Vancouver Island Real Estate Foreign Buyer Tax — Will she or won’t she?
Will she or won’t she add the dreaded 15% Vancouver Island Real Estate Foreign Buyer Tax for Property Transfers? This is a question that engages the thoughts of my clients this Spring. This is especially the case as Buyers and Sellers consider what Premier Christy Clark’s government has done in the Vancouver Real Estate Market. My thoughts are these:
Not too long ago, the BC Provincial Government changed the Provincial Property Tax for homes purchased in the Greater Vancouver Area. The tax was 1% on the first $200,000 and 2% on the balance. Currently the tax is the same if you are a Canadian resident. However, if you are a foreign Buyer, the tax is now 15% on the whole amount. This is huge for foreign Buyers. It reflected a government attempt to regulate price increases through Government regulation, intervention and taxation. One Vancouver Lawyer told me that if the Provincial Government did not intervene, the coming election would be lost.
Vancouver Island Real Estate Foreign Buyer Tax — The impacts . . .
The obvious result of this regulation, taxation and intervention was an almost immediate price reduction in the price of Vancouver homes. It is a double digit drop in prices and a substantial slow down in the number of sales. You can read the details here — THE GLOBE AND MAIL
There has been talk about putting this new tax on Victoria homes and likely on homes across the rest of the Province. You can read about this in several online articles. Witness the TIMES COLONIST ARTICLE
However, the issue is both political and economic. There has been much concern about the decline of the Vancouver Real Estate Market. The Province is headed into an election and BC home owners concerned about price drops also reflect a huge voter block. Therefore, Premier Christy Clark’s Government is attempting to walk back the challenging aspects of the new added tax. Foreign Buyers who buy and who will be working in Vancouver could soon be exempt from the additional Tax. The Vancouver Sun quotes Christy Clark–VANCOUVER SUN
The Vancouver Sun has further quotes on this from Finance Minister Michael de Jong. Check it out — VANCOUVER SUN
Vancouver Island Real Estate Foreign Buyer Tax — Conclusions . . .
So, the question remains . . . will there be a Vancouver Island Real Estate Foreign Buyer Tax. This realtor believes there will be continued pressure to slow the impact of foreign Buyers on our market. However, at the same time, there will be some refining of the legislation around the matter of who pays the tax and how it is administered. If a foreign Buyer plans to settle down and work in the area, then tax relief is likely. If on the other hand, a Buyer buys a home and plans to be absentee, then likely there will be no tax relief.
In the end. . . time will tell. These are political times. It is fashionable to let others pay taxes–Especially foreigners. It is all good until my / your house value drops.
If you want to discuss this further, Associate Broker and Realtor (R) Lorne Gait is happy to discuss this further. Let’s get in touch.