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.

 

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Sooke’s Paul Laroche gold snipes along Sooke River, a process in which he uses a mask and snorkel to find pieces of gold. (Aaron Guillen/News Staff)
Hitting the jackpot: Sooke man finds niche audience by gold-panning on YouTube

Paul Laroche, 29, with over 215,000 subscribers, opens up about his journey

Felix Townsin, shown here with his sister, Lexi, who died on Oct. 19, 2019. Felix is a big part of a family initiative aimed at finding a cure for Blau Syndrome. (Photo contributed by the Townsin family)
Quest to cure Blau syndrome a family affair

John Stubbs student produces film for late little sister Lexi

An untitled Emily Carr painting of Finlayson Point was donated to the Art Gallery of Greater Victoria by brothers Ian and Andrew Burchett. The painting had been in their family for several decades. (Courtesy of the Art Gallery of Greater Victoria)
Newly public Emily Carr painting depicts well-known Victoria view

Painting among several donated to Art Gallery of Greater Victoria

An incident on Sooke Road is slowing traffic Wednesday evening. (Courtesy of Mona Hazeldine)
Sooke Road incident snarls evening traffic

Two-vehicles involved in rear-end crash Wednesday evening

Provincial health officer Dr. Bonnie Henry updates the COVID-19 situation, B.C. legislature, Oct. 26, 2020. (B.C. government)
B.C.’s COVID-19 case count jumps by 287, another senior home outbreak

Two more deaths recorded, community outbreak in Okanagan

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of Oct. 27

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

MMFN First Nation has said that it will restrict access to portion of Highway 28 that passes through the Nation’s land until a road use agreement is reached. (Black Press file photo)
Vancouver Island First Nation blocks highway access to logging trucks in Gold River

Mowachaht/Muchalaht First Nation restricting access for Western Forest Products pending road deal

100 Mile Conservation officer Joel Kline gingerly holds an injured but very much alive bald eagle after extracting him from a motorist’s minivan. (Photo submitted)
Rescued bald eagle that came to life in B.C. man’s car had lead poisoning

Bird is on medication and recovering in rehab centre

The B.C. Centre for Disease control is telling people to keep an eye out for the poisonous death cap mushroom, which thrives in fall weather conditions. (Paul Kroeger/BCCDC)
Highly poisonous death cap mushroom discovered in Comox

This marks first discovery on Vancouver Island outside Greater Victoria area

Cowichan Search and Rescue set up near the Silver Bridge in Duncan on Wednesday morning, Oct. 28, 2020 to rescue a dog from the Cowichan River. (Citizen file)
Cowichan Search and Rescue save dog from icy Cowichan River

Search and Rescue’s swiftwater team was called in

Premier-elect John Horgan and cabinet ministers are sworn in for the first time at Government House in Victoria, July 18, 2017. (Arnold Lim/Black Press)
Pandemic payments have to wait for B.C. vote count, swearing-in

Small businesses advised to apply even if they don’t qualify

A raccoon paid a visit to a Toronto Tim Hortons on Oct. 22, 2020. (shecallsmedrew/Twitter)
Who are you calling a trash panda? Raccoon takes a shift at Toronto Tim Hortons

Tim Hortons said animal control was called as soon they saw the surprise visitor

Most Read