Home buyer demand depends on property type

Attached and apartment homes are in demand across Metro Vancouver* while detached home buyers are facing less competition today.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,818 in January 2018, a 19.4 per cent increase from the 1,523 sales recorded in January 2017, and a 9.8 per cent decrease compared to December 2017 when 2,016 homes sold.

Last month’s sales were 7.1 per cent above the 10-year January sales average. By property type, detached sales were down 24.8 per cent from the 10-year January average, attached sales increased 14.3 per cent and apartment sales were up 31.6 per cent over the same period.

“Demand remains elevated and listings scarce in the attached and apartment markets across Metro Vancouver,” Jill Oudil, REBGV president said. “Buyers in the detached market are facing less competition and have much more selection to choose. For detached home sellers to be successful, it’s important to set prices that reflect today’s market trends.” Continue reading

Tax changes could affect your business

January 25, 2018 – Government Relations

On July 18, 2017, federal finance minister Bill Morneau released a consultation paper, Tax Planning Using Private Corporations and announced proposed changes to three areas of tax planning used by private corporations:

  • income sprinkling;
  • holding passive investments in a private corporation; and
  • converting income into capital gains.

This was part of a review of tax measures including loopholes and tax planning strategies that he claimed give unfair advantages to corporations, their shareholders and wealthy family members.

On October 3, 2017, after extensive input from small businesses, trade and professional associations and individuals, Morneau announced his government would not proceed with changes regarding converting income into capital gains.

The government would still move forward with changes to income sprinkling and holding passive investments in a private corporation.

Income sprinkling restrictions

On December 13, Minister Morneau announced he would simplify measures to restrict income sprinkling through changes to the Income Tax Act for the 2018 tax year.

Exemptions include:

  • business owners aged 65 or older. Sprinkling with a spouse will be permitted in the same way pension income can be split between spouses;
  • adults aged 18+ if they work at least 20 hours per week in the year or during the previous five years; and
  • adults aged 25+ if they own at least 10 per cent of the shares of a small business.

Anyone not qualifying under these categories, can choose to pass a “reasonableness test” based on labor and capital contributions and risk assumed.

Personal real estate corporations and owners of private corporations have until the end of 2018 to adjust to the proposed exclusion for significant shareholdings‎. The CRA has prepared guidance on how to do this.

Holding passive investments in a private corporation

Corporate income is based on lower rates than personal income, giving businesses more money to invest to grow their business – including holding passive investments inside the corporations.

Legislation closes fixed-term rental loophole

January 25, 2018 – Government Relations

Legislation to protect renters against large rent increases at the end of a fixed-term lease is now law.

BC Municipal Affairs and Housing Minister Selina Robinson, introduced Bill 16 the Tenancy Statutes Amendment Act in October to amend the Residential Tenancy Regulation (s.13.1).

The goal is to prevent landlords from circumventing rent controls by having tenants sign a fixed term lease with a vacate clause, for example a one-year lease with specified start and end dates.

At the end of the term some landlords required tenants to sign a new lease at a higher rent than allowed on a month-to-month basis, which allows those landlords to raise annual rents at a rate of two per cent plus inflation.

Maximum rent increase

Now the maximum rental increase for all tenancies is two per cent plus inflation and applies retroactively to existing tenancy agreements.

Vacate clauses

The rental housing industry agrees with the legislation, noting there are exceptions, according to David Hutniak, CEO of Landlord BC, an association representing BC landlords.

“Tenancies that are currently in place and have a vacate clause will revert to month-to-month at the end of the fixed term, unless at the time of signing the agreement the landlord had intended in good faith to use the rental unit for the purpose set out in the regulations,” said Hutniak.

If a landlord intends on moving into the rental unit or having a close family member move into the rental unit at the end of the fixed term, they must inform their tenant that they must vacate at the end of the fixed term.

Hutniak advises landlords to sign a Mutual Agreement to End Tenancy form with the tenant at that time. If the tenant doesn’t vacate or informs the landlord that they intend to not vacate, the landlord then applies for an order of possession through the Residential Tenancy Branch’s Dispute Resolution process.

If you have questions or comments, please contact Harriet Permut at

Empty Homes Tax declaration form due

January 25, 2018 – Government Relations

The City of Vancouver brought in an Empty Homes Tax, also known as the Vacancy Tax, on January 1, 2017 under Vacancy Tax By-law No. 11674.

The tax came into effect January 1, 2018.

All Vancouver home owners have now received a property status declaration from the city and are required to submit a declaration.

The declaration helps the city determine if a property is subject to the Empty Homes Tax.

Home owners must return their declaration by February 2, 2018. These instructions outline how to submit a declaration.

If the city determines a property is empty, the owner must pay a tax of one per cent of the property’s assessed taxable value. 

The Empty Homes Tax doesn’t apply to principal residences or homes rented for at least six months of the year.

The city reports that 55 per cent of home owners have already submitted declarations.

Questions? Contact Sophie Harrhy, City of Vancouver at 604.829.4312 Ext. 88637 or


A Guide to Vancouver’s Empty Homes Tax, July 14, 2017

Form deadline

February 2, 2018

Rate hike increases mortgage costs

January 25, 2018 – Government Relations

On January 17, 2018, the Bank of Canada (BOC) raised its overnight interest rate 25 basis points to 1.25 per cent citing the growing economy and rising inflationary trends.

In anticipation of this increase, the six major banks raised their posted five-year, fixed-rate mortgage rates to 5.14 per cent from 4.99 per cent.

How will this affect mortgage holders?

All home buyers, even those who don’t require mortgage insurance must qualify for their mortgage at a higher rate as of January 1, 2018.

Under the new rules, the minimum qualifying rate for mortgages is:

  • the greater of the Bank of Canada’s five-year benchmark rate; or
  • the contractual mortgage rate plus two per cent.

BC Real Estate Association’s Chief Economist Cameron Muir believes this increase signals a much tighter lending environment for home buyers and owners in 2018.

“While today’s rate increase was widely anticipated, it did come earlier in the year than previously expected and likely signals further rate increases to come in 2018. Canadian mortgage rates have already moved higher in anticipation of Bank of Canada tightening, which means a much tighter borrowing environment in 2018, particularly given newly implemented mortgage qualifying rules for low-ratio buyers,” Muir said.


Bank of Canada, Policy interest rate

REBGV Stats Package as at December 31, 2017

Statistics Canada, 2016 Census, Census Profile for Vancouver CMA

Mortgage rates, taxes and Landlords

The Bank of Canada raised interest rates last week, leading to an increase in mortgage rates. How will this affect homebuyers’ monthly payments?

Learn more.

A reminder that the City of Vancouver Empty Homes Tax requires all home owners to submit a property status declaration by February 2, 2018.

Here’s what you need to know.

Provincial legislation protecting renters against large rent increases at the end of a fixed-term lease is now in effect. Learn why this legislation came about and what it means for landlords.

Read here.

Federally, Finance Minister Bill Morneau has brought in tax changes which could affect your business, including new rules about income sprinkling and passive investments in a private corporation.

Learn more.