Two top recreational markets close to Metro Vancouver are exempt from B.C.’s controversial 15% foreign buyer tax that covers the metro regional district. And that could be good news for the Sunshine Coast and Squamish, which have both seen a spike in offshore buyers in the past few years.
The two housing markets are included in the Real Estate Board of Greater Vancouver but are outside the Metro Vancouver boundaries subject to the foreign tax.
The Sunshine Coast has seen an increase in offshore investment in the past two years. Foreign nationals have bought the Sechelt Golf and Country Club, a 43-acre island near Pender Harbour for $2.5 million and at least two local resorts, along with residential property.
The July benchmark price for a Sunshine Coast detached house was $467,00, compared with $1.5 million in Greater Vancouver. However, Gibsons real estate agent Kenan MacKenzie said he has seen a shift in the market that goes beyond people from Metro Vancouver looking for more affordable homes.
“We have Chinese investors on the Sunshine Coast who have bought into business(es) and are buying homes to live here,” he said. “You’ve got Americans potentially coming back into the marketplace.”
Near Squamish, China-backed investors paid $30.5 million to buy 460 acres at south Britannia Beach in 2012, where Taicheng Development Corp. proposes to build a large residential community. Taicheng’s current plan, filed in July with the Squamish-Lillooet Regional District, is to build between 698 and 1,000 units of housing, one of the district’s largest residential projects.
The experience of vendors on Bowen Island, which falls under the tax that came into effect August 2, gives an indication of the disruption it caused.
As the tax deadline loomed, Bowen Island realtors Dee and Frazer Elliott rushed to finalize a deal on a house that had sold months earlier but had a previously scheduled closing date in mid-August.
A Singapore client was buying a relatively modest house and hoping to send his son to school on Bowen Island. At stake for the buyer was losing a $34,000 deposit or paying $114,000 in new taxes.
The Elliotts confirmed “everything fell into place” and the deal closed without adding the new 15% tax on to the sale price.
“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,” Dee Elliott said.