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Canada bans foreign home buyers for two years

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Re: Canada bans foreign home buyers for two years

#41

Post by doliveira »

eru wrote: post #24

This is really, really stupid. It reeks of economic illiteracy. If you think foreign investor cause harm, just estimate how much harm it is, and tax them accordingly. Why would you ban them? Taxing is almost always more economically efficient than banning. You can even pay out (part of) the tax take to the people you think are harmed. (In general, a land value tax for everyone would be a good idea. But if political r…

Would taxing do anything in this specific case? Foreign investors are already willing to pay millions in a single home just for it to lay empty, from what I read in this thread. Why would some fixed (even if progressive) tax on top of that change the demand?

Re: Canada bans foreign home buyers for two years

#43

Post by jnmandal »

Having your housing stock bought up as holdings by nonresidents is not great. It hollows out the communities by having choice housing sit empty and it raises the cost of living for everyone who is actually there.

I'm interested to see how this plays out. It seems pretty heavy handed. Zoning denser housing or placing limited restrictions on square footage may proved smarter in the long term. That said, two years is pretty short term in this context.

Re: Canada bans foreign home buyers for two years

#44

Post by breakfastduck »

xyst wrote: post #29
j7ake wrote: post #8

I would have thought that the pandemic and travel restrictions would have effectively “banned foreigners from buying homes” for 2 years. If home prices haven’t fallen during pandemic, then the reason why prices are high is not because of foreigners. The government is trying to point to a scapegoat rather than trying to get to the root cause.

This. Root cause is crappy city planning and design; and emphasis on single family housing development. Many cities across North America are designed with urban sprawl and car centric travel in mind. Pedestrian and alternative forms of transportation are a second class citizen despite the ability to move people more efficiently than cars will ever do. Don’t get me wrong. Cars have their in place in society but their…

This is literally nothing to do with it. It's to do with wealthy foreigners buying properties and leaving them empty basically to use as an 'asset' rather than a home.

London has this problem more than anywhere. Blocks full of purchased and empty while locals can't get a sniff.

Re: Canada bans foreign home buyers for two years

#46

Post by bryanlarsen »

tici_88 wrote: post #34

Foreigners, especially the billionaire type, can and have been setting up shell corporations through which to purchase Canadian real estate. The proposed measure will do nothing to stop this practice. The measures proposed by the Canadian government are likely just political posturing and indented to "pull the wool over the eyes" of Canadian voters because the housing bubble/crisis has reached epic proportions and ev…

We don't have implementation of the bill yet, just the budget line. Obviously the government knows about this problem, so if they take measures to prevent it, then we'll know they are actually serious.

Note that a corporation is not consequence free. An owner occupied home pays no tax on capital gains. A corporation owned one is double taxed.

Re: Canada bans foreign home buyers for two years

#47

Post by Dylan16807 »

it_citizen wrote: post #31
eru wrote: post #24

This is really, really stupid. It reeks of economic illiteracy. If you think foreign investor cause harm, just estimate how much harm it is, and tax them accordingly. Why would you ban them? Taxing is almost always more economically efficient than banning. You can even pay out (part of) the tax take to the people you think are harmed. (In general, a land value tax for everyone would be a good idea. But if political r…

I am not super familiar with real estate markets. Has the empty house tax helped in any way? Even if it is not the best solution, is there any huge downside to that ban?

Are there any empty house taxes that charge a significant amount of money? 5% would barely get you into the same range as price growth.

Re: Canada bans foreign home buyers for two years

#48

Post by eps »

j7ake wrote: post #8

I would have thought that the pandemic and travel restrictions would have effectively “banned foreigners from buying homes” for 2 years. If home prices haven’t fallen during pandemic, then the reason why prices are high is not because of foreigners. The government is trying to point to a scapegoat rather than trying to get to the root cause.

Being from Vancouver and having witnessed with my own eyes mainland Chinese investors in suits on one-day visits driving around in tour buses and buying everything in sight - yeah, this clusterfuck is absolutely rooted in a torrent of Chinese money being parked in Canada.

The ban won't do much, obviously, but the cause is the foreign investments. 100%.

Re: Canada bans foreign home buyers for two years

#49

Post by iefbr14 »

hotpotamus wrote: post #10
iefbr14 wrote: post #4

So why don't they build more homes?

My question for you (and I think about this myself) is how much would someone need to pay you for you to go into home construction?

If I could magically subtract some 50 years from my age I would certainly consider that :)

Re: Canada bans foreign home buyers for two years

#50

Post by pastacacioepepe »

eru wrote: post #24

This is really, really stupid. It reeks of economic illiteracy. If you think foreign investor cause harm, just estimate how much harm it is, and tax them accordingly. Why would you ban them? Taxing is almost always more economically efficient than banning. You can even pay out (part of) the tax take to the people you think are harmed. (In general, a land value tax for everyone would be a good idea. But if political r…

Explain how would you tax them effectively then, since they are foreign.

Every time I talk about taxing the rich, I'm stormed by people calling me economically illitterate and telling me it's impossible as the rich will always find a loophole.

So if you think they can find loopholes on the ban, why couldn't they find loopholes on new taxes? They do already and very effectively.

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