A new report from Christie’s International lists Victoria as the second hottest luxury real estate market in the world.
When you think of a luxury home you probably picture a house on the ocean, or a large estate, but with the Victoria real estate market booming, the face of luxury is changing.
One townhouse in Oak Bay Village is about to go on the market for just over a million dollars.
“If this was a single family home we’d be talking about a much different number especially in today’s market,” said Jordy Harris, a realtor with Newport Realty.
Home prices, especially in desirable neighbourhoods like this one, have gone up.
“In the last three years has gone up by about 40 to 50 per cent,” said Ara Balabanian, President of the Victoria Real Estate Board.
And that may be why a new report from Christie’s International lists Victoria as the second hottest luxury market in the world, behind Toronto, and just ahead of San Francisco.
“Luxury can be something that is just over a million, and I say that with some respect, but our prices have risen to that point,” said Jack Petrie, Managing Partner of Newport Realty, a Christie’s International real estate firm.
While 2016 saw a big increase in homes that sold for a million or over, only a handful went above three million.
“We had approximately 16 homes in 2015, we had 20 homes sell in 2016,” said Balabanian.
The report lists offshore buyers, put off by Vancouver’s new foreign buyers tax, as one of the driving factors for the luxury sales boom, but local realtors aren’t seeing it.
“It’s not as if there was a sudden floodgate where all those buyers, foreign buyers, looking to buy in Vancouver, came over here, it just didn’t happen like that,” said Harris.
“It’s still a small component of the marketplace, it’s somewhere around 5 per cent,” said Balabanian.
They say the largest segment of home buyers remains locals, followed by those from elsewhere in Canada.
But if prices continue to soar, “luxury” may need to be re-defined.
The article was originally posted on CHEK News, May 10, 2017. Written by April Lawrence.
Yes, good value real estate is possible in Vancouver.
In April 2017, in their annual Where to Buy Now coverage MoneySense.caselected their top Greater Vancouver neighbourhoods to buy real estate to see the best return on investment.
What’s a buyer to do? The best way is to buy based on solid fundamentals. In real estate this means finding good-value neighbourhoods that offer a good chance of continued momentum in the future. That’s not easy in a hot market, but this year’s Where to Buy Vancouver list shows it is possible. Read the rest of the article here.
We’ve rounded up homes for sale in each of these Where to Buy neighbourhoods to make it easy for you.
The top 25 Greater Vancouver neighbourhoods for Buyers, according to MoneySense are:
To view all active listings currently for sale in one of these areas simply click the neighbourhood links above or call our head office at 1-877-278-3888 to be matched to an expert real estate agent in the area of your choosing.
At least one major Vancouver real estate firm believes that the election results mean that housing policy in the province will remain uncertain for the foreseeable future.
“The one thing you want the government to provide is certainty in policy,” said Dan Scarrow, vice-president of Macdonald Realty, which has almost 1,000 staff and agents throughout B.C. “This election result means that housing policy in the province will be up for negotiation between the three major parties.”
Scarrow said many believe that government holds the solution to issues like affordable housing. He said the reality, however, is that governments’ power, particularly the power of provincial governments that do not control either immigration or interest rate policies, is limited because there are so many forces that impact the real estate market.
“People have already forgotten that when the 15-per-cent foreign buyer tax came in, it was a shock to the system,” he said. “At the time, even the most vocal critics of foreign investment in Vancouver acknowledged that this was a far bigger move than anyone could have anticipated. And now, less than a year later, it has had no discernible impact on demand.”
Scarrow points to examples all over the world of cities struggling with affordability. “The one commonality seems to be that governments are incapable of stopping demand. Draconian policies to restrict demand have been tried in Hong Kong, Singapore, Sydney and many first-tier cities in China with limited to no effect. Vancouver can now be added to this list,” he said.
In fact, some argue that local governments often make things worse by artificially restricting supply. The 13th Annual Demographia International Housing Affordability Survey: 2017, which ranked Vancouver as the world’s third-least affordable market, states: “The affordability of housing is overwhelmingly a function of just one thing: the extent to which governments place artificial restrictions on the supply of residential land.”
Scarrow said that affordable housing is a complex problem for which there is no easy solution. “Everyone’s definition of affordability is different,” he says. “So if no one’s defined the end goal, we just end up building a highway to nowhere.”
Ultimately, regardless of what policies are eventually introduced, the issue of affordability will likely remain. Says Scarrow: “I expect to see this as a major election issue in 2021. And 2025.”
The article was originally printed in The Province newspaper on May 11th, 2017 and posted on vancouversun.com May 12, 2017. Written by Michael Bernard.
Tax season is upon us. Canadian tax residents must file tax returns for 2016 income with the Canada Revenue Agency (CRA) before the end of April 2017. Who is a Canadian tax resident? In principle, anyone for whom Canada is a home base is regarded as a tax resident.
In reporting income, Canadian tax residents also have to report any capital gains earned during the year, HOWEVER, unlike other income (such as income from employment, interest payments, rent, etc.) only ½ of capital gains are treated as income. In effect, therefore, the tax rate on capital gains is only ½ the tax rate on regular income. Moreover, there are a few types of capital gain that are entirely exempt from taxation. For most taxpayers the most important exemption from capital gains tax is for the capital gain earned on the sale of a family home known as the “principal residence exemption”.
Some of the key issues surrounding the principal residence exemption as follows:
Q: Does a taxpayer have to report the capital gain on the sale of a principal residence?
Yes, the new policy requires the gain to be reported when tax returns are filed with CRA. This is a new requirement. The gain is only reportable for the taxation year in which the property is sold. If the property has, throughout the period it was owned by the taxpayer, been a principal residence then no tax is payable.
