Sutton Showplace Realty (2015) Chilliwack

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Foreign Buyers Tax Changes

28 February 2018
Sutton Showplace Realty Chilliwack
B.C.'s new package of tough measures takes aim at tax evaders who stash money in real estate, hide their ownership and speculate in the increasingly pricey market.

The foreign buyers tax is coming to Greater Victoria, Nanaimo, the Fraser Valley and the Central Okanagan Regional District, and is being increased to 20 per cent on the purchase price from 15 per cent in markets where it is applied. New taxes are coming in for speculators, and buyers of luxury properties will pay more.

These moves are underway as capital region citizens watched home prices become unaffordable to many amid a tight rental market with a vacancy rate of just 0.7 per cent.

Finance Minister Carole James said in her Tuesday budget speech that B.C. is facing a housing crisis. She predicted the new measures “will return a sense of fairness.”

“What we are looking to do is to moderate the market,” she said.

B.C. will monitor impacts and make adjustments if needed as measures are rolled out, she said.

Jock Finlayson, executive vice-president of the Business Council of B.C., said: “It’s quite unprecedented in the housing market to have several measures like that brought forward so we will see how it filters through and affects the market. We don’t know at this point.

“It could be disruptive. It may be nothing more than a hiccup.”

Government initiatives will impact the upper end of the market, Finlayson said.

About half a billion dollars of additional revenue generated from the various housing-related announcements will go to support government afforable housing efforts and other government programs, he said.

New reporting rules for buyers, a public registry to reveal who actually owns a property, and sharing new information with the federal government to fight tax evaders will all be required by the province.

“Countering tax fraud starts with better information sharing,” James said.

B.C. is aiming to end murky home ownership.

“Numbered companies, offshore and domestic trusts, and stand-in owners hide the true source of the capital that is flowing into our real estate market,” James said.

“We are going to change that.”

Lack of information is a “real gap” and the first step in auditing and enforcement, she said.

James referred to condo-flipping, which sees units being sold multiple times before they are even lived in.

“We wonder if those people have paid their fair share of taxes,” she said.

Developers will be required to collect and provide comprehensive information about pre-sales. Condominium are frequently marketed through pre-sales agreements before construction is finished.

Foreign buyers are expected to deliver $35 million in taxes in the 2018-2019 year, and $40 million the next year.

The majority of buyers in the Victoria area are domestic.

Between April and the end of December last year, foreign buyers bought 343 properties in the capital region, representing 4.1 per cent of all sales.

They spent $261 million, of 4.8 per cent of value, out of $5.4 billion.

B.C. will be requiring more disclosure by foreign buyers including: information on worldwide income, household information, and social insurance numbers. Relevant information will be shared with Canada Revenue Agency.

The new speculation tax applies to international and domestic buyers who do not pay income tax in B.C and might leave their homes vacant.

“B.C.’s real estate market should not be used as a stock market,” James said.

The measure "will penalize people parking their capital in our housing market simply to speculate, driving up prices and removing rental stock," she said.

The speculation tax is expected to bring in $87 million in the 2018-2019 tax year and $200 million in the next year.

Luxury home buyers will pay more.

A new property transfer tax on homes worth more than $3 million will bring in $81 million more in each of the coming three years. The tax is rising to five per cent of a property’s value from three per cent.

The capital region is home to many luxury properties valued at $3 million and more. These homes are often along the waterfront in municipalities such as Oak Bay and North Saanich. Some are occupied only part time.

It remains unclear how the speculation tax will affect people who have more than one home or hold a vacation property in B.C.

--Article from The Vancouver Courier http://www.vancourier.com/news/foreign-buyers-tax-coming-to-victoria-nanaimo-fraser-valley-and-okanagan-1.23180154

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Chilliwack Real Estate Sales Remain Steady, Prices Continue to Rise

15 February 2018
Sutton Showplace Realty Chilliwack

New, stricter mortgage rules in place as of Jan. 1 may have cooled the local market slightly, but with the fewest numbers of listings in a decade, prices continue to rise and the Chilliwack and District Real Estate Board (CADREB) area remains a seller’s market.

Those homes that are being snapped up are increasingly on the higher end pointing to more and more buyers rolling into town from west of here.

“We continue to see an influx of interested buyers from Greater Vancouver and surrounding areas,” CADREB president Greg Nord-Leth said.

“A million dollars is a lot of money, but that may only buy you an older home in the Metro area in need of renovation, but it buys a luxury home here. There is little hope of buying more than a small condo in Vancouver for $500,000, but that could buy you a home with a yard in the Eastern Fraser Valley.”

Of the 184 homes sold in the CADREB region in January 2018 – which includes Chilliwack, Agassiz, Harrison, Hope to Boston Bar – the average price was $477,586, that’s up 10.5 per cent from $432,042, the average price of the 182 homes sold in January 2017.

