Arran McLellan
Pemberton Holmes
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What you need to know regarding the NEW Property Flipping Tax & B.C. Property Assessment Appeals~

Greetings, 

I hope you are well. This email is a reminder regarding the new B.C. Home  Flipping Tax. 

B.C. Home Flipping Tax
- Jan 1, 2025 implementation period – Retroactive
- Housing unit, zoned Residential, or assignments - Owned for less than 730 days (2 years) or less, even if purchased before Jan 1, 2025
- BC Home Flipping Tax Return – provincial – needs to be filed and paid within 90 days of sale – filed even if no profit or exemption applies – DO NOT need to file if property owned more than 729 days or you qualify for an exemption that exempts filing or are a developer with pre-sales


- Exemptions:
- Life Circumstances – death, inheritance, serious illness or disability, relocations (with conditions), change in household membership(related person moving in, birth), Breakdown of relationship, Involuntary Employment Termination, Threat to personal safety, Bankruptcy, Housing Unit Destroyed, Expropriation, Foreclosure, Builders who construct housing units, Vacant land, Substantial Renovations, Increase of Habitable Area by at least 100%, Demo and new build, Renovation to add an additional housing unit (bsmt suite, carriage house)
- Residential & Presale contracts – flipping tax applies to net taxable income from the sale
- Primary Residence Reduction – up to $20,000 off of your taxable income if you owed a home for more than 365 consecutive days but less than 730 days and you lived in the home. 

Click here to review Bill 15 - RESIDENTIAL PROPERTY (SHORT-TERM HOLDING) PROFIT TAX

Click this link to watch a helpful video tutorial~ 



Property Tax Assessment Appeal Process~  


An appeal of your B.C. Assessment Valuation must be done by January 31, 2025. The Property Assessment Review Panel will review the appeal as the first gatekeeper. If the ruling is unsatisfactory, you can appeal the ruling to the Property Assessment Appeal Board by April 30, 2025. You must file a complaint with the Review Panel BEFORE filing an appeal to the Appeal Board.

Click here to review B.C. Assessment's Appeal Page for further details. 




As always, don't hesitate to contact me with any questions about the aforesaid indexed items or the current real estate market conditions.

Best, 

Arran 





Are you looking to buy or sell a home?
Please call me at 250-884-3980, and I can give you the expert guidance and help you need to make informed decisions and achieve your housing goals.  

First-Time Home Buyer?? 

Call me at 250-884-3980 to chat about the ZERO-DOWN FINANCING OPPORTUNITY!

Some exceptions apply 

Earn up to $1,000 if you refer someone who is looking for real estate services~ 

Click here to visit my website.

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B.C. Housing Update 2025~

The B.C. Housing market has experienced two years of tepid sales and higher-than-average listing inventory. The past few months have seen a rebound in market activity with increasing sales. Over the upcoming year, sales are forecasted to increase due to the interplay of the following factors: lower interest rates, extended amortization periods (30 Years) for new construction and First-Time Home Buyers, and higher mortgage insurance caps (up to $1,500,000 from $1,000,000).

If you or someone you know wants to enter the real estate market, contact me at 250.884.3980.

In health, 

Arran 

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~Housing Market Update~ 

Property Flipping Tax 2024~

The Property Flipping Tax is a sliding-scale tax, with a 20% tax on those properties that are resold within a one-year window and a lesser tax on any sale within a two-year time frame.  The provincial government aims to levy this tax on property flippers who purchase and sell a property within two years. The tax targets property flippers who are solely looking to make a profit. According to the Bank of Canada, approximately 3.1% of homes in Vancouver and Victoria are sold within one year. If you consider the charts above, courtesy of BCREA Economics, the participation of homes sold in B.C. throughout a one-year time frame is, on average, between 2.5-3.1%. The stats do not delineate between those in the business of flipping properties and those with valid reasons for a resell within one to two years.