Q: Who can claim the exemption?
The exemption is only available to Canadian tax residents who must declare world-wide income and capital gains when filing tax returns.
Q: What type of property can be a principal residence?
Only “capital property” can be a principal residence. Property bought to “flip” is not “capital property”; it is inventory in a trading business where the profit from the sale of such property is treated as ordinary income, not even a capital gain. 100% of such gains are taxable. Only properties that were “ordinarily inhabited” by the taxpayer are eligible for the exemption.
Q: Can different family members each own a “principal residence”?
There is only one residence that can be claimed by a family unit as a principal residence. Of course, adult children living apart from their parents are regarded as having their own family unit and are thereby entitled to claim an exemption for their own principal residence.
Q: Are there penalties for failing to report?
If the sale is not reported in the tax return then CRA can, without any time limitation, audit the taxpayer at any time in the future. Moreover, taxpayers who have failed to designate the home as their principal residence could be subject to a late designation penalty of up to $8,000. It is expected that the new policy will give CRA auditors new audit leads and give rise to many more homeowner audits and re-assessments in the future.
In summary, anyone who sold their principal residences in in 2016 would be well-advised to report the sale and any associated capital gains in their tax returns for the 2016 fiscal year. Any questions concerning this new policy should be directed to experienced tax advisors.
Written by Peter Scarrow, former immigration lawyer, currently is the Director of Asian Business at Macdonald Real Estate Group.
Vision and hard work – that sums up how Lynn Hsu grew a real estate company from one office to 20 offices and 1,000-plus employees, making it Western Canada’s largest full-service brokerage firm
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As seen in… Profiles of Excellence 2017
Originally from Taiwan, Hsu immigrated to Canada in the late 1970s – alone, with no family or friends, no job prospects and speaking little English. Today, she has turned Macdonald Realty into Western Canada’s largest full-service brokerage firm.
From the moment Hsu purchased that single boutique residential firm, she had a vision.
“The real estate industry has two distinct businesses – one creation, the other servicing. On the servicing side, almost all the companies in BC were a single-purpose company, i.e. residential or commercial brokerage, property management or project marketing firms,” says Hsu. “I wanted to create a company that could provide our clients all-encompassing real estate solutions under one roof –from guiding a home buyer through the biggest investment of their lives, helping an investor manage and add value to their properties, to assembling ground intelligence to assist developers to create the right products for the marketplace.”
Today, the company’s interests encompass residential sales, commercial sales and leasing, property management, strata management, development and project management, project marketing and mortgage brokering and lending. It now includes the Macdonald Commercial and Macdonald Realty Platinum Project Marketing divisions.
Dan Scarrow, vice-president, says it’s Hsu’s ability to hire the right people that also helped propel her to the top of the industry. “Lynn has always understood how important it is to empower employees. She is a leader who inspires people through a shared vision and she has created an environment where people feel valued and fulfilled,” says Scarrow. “Her strongest point is that she has never wavered from her commitment to serve and protect our customers.”
Hsu believes that a business model based on a fundamental principle of upholding the highest standard of excellence, coupled with a strong conviction that every problem has a creative solution, would allow Macdonald Realty to grow organically. “When you have the belief and knowledge that you are doing your best to adhere to your core values, problems, rather than deflating you, energize you to action,” adds Hsu.
Hsu went on to explain: “Professionalism and integrity mean a great deal to me and my entire team. They are our company’s core values.”
The original announcement that work permit holders would be exempt from the 15% additional property transfer tax was made on January 29, 2017.
On March 17, Premier Christy Clark finally introduced the details of the new exemption to the 15% property transfer tax applied to certain “foreign nationals” who purchase residential properties in the Greater Vancouver Regional District. As we expected the devil is in the details. There are a number of categories of work permit holders. Just as we expected, it turns out that not all holders of work permits will be treated equally. Most work permit holders will still have to pay the 15% tax.
The exemption from the tax will only apply to Provincial Nominees under the B.C. provincial nominee program (“PNP”). They have to be “nominated” by B.C. so that other holders of work permits such as international students, executive transferees, or individuals nominated by other provinces will not qualify for the exemption. Moreover:
The exemption only applies to provincial nominees who treat the property as a principal residence;
The exemption may be claimed only once. It the provincial nominee buys another GVRD property he must pay the 15% tax;
Evidence of provincial nominee status has to be provided at the time the documents are filed at the Land Title Office.
REFUNDS OF THE 15% TAX FOR CERTAIN INDIVIDUALS
The new rules also provide that the following buyers who have already paid the tax will be entitled to refunds:
Foreign nationals who held B.C. PNP certificates or were confirmed as provincial nominees and purchased GVRD residential property between August 2, 2016, and March 17, 2017;
Individuals who became permanent residents or Canadian citizens within one year of the date the property transfer was registered in the Land Title Office
Refunds for permanent residents and citizens can only be claimed:
in respect of only one property;
where the property has been used as a principal residence;
where the owner moved into the residence within 92 days of property registration; and
continued to live in the property for one full year after the date the property transfer was registered.
Clearly most work permit holders are still subject to the 15% tax. It seems that the exemptions are designed primarily to accommodate the PNP holders working in B.C.’s growing high technology industry, the fear being that the high cost of housing may be an impediment to economic growth in this critically important sector.
Meanwhile, work permit “status” issues can be somewhat complex. Foreign national buyers holding work permits and their realtor advisors who are uncertain about whether an exemption would apply should consider consulting their immigration and conveyancing lawyers before entering into a binding agreement to purchase GVRD residential property.
Written by Peter Scarrow, former immigration lawyer, currently is the Director of Asian Business at Macdonald Real Estate Group.
