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Budget targets house prices

How the 2018 budget affects Okanagan real estate

In an effort to cool housing prices in British Columbia, the government’s 2018 budget has introduced numerous changes that affect our real estate market in the Okanagan. 

The following tax changes are being imposed:

Property transfer tax changes

A buyer is charged property transfer tax when purchasing property in British Columbia (some exemptions apply).  The amount of tax is based on a percentage of the fair market value of the land and improvements on the date of registration of the purchase. 

Effective Feb. 21, 2018, the property transfer tax will increase a further two per cent on residential property on the portion of the fair market value greater than $3 million. 

Foreign buyer tax changes:

The existing 15 per cent foreign buyer tax that applied only to Metro Vancouver is being raised to 20 per cent and will apply to expanded areas. This new higher tax will also cover the Victoria and Nanaimo land districts on Vancouver Island, the Fraser Valley, Kelowna and West Kelowna.

Speculation tax added:

This tax will cover the same regions as mentioned above, and is aimed at absentee homeowners. The tax will start at 0.5 per cent of a home’s assessed value for the 2018 tax year and increase to two per cent in 2019. It appears that if the home is a principal residence, if the home is rented long term, or if the owner pays income tax in B.C. – these homeowners will be exempt. The effect on owners of vacation properties in our sunny Okanagan is not yet clear. 

As reported by the Vancouver Sun: 

“NDP Finance Minister Carole James acknowledged her government hasn’t fully modelled the effect of the new tax measures on B.C. real estate prices or calculated the cost of increased auditing and enforcement. But the government wants housing prices to drop, she said.”

Obviously aimed at cooling the housing price mayhem in the Lower Mainland, these taxes are now spreading to include the Kelowna and West Kelowna real estate market, although at this time, does not cover the North Okanagan, South Okanagan or the Shuswap. 



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About the Author

Lisa Salt is a Vernon born Realtor® who, along with her husband Gord Fowler from Calgary, lead one of the most successful and dynamic real estate teams in the North Okanagan. 

An international clay target shooting champion, Lisa brought the attributes of hard work and diligent focus to the real estate industry to create the success she and her team have today. 

To experience the local knowledge and expertise that only someone born and raised in the Okanagan can offer, call Lisa today and 'Just Add Salt'.

Website link:   http://www.saltfowler.com

Contact e-mail address:  [email protected]

 



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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