Students and other renters in Vancouver are able to live in luxury thanks to Vancouver’s tax on vacant homes.
Rather than pay the Empty Homes Tax, some owners of high-end homes are renting out their properties according to a report by Bloomberg, especially as sales have weakened.
With wealthy Chinese owners pulling back and home prices impacted by the mortgage stress test, a growing number of owners are turning to the rental market where the vacancy rate has been near-zero.
It’s easy to see why owners may be tempted to wait for a rebound before selling their luxury homes.
One real estate agent, Lisa Sun, told Bloomberg that things are tough. She is trying to sell a Vancouver mansion for a wealthy Chinese-Canadian owner but the listing price of $10.9 million isn’t attracting offers.
With some hopeful buyers offering as little as $6.2 million for the 8,343 square foot home with a wine cellar, home theatre, and pool, Sun is considering a reduction in the asking price to $8.3 million.
“I’ve been through only the peak, never the low,” she said, noting that she doesn’t expect a rebound for Chinese interest in the luxury market due to curbs on Chinese capital by Beijing.
A report from CBRE reveals that Asian investments in Vancouver homes fell to around $350 million in 2018, down from more than a billion in 2017 and 2016.
If Sun can’t sell, the home would attract Empty Homes Tax of $140,000 annually in extra tax.