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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

#401

Post by rockbruno »

fennecfoxen wrote: post #144
libertine wrote: post #62

Earlier quoted context omitted.

This is one of those things that a proper tax structure would do wonders - those who hoard housing should get a kick from a exponential tax. Like, what value are those corporations bringing to people, to the market, and to a country by hoarding houses other than controlling the renting market for some areas? How is that a good thing?

They are translating between a lump sum and an income stream. They are making a six-figure asset available for the low four figures a month, without someone needing to bring six figures of money, or five to six figures of down payment and closing costs and five times as much debt. If the six figure asset actually falls 50% in value, the tenant is not stuck and does not lose a penny. In short, they’re offering homes t…

This explanation hides the actual problem in a way that almost feels like gaslighting. Yes, their ability to buy homes allows people who don't have money to live in them.

...except that their greediness of wanting to own everything is precisely what made houses explode in price in first place.

Re: Canada bans foreign home buyers for two years

#402

Post by FerociousTimes »

mig39 wrote: post #395
FerociousTimes wrote: post #274

Earlier quoted context omitted.

Yes, this is a political move to appeal to the electorate for window dressing and not based on merits or practical and well-thought considerations. "Hey, we banned those darned foreigners just for you, can we get some love now at the ballot box? xoxo"

If it's for political reasons, then why only two years? Voters won't be going to the ballot box for another 4 years or so.

It can be extended for more years, it could be the result of a political compromise.

“If you like laws and sausages, you should never watch either one being made.”

Re: Canada bans foreign home buyers for two years

#403

Post by alberth »

pards wrote: post #98

I'm a homeowner in Toronto and I don't think this will help. They've eliminated a small number of buyers from the market but have added other incentives like a first home buyers tax credit that will only fuel the fire - Australia tried this with tragic results. >> working with provinces and territories to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding. Blind…

> "IMHO blind bidding is an unethical practice"

When you're applying to a new job, do you feel it's ok for the hiring company to ask you what exactly you currently make so that they can offer you $1.00 more than what you currently today? If not, how is that not "unethical"? (Also note, in the US at least - you can't ask someone what they currently earn).

I just don't understand why it's unethical.

Maybe the seller way under estimated the value of their home, why shouldn't they be allowed to sell it at the highest price?

EDIT: why the downvote? If you don't agree - why not reply so we can have a healthy dialogue.

Re: Canada bans foreign home buyers for two years

#404

Post by trylfthsk »

la6472 wrote: post #386
Pet_Ant wrote: post #367

Earlier quoted context omitted.

Sorry, but if we want to address climate change and protect the environment, then we need to do this without sprawling outwards.

Nothing is better than sprawling outwards. Most of the white collar jobs can be done remotely , so commute is not needed. Most of groceries and other stuff can be delivered. A truck doing 100 deliveries is surely less traffic than everyone going to the supermarkets. And most importantly with sprawling outwards citizens can enjoy the outdoors and take care of their health. And even more importantly high density of pop…

Service availability decreases with population density, and relying on subsidized last mile delivery for the economic elite is not a sustainable model for an entire society. The road network alone is a funding quagmire, to say nothing of hiding the infrastructure burdens of servicing sprawl into the eldritch horror that is the municipal bond market.

Re: Canada bans foreign home buyers for two years

#405

Post by chucksta »

pembrook wrote: post #282
justaman wrote: post #236

Earlier quoted context omitted.

2%. But how much of that 2% has been in the last 5 years? I heard it was up to 1/3rd of all properties sold.

Canadian MLS says 600,000 properties sold each year. Over 5 years that'd be roughly 3,000,000 homes. 1/3rd of that would be 1 million homes sold to foreign investors. There's only 1 million people globally (including Canadians) with a net worth over $10 million. That means every single one of them would have bought a Canadian home in the last 5 years. I mean Canada is nice and all, but does that seem plausible?

seems very plausible individuals or small groups are buying multiples, especially if the purpose is to store or move money.

Re: Canada bans foreign home buyers for two years

#406

Post by tomrod »

Aunche wrote: post #354
tomrod wrote: post #322

Earlier quoted context omitted.

