While the Toronto real estate market had another record month with sales of 9,989 homes, (best July in history) and the average sale price rose to $718,422, the big news for the Toronto market actually came from Vancouver. The BC Liberals passed a new 15% tax on foreign buyers as part of the government’s plan to slow foreign speculation that many blame for making the region’s homes the most unaffordable in Canada. The new legislation also gives the City of Vancouver the power to implement a vacancy tax.
Between June 10 and June 29 2016, 14% of the transactions closed in Richmond, 11% in Burnaby and 5% in Metro Vancouver were not Canadian citizens or permanent residents. In total over four weeks in June and July foreign citizens who were not permanent residents bought more than 1 billion dollars’ worth of real estate in British Columbia.
This new tax means an extra $225,000 in taxes for people from abroad buying an average home in Vancouver for $1,500,000.
While Ontario is not currently considering such a tax, it’s quite obvious that many foreign buyers will now choose Toronto instead of Vancouver. This will lead to further increases in Toronto prices.
While there is no need to panic, prices will not jump overnight, there is no question that the sooner one can purchase the better the price terms and conditions will be.
While no one can predict the market and something may trigger a slowdown in purchasing whether it’s a war or some other event we cannot even imagine (no one expected BC to pass this new tax), right now there’s nothing on the horizon and its full steam ahead!
If you are considering a purchase or know of someone who is, give me a call, I will be happy to put my experience and expertise to work for you.
Have a great August,
Your Friend in Real Estate.
Steven Maislin, R.E.B.B., I.R.E.S.
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