Unintended consequences of the new real estate tax may be taking its toll. Details on business after the news.
Stories are starting to come to light of the immediate reaction as the new foreign buyers’ real estate tax starts to bite into the market.
Realty companies and real estate boards alike are reporting the first anecdotal evidence of deals falling through as foreign buyers forfeit deposits of signed deals rather than pay the 15% new tax.
That was to be expected, but local buyers are now also reportedly taking a step back from making deals, hoping that the market will begin to soften.
Uncertainty in the market, be it stocks or real estate, can cast a worse pall than a market given a definitive direction, either up or down.
And uncertainty it is in Greater Vancouver, as those with completed deals before the August 2nd deadline now out of the way, and countless others just walking away from signed deals, prepared to give up a small deposit compared to the new just-levied tax.
A good portion of the losers are people who scraped together every cent to get into the market and are now faced with a 15 per cent tax according to one source, “that could add up to $150,000 they don’t have, so they will have to walk away from the transaction and lose their deposit or beg, borrow and steal the money from someone else.”
One wonders if the government even considered the unintended consequence of their rush to implement the tax for political reasons.