The Vancouver real estate market has been a hot topic in the news throughout the past few months. The most recent topic hitting headlines is the recently imposed tax on foreign buyers, which was implemented just a few days ago.
Though Whistler is not part of Metro Vancouver area, it’s still useful to know what’s going on a few hours south of us. Most importantly, it’s crucial to understand how changes in the Vancouver market could affect the Whistler market.
1. The Tax
On August 2, 2016, a new tax was implemented on foreign purchasers of properties in Metro Vancouver. Foreign nationals and corporations purchasing real estate in the Vancouver area – which includes Burnaby, Delta, Maple Ridge, New Westminster, Lion’s Bay, Bowen Island, Langley, North Vancouver, Pitt Meadows, West Vancouver, Surrey, Richmond Port Moody, Vancouver, White Rock, and Port Coquitlam (and a few others) – will have to pay a 15% tax on their purchase. This is no chump change – consider that 15% on a $2 million property is $300,000!
2. The Purpose
Why impose a 15% tax on foreign buyers? Quite simply, Vancouver is seeking ways to mitigate the affordability challenges that have seriously affected the market. Increasing numbers of foreign purchasers are buying investment properties in the Vancouver area, which is driving up prices in the market as a whole. The result: local residents are effectively being priced out of the market. The idea behind the tax is that it may help slow down foreign investment in Vancouver properties, helping resolve the affordability issues facing the city.
3. Is Whistler Affected?
Whistler is not directly affected by this tax, in that Whistler properties are not subject to the 15% tax – even if purchased by foreign buyers.
Indirectly, the tax may have some effects on the Whistler market. Since the tax is currently imposed on properties in the Metro Vancouver area, there is speculation that foreign investors will begin seeking out opportunities in other markets throughout British Columbia and Canada. Since Whistler is only two hours away from the city, and since the local market has plenty to offer to investors, it is possible that we will see a new wave of interest coming from international purchasers.
Of course, it’s also possible that a similar tax could make its way to other areas of the province, including Whistler. To date, there are no official reports of this happening.
4. Foreign Buyers in Whistler
Many non-Canadian residents have already discovered the appeal of Whistler, whether purely in investment terms (through short-term rentals, for example) or because they want to be close to some of the best skiing terrain in the world.
But foreign buyers represent a smaller percentage of the market than most people think. You can check out my blog post discussing where Whistler buyers originate from, but the majority of purchasers come from the Metro Vancouver area, are Whistler locals, or live elsewhere in BC or Canada. Foreign buyers still represent a relatively small part of the Whistler real estate market – for now, anyway.
5. What Does This Mean for Me?
If you’re a foreign buyer interested in purchasing a Whistler property, nothing has changed. My best advice to you is to brush up on financing and tax requirements associated with owning a Whistler property and to continue to follow the news. It is possible that changes will be implemented in the future, but for now, you won’t be subject to the 15% tax in Vancouver.
Any questions about this new tax, the market, or anything else? Please do not hesitate to get in touch with me!