There are many reasons families decide to move within a two-year time frame, and the majority are for purposes that are exemptions to the flipping tax. This begs the following question: What are exemptions to this "flipping tax"? Exemptions that could apply include a death in the family, an addition to the family, employment relocations, martial breakdown, default or bankruptcy, illness or disability, destruction of the property, expropriation of the property, and more. Please visit the government of B.C.'s website: https://www2.gov.bc.ca/gov/content/taxes/income-taxes/bc-home-flipping-tax



What are the effects of the flipping tax? The BCREA Market Intelligence Report notes, "In other jurisdictions where similar rules exist, such as the United States, Australia, New Zealand, and Singapore, the effect of such taxes on prices remains ambiguous; the evidence is mixed and inconclusive, and if an effect exists, it is minor."

What can be said about the impact on the market on sellers who hold off listing their homes? The impacts remain to be seen. However, rational thought would indicate that if sellers are deferring their listings for a one—to two-year time frame, this would result in a reduction of listings. This would lead to a resultant price increase for the limited inventory as there would be even fewer homes, albeit not a huge amount, for purchasers to compete for.

Although the government feels that taxing the small percentage of homeowners who truly "flip" their properties is a great way to gain additional tax revenue, the focus should remain on supply-side measures and programs that create the much-needed housing. Those "flippers" who are taking risks with their capital to build additional housing units for rental stock are not the ones who should bear the brunt of the government's short-sighted policies. On the other hand, those owners who are speculative with their purchases, looking to make a quick buck, and artificially inflating the market pricing should bear the tax.






FIRST TIME HOME BUYER?? Call me at 250-884-3980 to chat about the ZERO-DOWN FINANCING OPPORTUNITY!
*Some exceptions apply* 


Looking to find out what your home is worth?? Call me, and we can discuss a market evaluation. 

Click here to visit my website.

#ProvincialFlippingTax#Realestate#Commonsenserealestate#Victoriarealestatenews#updatesvictoria

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 February 21, a 20% Foreign Buyer Tax will be levied on purchases in the Capital Region - according to the BCREA this tax will have an immediate impact on transactions underway, but there are some transitional rules, outlined below.



Transitional Rules
If the property is located in the Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan or Nanaimo Regional District and the property transfer is registered on or after February 21, 2018, there are two instances where you don't have to pay the additional property transfer tax:      
1. You don't have to pay the additional property transfer tax if the registration occurs before or on May 18, 2018 and the property transfer is subject to a written agreement dated on or before February 20, 2018. Otherwise you will have to pay the additional property transfer tax.
 
Note: If the written agreement is assigned to a foreign entity or taxable trustee on or after February 21, 2018, the additional property transfer tax must be paid.
  
2.     You don't have to pay the additional property transfer tax and your property can be registered at any time if:
    • The property transfer is subject to a court order dated on or before February 20, 2018
    • The property transfer is subject to an Order Nisi of Foreclosure dated on or before February 20, 2018
    • The property transfer is subject to a separation agreement which was signed on or before February 20, 2018
    • The property transfer is from the personal representative of a deceased's estate to the beneficiary and the death of the deceased occurred on or before February 20, 2018
    • The property transfer is to a surviving joint tenant when the death of the deceased occurred on or before February 20, 2018
You can find the above info and more on the government's website. 


Also live tomorrow is an increased Property Transfer Tax for properties over $3 million. The Property Transfer Tax will increase to 5 per cent for properties over $3 million.

The Minister of Finance also announced that a speculation tax will roll out in Fall 2018. 

 

 

Click Here to view some Hot Listings

 

How to Benefit from the Hot Property Market 
   
   
The Housing Market in Victoria has continued to be extremely hot with both Sellers and Buyers reaping the rewards.  The current inventory is lower than average and coupled with low interest rates, the current housing market will continue to remain hot. 

If you are planning to sell or buy within the next three months, give me a call and I will ensure you realize the best possible result. 

