The Pacific Province's recently dropped budget may not make homes any more affordable as hoped, according to industry professionals. British Columbia's proposed housing affordability plan, may even have the opposite effect and drive home prices up, says a spokesperson for the province's real estate development industry. Homes worth upwards of $3 million will also be privy to a transfer tax hike of 5 per cent, up from 3, which won't help matters, the spokesperson added.
The province is also being criticized for a tax geared toward those who don't pay income tax such as foreign owners of real estate. The tax basically targets those who leave their homes vacant for most months – out of province owners or cottagers, etc. But, no matter what is done to keep prices at bay, prices basically hinge on supply and demand. When there isn't enough housing, prices go up and fewer people can afford to become home owners.
By next year, taxes will be levied at 2 per cent of the home's assessed worth and that rule will apply not only to the Vancouver area, but to other popular areas like Kelowna. Experts say that could have an impact on local real estate as well as the local economy. More than 10 per cent of properties bought in the Okanagan are purchased by Albertans as secondary or vacation homes.
The real estate industry is an ever-evolving one with many influences constantly at play. A British Columbia lawyer experienced in real estate is always abreast of these changes and might be able to enlighten his or her client's looking to either sell or purchase a home. It is always wise to be armed with the latest information when considering a real estate deal.
Source: cbc.ca, "Real estate industry casts doubt on B.C.'s housing affordability plan", Tanya Fletcher, Feb. 22, 2018