Foreign buyers tax in the Okanagan

[W105]

no kidding Gixxer :) and according to them, it was only 1.8% of RE purchases in 2016 that was from Foreign Investors...(me thinks those numbers aren't very truthful) so the Government should have "consulted with Okanagan Realtors" before hurting these poor 1.8% Foreign Investors budgets...lol

as for the 2% Spec tax...well it does suck for those who have vaca homes in the zoned areas (not all of BC is included in this tax) but you do have the opportunity to rent them out to avoid paying it..and out of province owners who already are doing this (and there's many) won't be affected..the full time hard working residents of BC have always paid the Sunshine Tax, with lower wages and higher housing, now you get to, too..you have also made some very nice gains on those properties enjoying the huge RE yrly increases...(all gains come with some pains..) and those huge gains have hurt many locals that work and live here that can't find anything to buy or rent that doesn't take 50% of their income...

(please remember that there are 2 taxes being implemented in the zoned areas..one is for Foreign Investors (20%) and if you are a Canadian Citizen you are NOT a Foreign Investor..if you are an out of province owner that doesn't pay income tax in BC , it's the 2% Spec Tax that is being applied)

[vegas1500]

no kidding Gixxer :) and according to them, it was only 1.8% of RE purchases in 2016 that was from Foreign Investors...(me thinks those numbers aren't very truthful) so the Government should have "consulted with Okanagan Realtors" before hurting these poor 1.8% Foreign Investors budgets...lol

as for the 2% Spec tax...well it does suck for those who have vaca homes in the zoned areas (not all of BC is included in this tax) but you do have the opportunity to rent them out to avoid paying it..and out of province owners who already are doing this (and there's many) won't be affected..the full time hard working residents of BC have always paid the Sunshine Tax, with lower wages and higher housing, now you get to, too..you have also made some very nice gains on those properties enjoying the huge RE yrly increases...(all gains come with some pains..) and those huge gains have hurt many locals that work and live here that can't find anything to buy or rent that doesn't take 50% of their income...

(please remember that there are 2 taxes being implemented in the zoned areas..one is for Foreign Investors (20%) and if you are a Canadian Citizen you are NOT a Foreign Investor..if you are an out of province owner that doesn't pay income tax in BC , it's the 2% Spec Tax that is being applied)

I can tell you my home purchased in 2006 has no gains.....it has gone up and down but at present it might be up 3-4%. I wouldn’t say those are nice gains. Not complaining just saying not everyone is reaping the benefits of “very nice gains”.

[Urban Cowboy]

no kidding Gixxer :) and according to them, it was only 1.8% of RE purchases in 2016 that was from Foreign Investors...(me thinks those numbers aren't very truthful) so the Government should have "consulted with Okanagan Realtors" before hurting these poor 1.8% Foreign Investors budgets...lol

as for the 2% Spec tax...well it does suck for those who have vaca homes in the zoned areas (not all of BC is included in this tax) but you do have the opportunity to rent them out to avoid paying it..and out of province owners who already are doing this (and there's many) won't be affected..the full time hard working residents of BC have always paid the Sunshine Tax, with lower wages and higher housing, now you get to, too..you have also made some very nice gains on those properties enjoying the huge RE yrly increases...(all gains come with some pains..) and those huge gains have hurt many locals that work and live here that can't find anything to buy or rent that doesn't take 50% of their income...

(please remember that there are 2 taxes being implemented in the zoned areas..one is for Foreign Investors (20%) and if you are a Canadian Citizen you are NOT a Foreign Investor..if you are an out of province owner that doesn't pay income tax in BC , it's the 2% Spec Tax that is being applied)

I can tell you my home purchased in 2006 has no gains.....it has gone up and down but at present it might be up 3-4%. I wouldn’t say those are nice gains. Not complaining just saying not everyone is reaping the benefits of “very nice gains”.

Not to mention that even if you are up 4% the first year of paying these new extortion taxes, would go far toward wiping all that out, and the second year you'd be in the hole around 8K.
This is not an acceptable thing to do to fellow Canadians.

[RVThereYet]

I think at least some of people that will be affected by this 2% spec tax will become creative in an effort to avoid paying it...

If it was me, I'd look at finding a way to pay a small amount of BC income tax as that appears to be how they will determine whether you pay it or not.

One such way might be to incorporate a BC company - for example a property management company - and "hire" one of the owners of the property as an employee of this company. That company then manages the home (snow removal, lawn care, cleaning etc.). Pay the "employee" a small monthly salary or hourly wage (don't forget to account for the infamous Okanagan "Sunshine Tax" when determining this pay structure ;-)) and this should trigger some BC income tax due from the employee (i.e. owner of the property). There will be some initial and ongoing expenses (incorporation, corporate tax returns etc.) in setting up and "running" this company, but in the long run it should be much less than the 2% annual tax.

