killed the deal, Ms Prasad says. Indeed, the tax seems likely to have prompted some foreign buyers to walk away from deals agreed, but not completed, before the deadline.

Governments at all levels, from municipal to federal, have been under pressure over the past two years to curtail foreign ownership in Vancouver. Michael de Jong,...Continue reading