The provincial Liberal government's recent 15-per-cent tax on property purchased by foreign buyers in the Metro Vancouver area is an "oversimplified" solution to a complex issue that likely won't impact Whistler, says one local realtor.
Pat Kelly, president of the Whistler Real Estate Company Limited, said the government seems to think that one way of providing more affordable housing for Metro Vancouver is to take non-residents out of the marketplace.
"(But) there's always going to be a conflict because the investor can always pay more," he said, adding that the Liberals' decision to impose the tax — which took effect on Aug. 2 — is a very safe move because it does not put the burden on taxpayers. Prices for detached single-family homes in Vancouver have increased about 30 per cent over the past year.
Foreign owners must pay an additional 15-per-cent in the newly modified property-transfer tax. If a foreign buyer purchases a Vancouver home for $2 million, they now must pay an additional $300,000 because of the tax.
Resort Municipality of Whistler Mayor Nancy Wilhelm-Morden said for her part it remains to be seen if this tax will affect the Whistler market — which could come about if foreign buyers set their sights on Whistler, Squamish, Victoria, or anywhere else the tax is not in effect.
Wilhelm-Morden said there's been speculation whether the community should push for inclusion in the new provincial government legislation, but the nature of the Whistler buyer dictates different usage here.
"We have so many foreign owners and have had for decades. People, for the most part, are coming here and using their properties," she said, adding that it's a different market in the Lower Mainland where houses sit empty.
Kelly explained there would always be a conflict between buyers who look at real estate as part of their investment portfolio and those who simply need a place to live. And for Whistler, those are two very different markets because the investor is not looking for the same property as a local.
"They don't buy the kind of product that could be considered, in my mind, appropriate for full-time living, for the most part," he said. "(The investor) is buying condos in the village, they're buying high-end luxury real estate. They really don't compete against locals for housing because what they're interested in buying has to be managed, or they're spending a lot of money and buying luxury places that are also managed. Generally, they're not out competing with a local for an A-frame in Alpine."
The other difference between those attracted to the Vancouver market and Whistler is the unique relationship buyers have with this resort.
"We have almost no absentee owners," Kelly said. "All of our non-residents come to Whistler every year. They come to enjoy the resort. They are Whistler-lovers. They come from other parts of the world and they can't be here full time. But they are no different than the second homeowner from Vancouver who is coming on a regular basis. Three-quarters of the village was built based on that assumption. They are coming for three weeks in the winter, and three weeks in the summer."
Kelly said investors can look to other centres, such as Victoria, or Kelowna, if they are put off by the Metro Vancouver tax.
"We've had an affordability problem for locals in Whistler as long as I've been in Whistler," he said. "And that problem has always been there because the value of our community has always been driven by people outside of the community, not by income levels in the community. So that is primarily coming out of Vancouver.
Fellow Whistler realtor Ann Chiasson said in an email that the tax likely won't affect the resort community.
"We are not a primary market for foreign buyers like Vancouver and Toronto. We could see some new buyers but I think people buying in Whistler are buying in Whistler for lifestyle," she wrote.
The tax may be challenged under the terms of the North American Free Trade Agreement (NAFTA). In a July 29 story in the Financial Post, Toronto lawyer Barry Appleton wrote that the tax is a "violation of our trade treaties," which prevent governments from undertaking discriminatory policies that would, in effect, "punish foreigners while exempting locals."
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