That compares to the average sale price of $464,897 for all of 2017, up 16.8 per cent from 2016, which was similar to the 18.4 per cent increase in 2016 versus 2015.

What real estate in Chilliwack in 2018 will look like is the subject of some speculation with various factors. The hotter markets to the west in the Fraser Valley and Metro Vancouver are causing a serious spike in demand here, which, coupled with the shortage of listings, is pushing prices up.

“While no doubt the newly tightened mortgage qualifications played a role, the lack of inventory remains a concern locally,” Nord-Leth said in a CADREB press release. “Realtors report that it is becoming increasingly difficult to find properties that meet their client’s wish list.”

Adding uncertainty to the market is what impact the new mortgage “stress test” might have. It means qualifying for a mortgage is a little tougher as it’s based not only on what a potential home buyer can afford now, but what they would be able to afford if the interest rate rise.

There were 91 single-family homes purchased last month compared to 88 in January 2017. On first blush, that might show the mortgage rules are not having an impact. On the other hand, it could mean the new rules are impacting people who might have otherwise bought elsewhere in the Lower Mainland but instead are looking to Chilliwack for its relative affordability.

Of the 184 homes that sold in January, the highest number (25) sold in the $450,000 to $499,999 range. That was followed by 18 sales in the $550,000 to $599,999 range, and 17 at the $600,000 to $649,999 level.

There were two sales of homes over the $1 million mark, with one of them topping $1.5 million.

Anecdotally, realtors say many homes are currently selling above asking prices.

At about two thirds of where realtors would like this number to be, there were just 663 active listings at the end of January down even from the low number of 747 a year ago.

“It’s the lowest number of listings in more than a decade,” Nord-Leth said. “It remains very much a seller’s market.”

https://www.agassizharrisonobserver.com/news/chilliwack-real-estate-sales-remain-steady-prices-continue-to-rise/

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Dual Agency Real Estate Rules Extended to June

09 February 2018
Sutton Showplace Realty Chilliwack
IMPORTANT UPDATE ON SUPERINTENDENT’S RULE CHANGES

In November 2017, the Superintendent of Real Estate approved new rules to come into force on March 15, 2018. The new rules focus on two major areas:

  • prohibiting the practice of dualagency, except in remote and under-served locations, and
  • enhancing consumer education and awareness by increasing mandatory licensee disclosures regarding representation and remuneration.

The Office of the Superintendent of Real Estate (OSRE) is aware of the considerable concern from industry surrounding the implementation of the new rules and the impending implementation date. We are listening and are committed to ensuring a successful implementation of the new rules and ensuring that licensees have necessary information regarding the rules before they come into force. To this end, we would like to provide licensees with the following update.

1. Date Change – New rules related to dualagency and enhanced consumer disclosures will now come into force June 15, 2018.

While the Real Estate Council has been working diligently to implement the new rules, it is clear that additional time would ensure a more successful roll out of the upcoming changes. Therefore, the Superintendent is amending the effective date of the rules related to dualagency and consumer disclosures from March 15, 2018 to June 15, 2018. This will allow education on the new rules to be in place prior to their coming into force.

2. Education for Licensees and Clarification of Rule Intent

In addition to the change in implementation date, OSRE intends to publish a package of rules for consultation in the coming weeks to protect the interests of consumers and to ensure stability within the industry.

Clarity to licensees on how to handle conflicts of interests involving clients

Licensees require clarity on how conflicts of interest related to client representation must be addressed. In ending dualagency, it was OSRE’s intent that a licensee be able to continue to work with only one party to the trade in real estate where there is a conflict relating to client representation – as long as they receive consent from all parties involved in the transaction. A new rule will be drafted to support this approach, which will strengthen consumer protection.

Continuing professional education for licensees

We will be proposing a new rule to ensure licensees receive continuing professional education related to significant new rule changes and as other circumstances arise when it is in the public and professional interest to do so. The first course established under this rule is currently being developed by the Real Estate Council. Council has advised us that this course will be available this Spring.

Additional Rules: Language Proficiency Requirements and Disclosure of Remuneration to Sellers

In addition to the significant changes identified above, the new rule package will enshrine the Real Estate Council’s English language proficiency requirements into the rules and will provide clarification that the 5-11.1 disclosure of remuneration to sellers must include dollar amounts.

The proposed rules will be posted for a 30 day public consultation in the coming weeks on the OSRE website at www.gov.bc.ca/OSRE. Licensees will be notified directly when the consultation is open.

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If anyone from the public would like to further understand how this my or may not effect them, please inquire with any questions you may have by commenting on the post below or filling our our contact form.

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