According to the Wall Street Journal, Seattle should be expecting to see an influx of Chinese home buyers as a result of British Columbia’s newly imposed tax.
In August, British Columbia, the province in which Vancouver is located, imposed a 15% tax on foreign investment in the city. This tax applies to anyone purchasing a home or condo in the metro city of Vancouver who is not a citizen or permanent resident of Canada. The closet large metropolitan city to Vancouver is Seattle and with Seattle’s market looking strong, experts are anticipating that some of those affected by this tax will be moving their purchases and money down to Seattle.
Along with the 15% tax, the city of Vancouver also imposed a separate tax of 1% of the assessed value on properties that are left vacant. These new taxes have caused quite a shift in the web searches in China for real estate in Vancouver vs Seattle. Juwai.com, an online real-estate portal that targets Chinese home seekers, is reporting that web searches for Vancouver properties fell 37% while web searches for Seattle properties increased by 125% year over year.
There will be no quantitative way to know how or whether these taxes in Vancouver will actually affect real estate sales to Chinese investors here in Seattle but it is something to be aware of.
What does this mean for Seattle? For one, an influx of buyers into an already inventory starved market will continue to put upward pressure on prices and keep the competitive seller’s market going strong. Two, we might start to see our own city developing laws and new taxes to prevent what happened in Vancouver from happening here, which is rapid price increases pricing out local residents along with a plethora of vacant properties.