Key changes you should know about the Okanagan real estate market for February 2018
Latest figures from the British Columbia Real Estate Association (BCREA) show that the real estate market across the province has experienced a real boost in the last year.
The Multiple Listing Service® (MLS®) recorded 5,306 residential sales in January, 18.3% more than January 2017.
Property prices were also on average up by 16.2% to an average of $721,477 and the total sales volume was even 37.4% higher at $3.83 billion.
However, budget changes have been introduced to try and temper house prices and could affect the Okanagan market.
A Property Transfer Tax is being increased. This is the tax imposed when buying a property in British Columbia. It's based on the market value of the land and any improvements made at the time of registration. Current rates are 1% on land up to the value of $200,000 of the fair value market rate, 2% on anything valued over $200,000 and up to $2,000,000 and 3% on anything valued greater than that. From 21 February 2018, this amount will increase by 2% on land with a fair market value more than $3,000,000. Anything valued at $3,750,000 would incur a $15,000 charge meaning the total tax payable is $105,500.
There will also be a raise on Foreign Buyer Tax, applied to foreign buyers, which includes individuals, corporations and taxable trustees. The tax will be raised from 15% to 20% and will apply to Metro Vancouver, Victoria and Nanaimo land districts on Vancouver Island, the Fraser Valley, Kelowna and West Kelowna.
A new Speculation Tax has also been introduced targeting homeowners not living in their homes. The tax will be at rates starting at 0.5% of the homes value from 2018. This will increase to 2% the following year. This tax won't apply however, if you live in your home, pay income tax in British Columbia or are renting it out on a long-term basis.
The changes should affect Kelowna and West Kelowna but won't extend to North Okanagan, South Okanagan or Shuswap just yet.
The changes are intended to bring property prices down, which can be good news if you're looking to buy a property in British Columbia, including Kelowna.
The changes could be a positive move in an upward market in any case in that it will be accessible to a broader set of buyers. Keep looking at 2Percent Realty Group's listings for great properties at affordable prices in the area. You'll save even further with us as 2Percent will only charge you 2% commission.
Contact one of our team now.