[W105]

it's also unacceptable for local residents who work, live and pay taxes yr round in these zoned areas to be knocked out of the market for buying or having to endure huge continual rent increases...and if they complain about it, they are told to either work harder or move...very unacceptable...

gotta say only seeing a 3-4% increase for a place here after owning it for almost 12 yrs, is a rarity..

[Prestige Mike]

3-4% gain seems exceptionally low.

From my search, the average house price in 2006 was 404,000. The average house price today is 703,000.

A raise of 74%

[johnny24]

3-4% gain seems exceptionally low.

From my search, the average house price in 2006 was 404,000. The average house price today is 703,000.

A raise of 74%

That's an average rate of return of 4.5%.

[Prestige Mike]

3-4% gain seems exceptionally low.

From my search, the average house price in 2006 was 404,000. The average house price today is 703,000.

A raise of 74%

That's an average rate of return of 4.5%.

I see, I believe I misunderstood. I thought he meant he had gains of 3-4% total.

[christopher]

I can tell you my home purchased in 2006 has no gains.....it has gone up and down but at present it might be up 3-4%. I wouldn’t say those are nice gains. Not complaining just saying not everyone is reaping the benefits of “very nice gains”.

I agree that 2006 was a high and homes above 550000 to 650000 in 2006 seem to be the ones that have had a rollercoaster ride.

[vegas1500]

3-4% gain seems exceptionally low.

From my search, the average house price in 2006 was 404,000. The average house price today is 703,000.

A raise of 74%

Bought in preconsteuction in 2006, moved in in 2008 (when the market tanked) when it already dropped an easy 140k. It’s come back finally but maybe just above par. Again not complaining but if this 2% is paid it truly is not viable to keep. Was going to be our forever home in 5-7 years but it will be on the market as an extra 13-15k a year just isn’t viable. Hope this solves all the housing issues but I truly don’t think it will at all.....

[steve mc]

lots of drug money in real estate,great way to wash money.

[alanjh595]

lots of drug money in real estate,great way to wash money.

AND they don't mind paying an extra 2% for the cleaning service. They would probably be happy paying 20% more. Sounds like a win/win scenario and makes the BC government a beneficiary of proceeds of crime.

[jpj]

no kidding Gixxer :) and according to them, it was only 1.8% of RE purchases in 2016 that was from Foreign Investors...(me thinks those numbers aren't very truthful) so the Government should have "consulted with Okanagan Realtors" before hurting these poor 1.8% Foreign Investors budgets...lol

as for the 2% Spec tax...well it does suck for those who have vaca homes in the zoned areas (not all of BC is included in this tax) but you do have the opportunity to rent them out to avoid paying it..and out of province owners who already are doing this (and there's many) won't be affected..the full time hard working residents of BC have always paid the Sunshine Tax, with lower wages and higher housing, now you get to, too..you have also made some very nice gains on those properties enjoying the huge RE yrly increases...(all gains come with some pains..) and those huge gains have hurt many locals that work and live here that can't find anything to buy or rent that doesn't take 50% of their income...

(please remember that there are 2 taxes being implemented in the zoned areas..one is for Foreign Investors (20%) and if you are a Canadian Citizen you are NOT a Foreign Investor..if you are an out of province owner that doesn't pay income tax in BC , it's the 2% Spec Tax that is being applied)

Your view of "gains" is an interesting one. After buying my home, the value dropped about 10%. I didn't view it as a "loss" as I didn't sell my home (and have never had any intention of selling it). What gains have I achieved to date? What gains have any residents of Kelowna achieved if they haven't sold their homes for a price higher than they bought if for? If its ok to charge me a tax as I am currently achieving "nice gains", will I be entitled to a rebate when property values go down?

This is taxation without any corresponding income. I will pay it with "after tax dollars" even if the value of my home goes down and I sell it at a loss. All of this regardless of the fact that I did not purchase my home to speculate on BC real estate.

[jasond_71]

I have to agree. We shouldn't be penalizing other Canadians. I'm all in favor of the foreign buyers tax but don't like the speculation tax and I live and pay taxes in BC.
I find it weird the tax is only in Kelowna and West Kelowna but not in the rest of the Okanagan. It should just be all of BC.
So an Albertan can buy in Lake county 10 minutes away and no tax?

[W105]

so only Foreign Investors speculate in our RE Market ?? not other Canadians ??...ahh, I don't really believe that...

like I said it sucks, but you do have the choice of renting it out...you seriously don't think that out of province owners who bought vaca homes here haven't already been renting them out on Air BnB for short term rentals ??

as for gains on a home not showing until you sell, really ?? as property values increase here and they have, alot...those gains are equity and you can use that equity right now, anytime you want...

if this spec tax turns out to be a nightmare, the government can simply get rid of it as easily as they implemented it...