My Best,
Arran
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Housing Market Facing Headwinds Despite Strong Economy 
BCREA 2017 Fourth Quarter Housing Forecast

Vancouver, BC – November 28, 2017. The British Columbia Real Estate Association (BCREA) released its 2017 Fourth Quarter Housing Forecast today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 10.4 per cent to 91,700 units in 2018, after an expected 8.8 per cent decrease this year. A record 112,209 unit sales were recorded in 2016. The ten-year average for MLS® residential sales in BC is 84,700 units. Strong economic and demographic fundamentals are supporting elevated housing demand. However, a number of factors are expected to temper home sales in the province next year.

“Housing demand across the province will face increasing headwinds in 2018," said Cameron Muir, BCREA Chief Economist."A rising interest rate environment combined with more stringent mortgage stress tests will reduce household purchasing power and erode housing affordability." The 5-year qualifying rate is forecast to rise 20 basis points to 5.15 per cent by Q4 2018, and the new qualification rules for conventional mortgages will erode purchasing power by up to 20 per cent. "Given the rapid rise in home prices over the past few years, the effect of these factors will likely be magnified."

The supply of homes for sale is now trending at or near decade lows in most BC regions. The imbalance between supply and demand has been largely responsible for rapidly rising home prices. The combination of weakening consumer demand and a surge in new home completions next year is expected to induce more balanced market conditions, producing less upward pressure on home prices. The average MLS® residential price in the province is forecast to increase 3.1 per cent to $712,300 this year, and a further 4.6 per cent to $745,300 in 2018.

-30-

 

If you are a Seller and looking to discuss the market value for your property, send me an email or call me at 250.884.3980 and we can sort.

 

If you are a Buyer looking at the upcoming changes, as of January 1, 2018 with the mortgage stress testing and the resulting implication on affordability, call me and we can discuss.

 

 

www.YourLuckyIrishAgent.com

 

 

Courtsey;

For more information, please contact: 

Cameron Muir
Chief Economist
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BC Government Limits Choices for Real Estate Consumers 

Vancouver, BC – September 7, 2017. The BC Government's announcement to ban the practice of limited dual agency means that consumers can no longer choose the REALTORS® they want.

"Every day, REALTORS® help their clients understand real estate transactions, so they can make informed decisions," said BC Real Estate Association (BCREA) President Jim Stewart."Over my nearly 25-year career as a REALTOR®, many long-standing clients have developed trust with me, and now my clients have no choice but to start from the beginning and build new relationships. Trust is a crucial part of what is often the largest financial transaction in people's lives."

Limited dual agency occurs when a real estate trading services licensee acts in a limited capacity for both the buyer and the seller. The practice is especially common and important in small BC communities, in which few licensees practice, and so BCREA is pleased to see a proposed exemption for those situations. However, limited dual agency is also used in cases where REALTORS® have established relationships with buyers and sellers, in commercial transactions and in situations where REALTORS® specialize in particular property types.

"Rather than working with licensees they don't know, we're concerned people may decide to complete real estate transactions without representation," said BCREA CEO Robert Laing."That goes against the consumer protection mandate of the Superintendent of Real Estate and the Real Estate Council of BC."

At the end of June 2016, the Independent Advisory Group (IAG) made 28 recommendations aimed at improving the real estate licensing system and the protection of consumers. For more than a year, BCREA has urged the BC Government, Superintendent of Real Estate and Real Estate Council of BC to carefully examine the IAG recommendation to eliminate limited dual agency. The vast majority of BC's more than 22,000 licensees are diligent, ethical and trustworthy, and so BCREA has recommended that limited dual agency should be allowed through the express consent of consumers.

"We know consumers value the right to choose their own representatives," said Mr. Laing. "Over the next few days, BCREA will examine the draft rule changes carefully and consult with the 11 real estate boards to determine our next steps."

- 30 -

Quick facts:

In response to a July 2017 survey:

  • 67% of BC real estate consumers said it's very important or somewhat important that they be able to work with the REALTOR® of their choice,
  • More than four-in-five BC homeowners (84%) used the services of a REALTOR® for their last property transaction.
  • 88% of BC homeowners who worked with a REALTOR® say they are very or somewhat satisfied with their services.

