The B.C. government has brought in a 15 per cent property tax on all foreign real estate buyers in Vancouver.
It’s hoped the tax will cool off the scorching Vancouver housing market.
The new tax kicks in next week, meaning a foreign buyer who buys a $5 million home is looking at a tax surcharge in the neighbourhood of $750,000.
“It was still surprising they didn’t make it for the whole province,” Peter Kirk from Remax Kelowna said.
But Kirk says even though the tax only applies to Vancouver, it will have an impact on the Kelowna market.
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“About 20 per cent of our business in Kelowna right now is coming from Vancouver,” Kirk said. “Even in bad times, it drops to about 10 per cent, so it’s not like 20 per cent is going to go away but it could have an impact on the ability of people to sell and move here.”
Kirk says if the tax does come to the Okanagan, recreational properties will feel the brunt.
“I think one of the biggest impacts would be on a place like Big White because the impact would not be on the apparent, intended buyers, but it would impact heavily on American buyers who are a significant chunk of the business that happen at Big White,” Kirk said.
Councilor Luke Stack doesn’t anticipate the tax will come to the Kelowna area. However, he’s noticed the city is already feeling the effects of the over-inflated house prices in Vancouver.
“We are seeing repercussions in the Okanagan of the inflated property values in Vancouver,” Stack said. “And what we’re seeing is a lot of people choosing to sell their home and moving up to this area, and because there’s a lot of demand for our housing product, the prices are going up.”
According to Royal Lepage Kelowna, a two-storey home in Kelowna is selling for a little more than $630,000. That same home this time last year would have cost a little more than $558,000.
That’s an increase of 13 per cent.
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