Homes and Condo Mississauga

Vancouver housing sales slump as market braces for tax impact

Home sales fell 9 percent last month in the Vancouver region, as transactions for detached properties fell while prices remained high, with the full impact still to be felt from new housing taxes levied by the BC

In the budget On February 20, the minority government of the NDP announced a series of measures to reduce house prices, including what it calls a speculation tax imposed on residents from outside the province. The NDP also increased and extended the foreign buyer tax of the province beyond Metro Vancouver, a region that was initially attacked by the former BC Liberal government in 2016.

While industry experts warn against too much reading in the statistics From February, they say that the cumulative impact of the tax measures will be seen in the coming months as the market comes in the traditionally busy spring season for real estate.

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February sale of detached houses, apartments and townhouses amounted to 2,207 in Greater Vancouver, compared with 2,424 transactions for the same month in 2017.

The average price for condos sold in the region was $ 750,052 last month, an increase of 24.2 percent from a year earlier and only a slight hike compared to the record of $ 751,358 in January. The average price for townhomes last month reached a new highest value of $ 938,805, an increase of 13.4 percent compared to February 2017. The price for detached houses, however, fell by 1.2 percent in the past year to an average of $ 1,737,030, the real estate committee. from Greater Vancouver said on Friday.

Sales volume for detached houses saw the biggest decline as 621 properties changed hands last month, down 16.6 percent from a year earlier. In the past year, revenues from condoms fell by 7.1 percent to 1,185 deals in February, while home-wide sales went up from 0.7 percent to 401 transactions in the Vancouver region.

The sale of detached buildings from last month was 39.4 percent lower than the 10-year average for the month of February.

Cameron Muir, chief economist at the BC Real Estate Association, said what the province calls a speculation tax is more accurately described as largely a vacant tax that drives Albertans to purchase recreational property in large parts of BC and encourage others to use their existing secondary to sell houses and to look at places like Palm Springs, California

There will be substitutes outside of Canada that will be considered,” Mr. Muir said. “I would say that if you buy a BC site in Nanaimo or Parksville as Albertan, you may be planning to live there full-time if you retire, but that is not the same as buying in Palm Springs.” [19659002] Real estate economist Tom Davidoff of the Sauder School of Business at the University of British Columbia said that he supports the move of the NDP against Albertans and residents of other provinces, although he acknowledges that there will be hardships, such as seniors with a fixed income . He suggested that in those cases the NDP could encourage Alberta’s seniors to postpone the taxes due until their B.C. ownership is eventually sold.

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“It is outrageous that a grandmother from Alberta has to pay the tax, but it is also outrageous that many people can not afford to work and I living in Vancouver, I do not want to sound heartless, but you can not make an omelet without breaking eggs, “said Davidoff.

A notable tax measure that experts from the industry say, is likely to be the higher end housing market is an increase in transfer tax. In 1987 the then Social Credit government introduced the tax: on the first $ 200,000 of the purchase price, the home buyer branched out more than 1 percent and then paid a tax rate of 2 percent on the amount above $ 200,000. [19659002] That formula remained unchanged until February 2016, when the BC Liberals revealed a new calculation in what they said as higher taxes on luxury properties. In the budget of last month, the BC NDP increased the tariffs for what the high-quality & # 39; houses.

The percentage of 1 percent still applies to the first $ 200,000. A rate of 2 percent comes on the part between $ 200,000 and $ 2 million, 3 percent on the part between $ 2 million and $ 3 million, with the NDP raising interest on the portion above $ 3 million to five per cent of the previous 3 percent.

For example, with a $ 3.5 million purchase, the property transfer tax is $ 93,000. If it is a foreign buyer, that purchase is also subject to $ 700,000 in foreign buyer tax, which has risen from 15 percent to 20 percent, as of February 21st.

Bc from last month. The budget also includes an increase in the school tax of the province, which affects the part of the value of a building that is estimated to exceed $ 3 million.

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Andy Yan, director of the city program of Simon Fraser University, said the definition of luxury within the city of Vancouver is far in excess of $ 3 million. Yan studied BC Assessment data for valuations on July 1, 2017. He discovered that 19,399 detached houses, or 24 percent of the total in that category, were rated at $ 3 million or more in the city of Vancouver.

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