BCREA is the professional association for over 22,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province's real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.

To demonstrate the profession's commitment to improving Quality of Lifein BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.

For more information, please contact:

Damian Stathonikos
Director of Communications and Public Affairs
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BCRealEstateAssn's profile photo



BCREA ECONOMICS NOW

Canadian Housing Starts - September 11, 2017

Canadian housing starts increased 1 per cent in August to 223,232 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts was also higher at 219,447 units SAAR.

New home construction in BC fell 21 per cent on a monthly basis to a still robust 35,773 units SAAR but were up 4 per cent on a year-over-year basis.  Single detached starts fell 7 per cent month-over-month and were 3 per cent lower year-over-year. Multiple unit starts declined 26 per cent on a monthly basis but were up 7 per cent year-over-year.

Looking at census metropolitan areas (CMA) in BC: 

  • Total starts in the Vancouver CMA fell 13 per cent year-over-year in August. Both single and multiple unit starts declined, falling by 2 and 16 per cent respectively on a year-over-year basis.

  • In the Victoria CMA market, housing starts followed up a surge in new units in July with a further 22 per cent year-over-year increase in August. Multiple unit starts were once again the main source of growth, rising 46 per cent year-over-year.

  • New home construction in the Kelowna CMA more than doubled compared to August 2016 due to a number of multiple unit projects breaking ground. Many of those units are new rental units, which year to date have totaled 1,366 starts. That is the highest 8 month total for construction of rental units in Kelowna's history.
     
  • Housing starts in the Abbotsford-Mission CMA continued a torrid pace of growth in August, rising 93 per cent year-over-year, boosted by strong growth in both single and multiple unit starts.

For more information, please contact: 

Cameron Muir Brendon Ogmundson
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September 6, 2017 - Bank of Canada Interest Rate Announcement 
Overnight Leading Rate
The Bank of Canada announced this morning that it is raising its target for the overnight rate by 25 basis points to 1 per cent. In the press release accompanying the decision, the Bank noted that recent economic data have been stronger than expected but growth is forecast to moderate in the second half of the year.  On inflation, the Bank cited some excess capacity and temporary price shocks as factors keeping inflation below its 2 per cent target. Importantly, the Bank mentioned it will be paying particular attention to the evolution of the economy's potential growth rate (meaning the economy's estimated long-run growth rate) as well as to labour market conditions and the economy's sensitivity to higher interest rates.

The Bank has now removed the stimulus it injected into the Canadian economy in 2015 to offset the impact of falling oil prices. With the economy expanding at a 3.5 per cent rate over the past year, that stimulus is clearly no longer required. The Bank seems to be more concerned about the potential for higher future inflation due to an over-heated economy than on the actual very low inflation observed in recent months. That leaves the door open for further rate increases should economic growth remain robust. 
How to Benefit from the Hot Property Market 
The Housing Market in Victoria has been extremely hot for the past eighteen months with both Sellers and Buyers reaping the rewards.  The current inventory is lower than average and coupled with low interest rates, the current housing market will continue to remain hot. 

If you are planning to sell or buy within the next three months, give me a call and I will ensure you realize the best result possible. 

My Best,
Arran
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BC Government Limits Choices for Real Estate Consumers 

Vancouver, BC – September 7, 2017. The BC Government's announcement to ban the practice of limited dual agency means that consumers can no longer choose the REALTORS® they want.

"Every day, REALTORS® help their clients understand real estate transactions, so they can make informed decisions," said BC Real Estate Association (BCREA) President Jim Stewart."Over my nearly 25-year career as a REALTOR®, many long-standing clients have developed trust with me, and now my clients have no choice but to start from the beginning and build new relationships. Trust is a crucial part of what is often the largest financial transaction in people's lives."

