Whistler’s Appeal to International Investors
Incredible natural beauty, world class amenities and proximity to Vancouver all come into play when acknowledging Whistler’s appeal to international visitors.
Through the years, many international visitors have chosen to invest in Whistler real estate. Sometimes these property purchases have been driven by a desire for financial returns – be they short-term rental income, long-term rental income or capital appreciation.
However, most international investors I’ve worked with have been guided by the desire for lifestyle returns. That’s not to say that they haven’t appreciated the financial returns – it’s just not been the main motivation for their investment.
With their principal residences often situated in major cities around the globe, these international investors were quick to recognize Whistler’s hidden value in the early days and were not put off by property prices that most Canadians outside of Vancouver and Toronto shook their heads at. The desire they had to spend quality family time in Whistler and the decision to make a sizable investment to secure this lifestyle return has certainly been a significant driver of the Whistler real estate market through the years.
Today we find ourselves well into a full year of a worldwide pandemic, and with international borders closed, the Whistler market is seeing unprecedented sales activity and escalating prices driven almost entirely by Canadian buyers.
It will be interesting to see what happens when the borders reopen and international visitors return to Whistler.
Considerations When Buying Whistler Property as an International Investor
When considering a property purchase in Whistler, the first question most international investors have is: “Are there any barriers or Canadian laws in place that make investing here difficult”?
The short answer is no.
You should think about the following though:
No Speculation Tax, No Vacant Home Tax
Unlike Vancouver where non-resident buyers are hit with a 20% speculation tax at purchase, Whistler has no such tax. Vancouver also has an annual vacant home tax of 3% of the assessed property value and once again Whistler does not.
Property Transfer Tax
The one provincial property tax that does apply to Whistler is the B.C. Property Transfer Tax. The
Property Transfer Tax is calculated as follows:
1) 1% of the fair market value (usually purchase price) up to including $200,000.
2) 2% of the fair market value greater than $200,000 up to including $2M.
3) 3% of the fair market value greater than $2M.
Annual Property Taxes
Non-resident property owners (like all property owners) must pay an annual property assessment tax bill. The actual amount is determined by applying a mill rate, determined by each community, to the annual property tax assessment amount. The yearly assessments are sent out to property owners in January and taxes are due no later than July 1st of the same year. Interesting fact is that the assessed property value is determined the previous year by July 1st.
Good & Services Tax
Our Canadian Good & Services Tax (GST) of 5% applies when purchasing a new home and can apply when purchasing a home that has been operated as a business, i.e. short-term rental business. If the purchaser changes the so-called business use to residential use, it still triggers GST and this is typically paid by the purchaser. Used residential property purchases with no history of short-term rentals are not subject to GST.
Canadian Tax Return – Only If Rented/A Business
A non-resident owner of a property which is not rented is not required to file an annual income tax return until the property is sold.
Tax Return at Sale
If the property is sold for a gain, the non-resident must file an income tax return to claim a refund of taxes withheld. Any gain on the sale of a property will be subject to tax in Canada. The tax is levied in two stages. First, there is the withholding tax at time of disposition and then a final calculation of tax as reported in the T1 personal income tax return which is due after year end. This applies to non-resident property owners.
Income Generating Properties Have Different Taxes + Rules
The tax rules and regulations for non-residents operating revenue producing properties are more complex and too detailed for the purposes of this blog entry. For more detailed information on Canadian taxation, the team of accountants at Manning Elliott are an excellent resource.
In Conclusion – Buying Whistler Property as an International Investor
In the course of my 26 year career as a Whistler Real Estate Investment Advisor, I’ve worked with many international investors facilitating the purchase & sale process.
It’s one of the many aspects of my business that I enjoy immensely and I’m happy to say that most of my international clients have become great friends as well.
COVID-related travel restrictions do present their challenges at the moment for non-resident buyers and sellers. However, working with high tech tools like 3-D virtual tours & real time video streams combined with the guidance of an experienced and highly ethical agent means it is totally possible to invest in the Whistler lifestyle, no matter where you are.
Imagine: the borders reopen, we’ll be travelling again and your investment is waiting for you.
Let me put my experience to work for you.