Much to Vancouverite’s surprise, the B.C. government introduced the foreign-buyers tax with little warning last summer in an effort to halt the rising real-estate prices which saw July prices for detached homes soar an astounding 38 per cent in a single year.
The law was passed in late July and came into effect softly after, sparking a frenzy of activity before the tax kicked in. Many foreigners were caught off guard by this move and some had to pay up to an additional $100,000 and sometimes even more on their home after the government announced the new tax.
However, the 15-per-cent tax is facing a class-action lawsuit that it’s discriminatory against people from Asia. It claims that it violates equality rights by making arbitrary distinction between those who are citizens and permanent residents of Canada and those who aren’t.
The lawsuit was originally filed in September and says the tax unfairly assumes foreign nationals are wealthier than Canadians and argues it violates dozens of international treaties guaranteeing equal treatment to non-Canadian citizens and permanent residents. Earlier this year, Premier Christy Clark tweaked the rules around the law exempting anyone living in B.C. on a work permit and who pays taxes in the province.
The lawsuit was originally filed by B.C. resident Jing Li, a Chinese national, who moved to Canada in 2013 to attend university. Li is the lead plaintiff, arguing the foreign tax added $83,850 to the cost of a $559,000 Langley, B.C., townhouse, which she agreed to purchase about a week before the tax was introduced in August 2016.
Nobody knows exactly what’s going to happen with the Foreign Buyers’ Tax. Whether the lawsuit is successful or the B.C. government scrap the tax on their own volition, there is another way to own a home without worrying about the Foreign Buyers tax. With Rent To Own, you can put a smaller down payment and start building equity immediately.
In fact, for both foreigners and locals alike who feel like they can never be able to afford a home in one of the most beautiful parts in the world, Rent To Own offers hope.
It’s a financing option that gives you time to build equity until you can get financing from a bank. You sign a 5-year real estate purchase sales agreement with a 5-year close to buy the house at a fixed rate. You only have to put 5% down payment towards the future price of the home instead of the 20-30% most banks require.
You make regular monthly payments like a normal lease, but with Rent To Own part of your monthly payment goes towards your future purchase. On top of that you earn equity from the very start of the agreement which has increased on average in North Vancouver increased by 6%.
If you’re looking to defer paying an extra 15 % or just want an easier way of getting into the market, then Rent To Own might be the right solution for you. Call us at 1 (877) 546-2739 or email us today.