> Why should I, a small time REIT holder pay more proportionately in property taxes than a celebrity in a Beverly Hills mansion, or even my landlord who only rents a few million-dollae units for that matter? To decrease the return on holding property indefinitely, which prevents renters from building equity to the benefit of small-time REIT holders. The outcome of this is an increase in home ownership which has a hos…

What's better for the housing market: someone who buys a $10 million home for themselves, or someone who buys 10, $1 million dollar apartments and rents them out? If anything, the former should be paying a higher property tax because they're constraining the supply buyer and renter markets. >Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism . Yes, I largely agree with Georgism, but I don't think…

I don't think the pocketbooks of REIT owners justify keeping the status quo housing market. Commercial and industrial REITs can do fine with 10 properties. Residential REITs perhaps shouldn't exist, as residences typically aren't directly economically productive.

Business and investment models can adjust; management companies would fill the investment gap for REITs. So rather than direct ownership, shareholders can instead invest in publicly traded property management firms -- arguably what a REIT should do anyhow.

With fewer units, landlords have more incentive to keep properties in working order to keep up liquidity should they choose to sell. This helps offset the tax incentive to let properties go to ruin.

I don't follow your assertion that increasing taxes on larger ownerships would result in rich people buying the biggest property they could possibly afford. People do that anyway?

Re: Canada bans foreign home buyers for two years

#407

Post by jimbob45 »

pards wrote: post #98

I'm a homeowner in Toronto and I don't think this will help. They've eliminated a small number of buyers from the market but have added other incentives like a first home buyers tax credit that will only fuel the fire - Australia tried this with tragic results. >> working with provinces and territories to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding. Blind…

>I don't think this will help

Can it hurt though? It's a massive conflict of interest to have foreigners buying your homes without any personal stake in your country. Shouldn't this be the default stance for all nations?

It's not like we haven't seen deleterious consequences already from California allowing the Chinese to buy up homes ad nauseum.

Re: Canada bans foreign home buyers for two years

#408

Post by Tiktaalik »

throw0101a wrote: post #112
krageon wrote: post #40

Earlier quoted context omitted.

It's not about the "economy", it's about people being able to buy a roof over their head. Foreign investors simply don't belong in that space at all.

> Foreign investors simply don't belong in that space at all. How much is this a problem? Further, this does not (IIRC) apply to folks to have permanent residence status or folks here on things like student visas. So how many never-set-foot-in-Canada people are buying properties?

Years ago, before BC brought in it's foreign buyer tax it was a problem. Local builders were literally opening up sales offices in Taiwan, Hong Kong and other major cities in Asia.

We know it was a significant issue because the government actually shared the data, and it showed some alarming trends.

What is remarkable here in contrast is that the Federal government hasn't shared any data at all. (Ironically when they were elected in 2015 they promised "evidence based decision making" ..haha)

Re: Canada bans foreign home buyers for two years

#409

Post by tomrod »

kogepathic wrote: post #360
franciscop wrote: post #175

Earlier quoted context omitted.

I've been thinking a lot about this, and I think to promote everyone's owning a house, and even small-size investments, but to avoid megacorps the ideal would be something like: 1 house - tax breaks 2 houses - same taxes as currently for 2 houses 3+ houses - incrementally more expensive with each extra house Also there's a really nice law in Spain, born for the wrong reasons, that makes you pay more taxes if the hous…

> 1 house - tax breaks Why should society be subsidizing home ownership more than they already do? The real estate market already discriminates against people who cannot afford a deposit (an increasing proportion of people, since house prices are increasing so rapidly), and the design of North American cities encourages urban spawl which is unsustainable with current property tax rates. [1] > and I think to promote e…

If you pay a mortgage and you expect the housing market to stay stable or increase, you are investing in an asset.

Rent is gone to the owner, in exchange for one more month/two weeks/year/whatever frequency the payment is paid to the owner.

The opportunity cost between a mortgage and rent is not dollar for dollar (euro for euro, or whatever).

Re: Canada bans foreign home buyers for two years

#410

Post by tomrod »

joejerryronnie wrote: post #348
tomrod wrote: post #61

Earlier quoted context omitted.

Triple or quadruple property taxes after the 10th purchased residence in the state. Encourage tax breaks through high density development of condos with coop property management firms.

This would simply drive rents up across the board. Unintended consequences are the primary result of punitive tax measures.

Would you mind walking through your analysis?
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