Foreign buyers tax in the Okanagan

[wisdom01]

Lets face it, the problem isn't a few of our friends from Alberta who buy a second vacation/future home in BC ... it's the offshore money coming in and skewing the market.

Not only do I as a BC'er find that offensive but as a Canadian I find it scary ... any 1st year economics student can tell you that as you sell off pieces of your country you are loosing control of it. Eventually you hit a critical mass where you loose the voting block and the official language gets changed.

I say stop non-Canadian ownership of anything, house or business, in the whole country ... and for the properties/businesses owned by offshore entities already pass a law that restricts resale to anything but a Canadian citizen.

[Merry]

Although off shore money investing in our housing market is an issue, the statistics show it isn't the largest issue. Canadians speculating in certain housing markets is the biggest cause of increased prices.

[goalie]

For one they should hit all the speculating realtors who buy up several properties then unload at a nice profit. I know for a fact that happens here. No speculation tax for them!

[Jack DeBear]

From Alberta I witnessed the Alberta to Kelowna absentee landlord-vacation home-retirement dream-or flip-it at your leisure condo development campaign that took place in the mid-2000s.

A buddy of mine bought in on that and, as it turned out, in the late-2000s I landed a contract for specialized work in the Kelowna area. So (with visiting rights) he rented his unit out to me.

During my time there, I searched about for a place to buy too, but then I decided I would never-ever purchase anything in BC and live there--too much fantasyland going on.

Whenever my buddy needed something done on his unit I saw slack service from his property management company--no ‘Alberta let’s get-er done attitude there –it was just layers of bureaucracy and buck passing, and ‘you know how these things can take a while’ excuses.

And the Realtors© . . . well, most of them . . . I found out, as I went along, how I had more decorum and knew more about the truth to tell than they did, so I’d rather have done their work for myself.

Also, as my buddy’s building and many of the suites around his started to deteriorate from all of the, mostly under the table via Kijiji, transient tenancy use and abuse as the seasons changed (the strata bylaws said ‘no short-term ‘vacation type’ rentals’—ha!—pity the landlords who were complying and the few owners there who actually lived in the place) whatever gains the investors were ‘supposed’ be making on speculations began to be eaten into by the condo fee hikes, special assessments, renos, and repairs.

So as a flock of the disgruntled owners decided to sell out, their asking prices began to escalate to beyond reason—for all but a greedy few on both sides of the fence.

And by the time I left town, I was feeling pretty bad for having been a temporary interloper during a rising affordable housing and rental crisis.

Still, because I’d taken care of my buddy’s place, and had well contributed to his mortgage, he decided to sell out too. So he set the price well, sold it himself to another Albertan (with a big speck dream who thought he was winning the lottery), and managed to make what he thought would be, even in the future, a realistic profit on his investment (good luck on doing the same now with the same business plan new owner).

And I’ll tell ya, all of them ‘salt-of the earth’ ‘genuine’ industry type workers that I met when I was in the area . . . well I really think they deserve a fairer shake in wages and housing than what they’ve been getting--where for some reason they wish to make their homes.

And I can dream, too, that this new tax system might just manage to make a positive outcome for them.

[vegas1500]

Just browsed through this thread. I agree with the Albertan that this "foreign buyer's tax" is "unfair," but I don't think it will impact prices that much. If you can afford a $700,000 second home in the Okanagan while most of us can't even afford a 1st home for that, it stands to reason that a small percentage of that being this new tax will not chase most of you away.

Glacier I agree it won’t impact prices, but I can tell you that just about everyone I know will be selling if this goes through. Affording a second home and wanting to throw away 12-20k a year in extra taxes is Two differnt things. Most people that can afford a second home are probably “money wise” and these people will not spend their money this way.

[vegas1500]

That's kinda true but a lot of people have owned homes here when they were not 700k

True, but these Hellbertans will sell their $700,000 house in West Kelowna, and buy one a few km away in Peachland or Summerland or on Westside Road for less money. Problem solved.

Definitely crossed my mind but I would be to scared of this tax being implemented in those areas also. Being a vacation home/future retirement home I would just take my money and possibly invest in a vacation property stateside. I know I would have a lot nicer place for the money. Come retirement time, I deal wth that then...

