A new tax announced by the provincial government penalizing non-Canadians purchasing homes in Vancouver and Bowen Island left realtors scrambling this week. On Thursday, Bowen Island realtors Dee and Frazer Elliott rushed to finalize the removal of subjects on a house that had sold months ago, but had a previously scheduled closing date in mid-August.
“If this deal doesn’t close tomorrow, our client will have to pay either $114,000 in tax, or back out of the deal and lose his deposit of $38,000,” said Dee Elliott on Thursday. She added that her Singaporean client was purchasing a relatively modest house and hoping to send his son to school on Bowen Island. “This tax may have been prompted by investment by Chinese buyers in Vancouver, but many other people from all over the world will have to change their plans because of it.”
On Friday, Elliott confirmed that “everything fell into place” for her client, allowing the deal to close without adding the new 15 percent tax on to the sale price.
The new tax affects greater Vancouver including Bowen, but not Squamish, Whistler or the Sunshine Coast.
“Abbotsford will not be affected by this tax, but we are,” says Elliott. “For a young family looking to get out of the city and raise their kids in a nice community they can either move to Bowen or east of the city. This tax does not affect Abbotsford. It will most definitely affect prices here.”
Since the beginning of 2016, realtors on Bowen have sold 48 homes, down from 57 this time last year. That drop is largely attributed to a lack of houses up for sale. Elliott says that prices started to climb in March of 2016, and although she does not have data on how much prices have risen, she says it could be as much as 30 percent.
“I don’t think that anyone who has a deal happening on their property should feel safe right now,” says Elliott. “This will impact potential buyers moving here from Vancouver, this will affect sellers who have plans to buy new properties on Bowen, this will affect the economy down the line. This will have repercussions beyond what we can imagine right now.”
Dee’s son and business partner, Frazer Elliott, says he has personally been impacted by the rising prices and agrees that something needs to be done to make housing more affordable, but disagrees with this tactic.
“My wife and I were just at a point where maybe we could afford to buy a home when prices started to rise, and we were priced out of the market,” he says. “Something definitely needs to be done to make housing more affordable but adding a 15 percent tax to pre-existing, legally binding contracts is not the way to do it. Not to mention the fact that Canada is built on immigration, and this is clearly xenophobic.”
Other Bowen Islanders who have been priced out of the housing market, may find themselves agreeing with the 90 percent of people in Metro Vancouver polled by the Angus Reid Institute who agree with the tax.
Kara Chanarin and her family have lived on Bowen Island for seven years, but due to the change in the local market in this year, can no longer afford to buy or rent.
“It has always been our intention to buy, but with starting a family it just got put on hold,” says Chanarin. “We were looking to buy last year, but went away between July and November. When we got back, things had changed. We were lucky to find a small apartment that I thought would be temporary, I thought we would buy or at least find something better to rent but houses were flying off the market. People from Vancouver started publicly offering to pay for rentals at a much higher price, meaning what was left of the rental market got more expensive.”
Suddenly, Chanarin says her family was priced out of the buyer’s market and the renter’s market. This spring she started reluctantly planning a move to Nova Scotia.
“I was supposed to go to town and pick up a motorhome today, and start packing boxes,” she says. “But the person we were getting the motorhome off got delayed. Now, I am thinking about this tax and trying to figure out how it will affect us. I see a glimmer of hope in the fact that houses don’t seem to be selling quite so quickly but I am not sure at this point if we can wait around to find out if the market turns.”