Limited dual agency occurs when a real estate trading services licensee acts in a limited capacity for both the buyer and the seller. The practice is especially common and important in small BC communities, in which few licensees practice, and so BCREA is pleased to see a proposed exemption for those situations. However, limited dual agency is also used in cases where REALTORS® have established relationships with buyers and sellers, in commercial transactions and in situations where REALTORS® specialize in particular property types.

"Rather than working with licensees they don't know, we're concerned people may decide to complete real estate transactions without representation," said BCREA CEO Robert Laing."That goes against the consumer protection mandate of the Superintendent of Real Estate and the Real Estate Council of BC."

At the end of June 2016, the Independent Advisory Group (IAG) made 28 recommendations aimed at improving the real estate licensing system and the protection of consumers. For more than a year, BCREA has urged the BC Government, Superintendent of Real Estate and Real Estate Council of BC to carefully examine the IAG recommendation to eliminate limited dual agency. The vast majority of BC's more than 22,000 licensees are diligent, ethical and trustworthy, and so BCREA has recommended that limited dual agency should be allowed through the express consent of consumers.

"We know consumers value the right to choose their own representatives," said Mr. Laing. "Over the next few days, BCREA will examine the draft rule changes carefully and consult with the 11 real estate boards to determine our next steps."

- 30 -

Quick facts:

In response to a July 2017 survey:

  • 67% of BC real estate consumers said it's very important or somewhat important that they be able to work with the REALTOR® of their choice,
  • More than four-in-five BC homeowners (84%) used the services of a REALTOR® for their last property transaction.
  • 88% of BC homeowners who worked with a REALTOR® say they are very or somewhat satisfied with their services.

BCREA is the professional association for over 22,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province's real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.

To demonstrate the profession's commitment to improving Quality of Lifein BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.

For more information, please contact:

Damian Stathonikos

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BCREA ECONOMICS NOW

Bank of Canada Interest Rate Decision - July 12, 2017



The Bank of Canada announced this morning that it is raising its target for the overnight rate by 25 basis points to 0.75 per cent. In the press release accompanying the decision, the Bank noted that Canada's economy has been robust and a significant amount of economic slack has been absorbed. While inflation data has been soft, the Bank expects that this is temporary and that inflation will return to its 2 per cent target by mid-2018.

The motivation for today's rate increase seems primarily to be that the Bank feels that the stimulus it injected into the Canadian economy in 2015 through two rate cuts is no longer required given a recent trend of strong economic and employment growth. If that is the case, a further 25 basis point increase before the end of the year will likely follow.  After that, the pace of rate increases relies heavily on the trend in Canadian inflation, which to date has been well below the Bank's 2 per cent target. If that trend does not reverse by early next year, the Bank may decide to stop at a 1 per cent overnight rate until higher inflation emerges. 

As bond markets reprice rate expectations, Canadian mortgage rates have returned to levels observed at the beginning of the year. We expect that mortgage rates will rise further in the second half of 2017, finishing near 3 per cent for a five-year fixed rate. 

For more information, please contact: 

Cameron Muir Brendon Ogmundson
Chief Economist Economist
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BCREA ECONOMICS NOW

Canadian Inflation - June 23, 2017


Image result for inflation


Canadian inflation, as measured by the Consumer Price Index (CPI), registered just 1.3 per cent in the 12 months to May. That is down from 1.6 per cent in April.   The Bank of Canada's new core measure of inflation, called CPI-common,  was also up 1.3 per cent for the fourth consecutive month.   In BC, provincial consumer price inflation was 1.9 per cent in the 12 months to May.

Given the Bank of Canada's recent hawkish turn on monetary policy, the trend in inflation will be even more important in coming months. So far, there is little in the inflation numbers to justify an interest rate increase, though the very strong economic growth over the past year could put some upward pressure on prices soon.

For more information, please contact: 

Cameron Muir Brendon Ogmundson
Chief Economist Economist
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Categories:   Cost of Buying a Home | Housing Costs | New home
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