24 Feb Market Notes: More listings and new BC non-resident taxes
The market finally picked up this week and I am starting to see more quality inventory. I expect February sales numbers to be down when compared to last year, but prices in the City of Toronto up month-over-month. The uptick in prices will mainly be correlated with a lack of inventory. I still recommend being wise and ready for the right opportunity. It appears the competitive nature of the market will continue on strong demand. I will keep you appraised of any reversal of momentum heading into the spring market.
This week British Colombia announced further regulations to curb real estate speculators in the province. They raised the non-resident tax to 20% from 15% and introduced a new tax on out of province homeowners – 0.5 per cent in 2018, and then 2 per cent in the following years – which homeowners who do not pay income tax in the province will be charged annually. This new tax is based on the appraised value of the home. For example: If you own a $500,000 condo in Vancouver that you are AirBnb’ing while living in Ontario, you will pay an additional $10,000/year on your tax bill. It does not apply if the property is a long term rental and only affects cities where speculation has soared.
Why is this important for Toronto? It may not be long before the Ontario government implements similar regulations, especially if the real estate market bounces back quicker then expected. Already, economists are predicting we may see an effect as money leaves Vancouver and lands in Toronto. This is definetly an issue I will be watching closely.