So far the 15 per cent tax imposed on foreign buyers has not had an impact locally

Foreign buyers tax could soon have impact locally

A 15 per cent tax imposed on foreign buyers in Vancouver earlier this summer could slowly begin to impact Victoria's housing market.

A 15 per cent tax imposed on foreign buyers in Vancouver earlier this summer could slowly begin to impact Victoria’s housing market in the coming months, according to a local real estate agent.

Tony Joe, a realtor in Victoria and the president of the Asian Real Estate Association of America’s Vancouver chapter, said so far the implementation of the 15 per cent tax on foreign buyers in Vancouver has had little impact on the local housing market.

However, he believes that will potentially change in the fall.

Since the tax was implemented on Aug. 2, Joe said there has been a scare in Vancouver for buyers and sellers who wrote offers three or four months ago and have closing dates set for September or October.

“They remain uncertain that they’re going to sell because they know that they have a foreign buyer and is that foreign buyer able to get their 15 per cent?” said Joe, who specializes in foreign investors. “When asking buyers ‘are you going to be able to close’? They’re not able to give clarity. It’s a pretty significant grey area right now that are keeping a lot of people on their toes.”

However, if buyers choose to back out before the closing date, both parties will be left in the lurch.

Buyers who back out of the sale because of the tax could face legal ramifications, lose their deposits, which are typically sizeable, or they could be sued. It would also impact the seller, who would need to seek legal remedy.

“The implementation of the tax has really put a lot of people in a bad position,” said Joe. “They purchased with good will knowing what the local requirements are and to have this 15 per cent dropped on them, with no sign at all, especially at that dollar volume, is significant.”

The loss of a sale could also impact Victoria’s housing market.

For example, if a Vancouver resident has decided to sell their home to a foreign buyer and has put an offer on property on Vancouver Island before the closing date on their old home, both sales could be put in jeopardy.

“That is where we would see any sort of trouble. Because we already know, we serve a lot of Vancouverites coming into Victoria. If that influx of investor dollars starts going away in Vancouver, then we’re going to see fewer Vancouverites coming to Victoria.”

While he said it is difficult to pinpoint exactly how many deals are set to close in the fall, based on realtor discussion boards, he said there are “several,” adding he’s heard stories of many people who are reluctant to pack.

In August, the provincial government imposed a new 15 per cent tax on property purchased in metro Vancouver by non-Canadian citizens or residents, in an attempt to deal with the spiralling costs of real estate in the city.

Recent data released by the provincial government said foreigners bought 9.7 per cent of homes between June 10 to July 14 in Vancouver (representing $885 million worth of residential real estate).

The tax does not extend to municipalities outside metro Vancouver, such as Victoria, and will be used to support affordable housing and rental assistance initiatives.

Joe noted he will continue to keep a close eye on the impacts the 15 per cent tax will have in Victoria.

 

 

Just Posted

Greater Victoria Harbour Authority to fall fake eagle tree at Ogden Point

Last year a fake tree was installed to try to entice eagles to stay in the area, without much success

Ambitious B.C. Aviation Museum need $10M to get iconic Lancaster back in the air

Volunteers flock to work on bomber, restoration expected to take 10 years

Saanich to potentially host first hydrogen fuel station on Vancouver Island

Station proposed for corner of Quadra Street and McKenzie Avenue

Three children to run Victoria as ‘Mayors’ on Tuesday

Local kids will be honorary mayors for a day

Langford man sentenced to 15 months for child pornography collection

Andre Mollon sentenced for posession of more than 1,000 child pornography images and 70 videos

Victoria hosts ‘Ultimate Hockey Fan Cave’

The hockey cave was recently featured on a Netflix special

Inspirational Vancouver Island youngster dies after battle with brain cancer

Kaiden Finley ‘was seriously the strongest 11-year-old’

Is it a homicide? B.C. woman dies in hospital, seven months after being shot

Stepfather think Chilliwack case should now be a homicide, but IHIT has not confirmed anything

Indecent caller handed 18-month conditional sentence

Vancouver Island man pleaded guilty to making indecent phone and video calls to women across B.C.

Sources say Trudeau rejected Wilson-Raybould’s conservative pick for high court

Wilson-Raybould said Monday “there was no conflict between the PM and myself”

First Nations public art piece stolen in Nanaimo

Spindle Whorl went missing over the weekend, according to Nanaimo RCMP

Father-son duo at B.C. Children’s Hospital helps new dads fight depression

The pair teamed up to introduce the only known research-based mindfulness workshop for new dads

Mexican restaurant in B.C. told to take down Mexican flag

General manager of Primo’s Mexican Grill in White Rock: ‘I’ve never heard of anything like this’

B.C. NDP moves to provide tax credits, tax cut for LNG Canada

Provincial sales tax break of $596 million repayable after construction

Most Read