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BC Waterfront prices and buying in the US

By Howard Sanders • January 21st, 2011

I was reading an article today regarding the recent drop in price of waterfront properties in BC, and the increase in Canadian buyers going south to take advantage of the ‘bargains’ in the devastated U.S. housing market.  It’s something I hear occasionally from my buyers, that this or that island property is overpriced because “I can buy a similar property in Arizona/Florida/ Louisiana etc. for a fraction of that….”

Unless you are a real estate investor looking for cheap property to hold, rent and then sell in a potential future up-market, this is a puzzling response; particularly regarding Arizona which is a landlocked desert state with dubious racial and gun laws.  Owning foreign recreational property, and being subject to foreign tax laws, can be both complicated and confusing.  For example, if you spend more than 183 days during a calendar year in the US you will have to file a US Tax return (this is calculated with percentages of time taken from the 2 preceding years, so it’s not that straightforward).  As a Canadian owner, if you rent out your U.S. vacation home the rental income you receive is subject to a flat 30% tax in the U.S. before any deductions for expenses incurred in earning this income.

Also, it puzzles me that someone looking to invest in Canada’s Pacific Northwest would then completely change their mind and follow the money south. Each to their own, I suppose, but to me buying recreational property is as much about lifestyle as about price. Living in the US is not the same as living in Canada, and Phoenix, for example, bears absolutely no comparison to Vancouver Island or the Gulf Islands.

However, as I said earlier, each to their own, so to help those buyers considering a purchase south of the border here are some good resources that may help in your decision:

http://www.canadianlawsite.ca/vacationing-us.htm

http://www.grasmick.com/snowbird.htm#Renting

http://www.canuckabroad.com/forums/canadian-resident-how-to-buy-a-home-in-usa-vt2836.html

And what about those prices for BC waterfront falling? Well that’s true, and part of the problem is buyers going south to buy property they would normally be buying in the Okanagan and the Kootenays. However, the type of property available in the Gulf Islands and Vancouver Island is not readily available in the US, so while down, our prices are holding better than the rest of the province.

See the original  article here: http://tinyurl.com/4qkylmz

 

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