This week’s provincial budget had a focus on housing and real estate. Some policies are tax measures geared at the wider-province but could have impacts here in Lynn Valley. If you are planning to buy or sell in the next few months here are some issues you might want to consider.
The government released a 30-point housing strategy aimed at reducing housing demand, curbing tax fraud, building affordable housing, and increasing security for renters.
New tax measures include increasing property taxes and property transfer taxes on residential properties valued above $3 million, expanding the foreign buyer tax, and implementing a housing speculation tax.
LynnValleyLife’s real estate experts Jim Lanctot and Kelly Gardiner are available to help you understand how these changes will affect your property sale or property search. They can be reached at 778-724-0112
Foreign Buyer tax
- Effective Feb. 21, 2018, the foreign buyer tax will increase to 20 per cent from 15 per cent and will be extended to the Fraser Valley, Capital, Nanaimo, and Central Okanagan Regional Districts.
“This may refocus some of the buyers who left the North Shore for regions like Victoria,” said Jim Lanctot, publisher with LynnValleyLife and realtor with the Lynn Valley office of Oakwyn Realty. “By distributing this tax wider it may no longer deter those keenly interested in areas like the North Shore.”
- The province will implement a new speculation tax on residential properties, targeting foreign and domestic homeowners who don’t pay income tax in B.C. This includes those who leave their homes vacant.
- The tax will apply to the Metro Vancouver, Fraser Valley, Capital, and Nanaimo Regional districts and in the municipalities of Kelowna and West Kelowna.
- In 2018, the tax rate will be $5 per $1,000 of assessed value. In 2019, the tax rate will rise to $20 per $1,000 of assessed value.
- The province will administer the tax and will collect data to enforce it including, social insurance numbers, household information, and world-wide income information.
Property Transfer Tax
Effective Feb. 21, 2018, the Property Transfer Tax on residential properties above $3 million will increase to five per cent from three per cent.
Provincial School Tax
Beginning in 2019, the provincial school tax will increase on most residential properties in excess of $3 million.
The province will:
- Invest $6 billion in affordable housing to create 114,000 homes over the next 10 years.
- Enhance local government capacity to build and retain affordable housing.
- Require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases.
- Track beneficial ownership information.
- Collect additional information to increase transparency and strengthen enforcement in real estate.
Database on pre-sale condo assignments
The province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases. The information will be reported to a designated government office and shared with federal and provincial tax authorities to ensure taxes are paid.
Task force on money laundering and tax evasion
The province will work with the federal government to formalize a multi-agency working group on tax evasion, money laundering and housing.
Residential Tenancy Branch
Increased funding to the Residential Tenancy Branch to reduce wait time, improve service and deal with disputes more quickly, as well as strengthening the Residential Tenancy Act and the penalties for those who repeatedly break the law.
(Source: Greater Vancouver Real Estate Board)