[vegas1500]

these taxes could be imposed all across BC eventually... their objective is to stop people from using housing like the stock market and it is and has been used like that otherwise we wouldn't be in this situation...our Finance Minister actually said that..

and is that really a bad thing ?? I mean look at the shape we're in here..it's critical when it comes to housing... and for those who have second homes here, sure this tax is gonna hurt and it might make some sell BUT it also might make some rent...and if you don't want to do that, then pay the taxes and we'll use them here for the residents that work, live and pay taxes yr round to lower the amount of income that they have to use from the cost of housing (buying or renting)

if you think it's ok for the residents of this city to have to pay alot of their income just to live here, then it should be ok for anyone who has second homes that sit vacant to have to do the same...welcome to the Sunny Okanagan :)

What about the commuters. They make “Alberta money” but then rerun home to lovely BC. Should Alberta put an extra tax on them? I think it seems logical, and I work wth many good people that do exactly this.

[Merry]

Glacier I agree it won’t impact prices, but I can tell you that just about everyone I know will be selling if this goes through.

Which is exactly what the Government wants you to do. If you're not willing to move here, or rent it out, they'd like you to sell to somebody who is willing to do one of those things.

And, if enough people do decide to sell, the prices WILL eventually come down.

So, from the Government's point of view, it's a win-win whatever you decide to do.

[Merry]

What about the commuters. They make “Alberta money” but then rerun home to lovely BC. Should Alberta put an extra tax on them? I think it seems logical, and I work wth many good people that do exactly this.

If the companies could hire Albertans to do the jobs, they would. Because it would save them having to pay all that money out in airfare every month.

It's not just Alberta who hires from Out of Province, I had a friend who commuted from Ontario to a mine in BC for years. And my hubby just finished commuting from here to a mine in Ontario.

The point is that we're all Canadians, and have the right to live and work in whichever Province we choose. The Albertans who have vacation homes here, do have the right to move here if they so desire. Alternatively, if they prefer to keep their second home, they do have the right to rent it out and avoid the speculation tax. My only beef with the new law is that it should apply to everybody who owns a second home, not just those who don't pay BC tax. Because a Canadian is a Canadian, and we should all be treated the same.

[vegas1500]

Glacier I agree it won’t impact prices, but I can tell you that just about everyone I know will be selling if this goes through.

Which is exactly what the Government wants you to do. If you're not willing to move here, or rent it out, they'd like you to sell to somebody who is willing to do one of those things.

And, if enough people do decide to sell, the prices WILL eventually come down.

So, from the Government's point of view, it's a win-win whatever you decide to do.

I don’t think there’s enough homes to make the desired effect. As much as I would love to move to Kelowna, it’s still a few years away and if I rented it out it takes away the ability to use it, which defeats the purpose. I am not is disagreement but do believe the amount is ridiculous......do the math, it just doesn’t make sense unless their whole plan was to force people to sell. And a lot of the homes people own as vacation properties are probably out of reach financially for the average person.

Do you really think a 10 million dollar lake front home where the property taxes are already 60-70k should pay an additional 200k a year? Does that even make sense? No person with a good financial sense would carry those costs.

[Merry]

Do you really think a 10 million dollar lake front home where the property taxes are already 60-70k should pay an additional 200k a year? Does that even make sense? No person with a good financial sense would carry those costs.

And I suspect the Government already knows that. My guess is they're hoping you'll sell and prices will come down. And, if you can't sell, then the Government is probably hoping it will encourage developers to build more affordable homes in future. Not just homes for the wealthy few.

[adionline]

Although off shore money investing in our housing market is an issue, the statistics show it isn't the largest issue. Canadians speculating in certain housing markets is the biggest cause of increased prices.

Wrong. The statistics are extremely misleading and are spun constantly to downplay the real numbers. Take it from someone who grew up in Vancouver and lived downtown up until a few years ago. I have seen the progression first hand. The biggest problem is still off shore investing, everything else is a domino effect and takes a backseat to what's really going on. Canadians are not the problem. It has truly become a sad state of affairs that we are now penalising our own citizens for owning property in a country that they live in. No other country would allow what is happening here with off shore investors. One wonders how many politicians have their hand in the pot to allow the current status quo to go on. It's hard to give up easy money.

Anyways, I can't wait for prices to suddenly become affordable again once we show those Albertians what's up with this tax. /sarcasm

[Jack DeBear]

Hi vegas1500,

I see several posts where you say, "If this tax goes through . . .."

Has it not 'gone through?"

According to this, "The speculation tax will be effective for the 2018 tax year. Homeowners will receive their first tax notice in the fall of 2018."

http://www2.gov.bc.ca/assets/gov/taxes/ ... on-tax.pdf

[goalie]

well this tax is not gonna do much to curb foreign money flowing in. As usual they left a bunch of loop holes like commercial properties not falling under the tax.

[Gixxer]

well this tax is not gonna do much to curb foreign money flowing in. As usual they left a bunch of loop holes like commercial properties not falling under the tax.

Commercial properties arent in a crisis like the rental/housing market is.