Kelowna Homeowners Consider Home Renovations Over Selling Due to Tax
KELOWNA, British Columbia, Oct. 31, 2018 /PRNewswire-PRWeb/ -- A Kelowna renovation contractor says he is seeing an increase in home renovations as well as the building of legal suites and house additions since the provincial government proposed changes to the BC Speculation Tax earlier this year.
The revised tax affects those who own secondary properties in certain BC municipalities, including those in Kelowna and West Kelowna, where the government reports that vacancy rates are low.
According to Norm Kneller, Co-owner and operator of Rafter 4K Contracting Ltd., a number of his clients are choosing to renovate their homes instead of selling due to the proposed speculation tax and its effect on the real estate market.
In an article in the Vancouver Sun, all properties that are affected by the Speculation Tax will pay a rate of 0.5 percent in 2018, while in 2019, B.C. residents who are subject to the tax will pay a rate of 0.5 percent, while Canadians from outside B.C. who have properties in the province that are subject to the tax will pay a 1 percent tax rate, and non-Canadians will continue to be hit with the previously-announced 2 percent rate.
"Previously the market was very active because of many home purchases by out-of-province buyers. Since then, the government's proposed Speculation Tax has thrown a wrench in the works," says Kneller. "The market for prime lifestyle properties and secondary residences has dropped because paying up to 2 percent on a $3 million plus property is outrageous."
While the Speculation Tax is having an effect on new housing developments, such as the Goat's Peak development in West Kelowna, Kneller says one of his clients who lives on the west side of Okanagan Lake, an area popular for vacation homes that is being affected by the tax, has opted to extensively renovate their house instead of selling it.
"They now have a five-to-10-year plan to stay in their home until the market hopefully comes back," says Kneller, adding another one of his clients is looking at moving out of Kelowna. "They are looking at selling their secondary home in Kelowna and buying in Lake Country, where the Speculation Tax is not in effect."
Another trend that Kneller has noticed is the increased demand in home additions and legal suites. Instead of secondary properties, some clients are looking to add a legal suite or addition to their home so that they can sell a portion of their property to a family member, says Kneller.
"This is an interesting twist from someone who adds a legal suite for the extra income, as the property stays within the family. Some clients have decided not to sell their home in order to recoup their retirement investment, but instead, are selling a portion of their property to their immediate family. It is a way for parents to help their grown children get into the housing market. They are essentially getting two homes in one, as the house addition cost is less expensive than purchasing a starter home in Kelowna," says Kneller.
While the housing market in Kelowna remains in flux, Kneller says business is still strong with homeowners looking for Kelowna construction companies such as his to conduct general renovations, updates, as well as kitchen and bathroom remodelling.
"They are looking to increase the value and stay in their home, as renovating is generally much more affordable than purchasing a new home, " he says.
About Rafter 4 K Contracting: With more than 25 years of general contracting experience, Rafter 4K Contracting is the Kelowna construction company of choice for residential and commercial projects. From home renovations to installing pools in Kelowna to project management, we ensure client satisfaction by delivering projects on time and on budget, while remaining focused on quality craftsmanship. Rafter 4K is highly experienced with bathroom renovations, kitchen renovations, home remodelling and house additions.
For more information, please contact:
Norm Kneller, Co-Owner
Rafter 4K Contracting Ltd.
Kelowna, BC
250-765-0856
info[at]rafter4k[dot]com
http://www.rafter4k.com
SOURCE Rafter 4K Contracting
