Selling Your Home: What Goes Into That?

On Monday, we shared with you the news that, for Greater Vancouver, the BC Liberal government released its decision to implement a 15-percent tax on all purchases made by foreign buyers. Since then, the real estate world has exploded with commentary and thoughts on this knee-jerk decision.The tax, while intended to cool the outrageous housing market in Greater Vancouver, has the potential to cause more trouble for two reasons:
  • it affects only a single region, and
  • there is no grandfathering.
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For people living outside of the Greater Vancouver area, the biggest concern centres around the fact that this new tax is only applicable to Vancouver. All the province has done is eliminate one pool of real estate, not swathed the entire province in protection. When foreign buyers continue to purchase Canadian real estate as an investment (and they will), they will simply move elsewhere, to places like Victoria, Kamloops, Kelowna and other already-smouldering areas.Here in Victoria, where inventory and space to add inventory is exceptionally limited, buyers and potential buyers are concerned, and rightfully so. We have already seen a flood of buyers come over who were priced out of Vancouver homes, and to investors who can’t get into the Vancouver market, Victoria is an appealing second choice. Let’s be honest: we know we live in paradise and the secret is out.The other flaw with the government’s plan is the fact that there is no grandfathering to speak of. For any foreign buyer who purchased prior to August 2, 2016 but hasn’t completed the deal yet, the tax will apply. People who have purchased pre-sale will have an additional cost added to their purchase, surely something they hadn’t counted on.Plus, for the foreign investors whose currency means so much more here in Canada, a 15% tax on their purchase will still be a no-brainer. Perhaps most importantly, we will need to see what the government does with the incoming tidal wave of money.Are you a foreign buyer? What are your thoughts on this new tax? Let us know on our Facebook page or email us at mikej@thecondogroup.com.