TORONTO: Real estate company Royal LePage is predicting British Columbia’s new speculation tax on out-of-province buyers will likely convince a wave of owners to sell their vacation properties, pushing down home prices.
The real estate company says it expects the average price of a recreational home in B.C. to reach $531,333 by the end of September, a 2.8 per cent drop from last year’s $546,444 average.
Royal LePage reached that conclusion by surveying 200 real estate advisors who specialize in recreational property between May 15 and June 1.
About 55 per cent of B.C. respondents said they think the tax will “weaken momentum” within the region and keep sales activity from reaching its “true potential,” while 40 per cent thought it would impact prices.
In 2019, under B.C.’s speculation regulations, foreign investors will be taxed 2 per cent in 2019, while Canadian citizens and permanent residents not living in B.C. will pay 1 per cent.
Royal LePage is predicting recreational property sales will fare much better nationally and is forecasting a 5.8 per cent increase in national vacation home prices, bringing the average up to $467,764 from $442,239 previously.