Earlier this month, the new Foreign Buyers Tax went into effect in the Metro Vancouver area. Most non-Canadians will now need to pay a 15% tax the purchase of real estate in Vancouver and its surrounding communities – but not in Whistler!
There was a bit of craziness in the week leading up to the implementation of this new tax, which was announced with only a few days’ notice, and some foreign buyers were suddenly – and unexpectedly – on the hook for hundreds of thousands of dollars. Now, it’s a matter of waiting to see if the tax will achieve its desired effect, which is to cool the market and increase affordability for residents.
What About Whistler?
The Squamish Chief recently published an article titled, “What About Squamish?” Like Whistler, Squamish is not affected by Foreign Buyers Tax – not directly, at least – and the article examines what effects the new tax will have on communities that lie outside its jurisdiction. It’s well worth a read.
While the majority of Whistler property owners hail from British Columbia or elsewhere in Canada, we do see some international purchasers in the market. Foreign buyers in Whistler typically have different motivations than those who invest in Vancouver real estate. Whistler’s non-resident purchasers are generally driven to purchase because they love the local community – the snowy winters for skiing, the hot summer days for mountain biking – and they want to have a permanent home base for their Whistler vacations. Some foreign buyers (and some local buyers, for that matter) consider their property to be an investment, generating regular cash flow from short-term or long-term rentals and hoping to see an increase in market value when it comes time to sell. But in my experience, few foreign buyers in Whistler are picking up property solely as a safe haven for their cash, leaving it vacant year-round.
Yes, housing affordability for locals remains a challenge in Whistler, but that is more a question of limited supply than of foreign buyers driving up property values in excess. As such, it makes sense that Whistler was excluded from the Foreign Buyers Tax.
So what does this all mean for Whistler homeowners and prospective purchasers?
Truthfully, it’s hard to say.
There is a good chance that this will have minimal impact on the local market. The Whistler real estate market has always been distinct from Vancouver’s market, so changes in Vancouver may have little effect here in Whistler. Unlike Squamish, Whistler isn’t typically a viable bet for those looking to commute to Vancouver – the “drive until you qualify” concept outlined in the Squamish Chief article doesn’t really apply here.
Some have speculated that the new tax will entice foreign buyers to look into investing elsewhere in Canada – places where they won’t have to pay the tax, like Whistler. Perhaps we will see an increase in queries from international purchasers, given our relatively close proximity to Vancouver. Time will tell.
There’s always a chance that the boundaries of the Foreign Buyer Tax will expand to include communities such as Squamish and Whistler. If so, this would drive up costs significantly for our foreign purchasers who enjoy having a presence in Whistler. If this happens and foreign buyers deem Whistler properties to be too expensive to be worthwhile, would the market as a whole take a hit? Maybe – but probably not by much. Remember what I said earlier: foreign buyers make up a relatively small percentage of Whistler homeowners and purchasers. If they left the market, we would feel it – but the market certainly wouldn’t be devastated.
If you’d like to chat about the Foreign Buyers Tax, please do not hesitate to contact me to find out more!