Last month, BC’s provincial government announced the official budget for 2018 – a highly anticipated release. Some of the key points include changes to MSP and reducing the cost of childcare, but what you might have missed are the big changes coming to real estate taxation. How will this effect Kelowna’s market? Here are three major changes that those of us in the Okanagan should be aware of.

Foreign Buyers Beware

The controversial foreign buyers’ tax has seen a makeover in the new budget and, while it won’t affect Canadian citizens, buyers from abroad will see a five percent taxation increase from 15% to 20%. Although the previous the foreign buyers’ tax was focused on was the Greater Vancouver Area and lower mainland, Kelowna will now be included as an area where the tax is applicable – a big change for both the province and our local market.

New Speculation Tax

A new levy, known as the speculation tax, is being introduced in the 2018 budget to help bolster the rental and real estate markets in some of the province’s most popular areas. This tax will be applied to homes whose owners neither live in the property nor rent it out, and will apply to areas such as the Central Okanagan, Metro Vancouver, and Victoria. The NDP’s have said that the desired outcome behind this tax is that it will push down the price of real estate in the province.

Higher Price Tag, Higher Payments

The last major change announced for the housing market will only affect those homes that are valued at $3 million or higher. For homes sold at this price tag, transfer tax will now be set at 5%, while previously it was only 3%. In addition, school taxes will be increased on these homes as well.

Since these changes are all very new (only applied as of February 1st), we can only speculate on what their long-term effects will be. Regardless, it’s always best to have all the information when you’re ready to dive into the housing market. Scroll down to sign up for my newsletter and stay up to date on all the latest real estate news!