NDP Releases 2018 Budget; Victoria Real Estate Impacted

The minority NDP government announced their 2018 budget yesterday, and some big changes are coming to the BC real estate markets.

As of today, the foreign buyer tax has been expanded to include the Fraser Valley, the Capital Regional District, Central Okanagan, and Nanaimo Regional District, as well as Metro Vancouver. Further to that, the tax will increase from 15 per cent to 20 per cent.

It’s an interesting move on the government’s part in that foreign investment in Victoria hasn’t been too large of a factor here, unlike Vancouver. When Vancouver introduced their tax in 2016, we were worried that Victoria would see increased pressure from the spill-over of those foreign buyers moving out of the Vancouver market. That didn’t happen to nearly the extent we, and the provincial government, thought it might. To increase the tax and to apply it to other regions seems a short-sighted solution to a much larger problem.

The other introduction is the new speculation tax on residential properties in Metro Vancouver, Fraser Valley, Capital Region District, Nanaimo Regional District, and Central Okanagan. The new tax targets people who have invested their money in these markets with no intention of occupying the properties but instead letting the properties sit vacant to increase in value. It will also aim to capture real estate buyers who do not pay income tax in BC.

While it is laudable that the current BC government has addressed something about these highly pressurized real estate market, these taxes aren’t the solution. One blog I read this morning quoted Ann McMullin from UDI and said it best: “‘Unfortunately, today’s Budget did not address the real problem of getting new housing approved and built.’ McMullin pointed out that ‘in many municipalities it can take four to five years to receive approvals, and two to three years to construct new buildings - that means we won’t see any relief from this new housing investment for more than 7 years.’”

People want to live in Victoria, including the people who already live here. Leaving out those who want to move to Victoria, we’re still struggling to find all ranges of buyers places to purchase that have true value. Without the appropriate supply to meet this burgeoning demand, the struggles we’re facing in highly desirable BC areas will continue.

Have questions about BC’s budget and how it might affect your buying or selling process? Call or email us. We would love to chat more!

Until next time.

Kaley + Mike