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Canada bans most foreigners from buying homes

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Re: Canada bans most foreigners from buying homes

#61

Post by JacobThreeThree »

refurb wrote: post #5
MarkusWandel wrote: post #3

So if you're the stereotypical rich foreigner who wants to invest in real estate here, what's the stop them from incorporating a company locally, and then having that own the house(s)? And that's just one workaround I can think of in the first 30 seconds. As with all well-intentioned simplistic schemes, this will hurt normal folks - immigrants who don't have their paperwork sorted out yet - and do absolutely nothing…

It's already covered in the law. Most provinces are requiring that "beneficial ownership" of any corporation is reported to the government. https://www.jdsupra.com/legalnews/british-columbia-finalizes... What is more likely is that some foreigner would use a relative in Canada, who has PR or citizenship, to buy the property on their behalf. But foreigners buying home in Canada was never that big of an issue. I think…

>it was mostly Canadians running amuck on cheap debt that ran home prices into the stratosphere

The root causes are thanks to the policies of the Bank of Canada and CMHC.

Re: Canada bans most foreigners from buying homes

#62

Post by sokoloff »

vlovich123 wrote: post #48
sokoloff wrote: post #35

Earlier quoted context omitted.

Housing cannot durably be both a good investment and remain affordable.

It’s a fine investment in a diversified portfolio because traditionally it was a hedge in both capital and monthly cash flow, and decoupled from other asset classes. It also offered freedom where you can make improvements to the land to increase the rate of growth. There were also non-monetary investments because your lifestyle choices had certain kinds of freedoms it offered (in exchange for giving up others) So it’…

Typically when we say that something is a “good investment”, we mean that it’s something that increases in value faster than inflation.

Conversely, for something to remain affordable over a long period of time, its price must grow no faster than inflation.

Re: Canada bans most foreigners from buying homes

#63

Post by robrenaud »

gruez wrote: post #56
kennend3 wrote: post #16

Earlier quoted context omitted.

Well, there are fines for helping bypass the laws. "The Act has a $10,000 fine for any non-Canadian or anyone who knowingly assists a non-Canadian and is convicted of violating the Act. If a court finds that a non-Canadian has done this, they may order the sale of the house." I would assume opening a numbered corp to own the house would fall under this category? Most of the "super-rich" owned houses in Canada are alr…

Only a $10k fine? On a 1 million dollar house that works out to 1%, and your house doesn't even get seized, it only gets sold so you keep all the appreciation that occurred during that time. Considering that transaction fees (eg. for the agent) are probably more than 1%, this doesn't seem like a huge impediment.

> the repayment of the non-Canadian of amounts not greater than the purchase price for the sale

The foreigner does not keep any appreciation.

https://www.bennettjones.com/Blogs-Section/New-Rules-for-For...

Re: Canada bans most foreigners from buying homes

#64

Post by drowsspa »

AbrahamParangi wrote: post #22

Of all the things that a person can own, land seems the least justified to me. There is a finite amount of it, you did not create it, you cannot destroy it, and essentially all ownership derives from conquest, in recent or ancient history.

Owning land makes a lot of sense, I'd say. What doesn't make much sense to me is subjecting it to so much speculation

Re: Canada bans most foreigners from buying homes

#65

Post by brailsafe »

garbagecoder wrote: post #12

A better title would be “absentee foreigners.” I think this is part of Airbnb blowback to some extent. Are these people really competing for even middle class housing? Seems weird to me. A few wealthy foreigners pipping millionaire Canadians for penthouses doesn’t really seem like a problem for normies. Am I understanding this wrong? Portugal is also de facto eliminating its “golden visa” which basically lets you be…

Middle class housing is a ridiculous investment vehicle in the primary few viable Canadian cities, and has provided wild returns to people who bought a few years ago, to the point where only the rich can really afford anything now. Even people who live in modest old 1 bedrooms that they bought a few years ago couldn't afford their own places if they needed to. It's not by any stretch exclusively wealthy foreigners influencing the market though, otherwise the government probably wouldn't be enacting any legislation that specifically targets them.

Re: Canada bans most foreigners from buying homes

#66

Post by asdff »

grecy wrote: post #40
hestefisk wrote: post #11

Good symbolic act, but as the fine article states, it’s unlikely to have material effect on housing affordability for the average person until supply is increased.

Improving something is a multi-step process that takes time. I'm happy they've taken a step in the right direction, an I'm hopeful they'll take more.

Its really not a step in the right direction. Imo its even a bit into the wrong direction because they are opting to sidestep the vastly easier step that would actually solve this problem for good: updating the zoning to keep up with job growth. Blaming foreign investors for today's home prices is like blaming the boogyman, because its zoning that explains everything about today's home prices and its the zoning creating a supply crisis that attracts investors in the first place (foreign and domestic lest we think this investor problem poofs into thin air with this).

Re: Canada bans most foreigners from buying homes

#67

Post by housingisntbiz »

dmix wrote: post #52
kennend3 wrote: post #17

Earlier quoted context omitted.

This is where Canada's new law gets really weird. We also have an "investment" class visa and almost everyone who has used this bought a house to meet the "minimum requirements" https://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=653... So.. earlier they encouraged foreigners to buy houses in order to get PR cards, now they ban it??

Both foreign housing sales and startup visa-style investments flood foreign capital into the country making everyone wealthier (either getting reinvested in more housing/jobs or spent in stores then taxed). So hopefully the new law won't do much to stop that. It's probably not surprising that for all the things to get upset about, re: lack of housing supply, people always choose the foreign boogeyman route.

>"making everyone wealthier"

That's not the case. More like "making everyone suffer the consequences of inflation more". And even more stronger point is that Canadians shouldn't be more wealthier. Especially so if the excess wealth comes from foreign countries. And if the country of wealth origin belongs to the third world it's outright evil, nothing less. It's just another form unholy imperial colonialism and I can't believe somebody still defends that kind of immorality.

Re: Canada bans most foreigners from buying homes

#68

Post by tpush »

xkcd-sucks wrote: post #30
AbrahamParangi wrote: post #22

Of all the things that a person can own, land seems the least justified to me. There is a finite amount of it, you did not create it, you cannot destroy it, and essentially all ownership derives from conquest, in recent or ancient history.

Land seems like one of the oldest and most "natural" forms of ownership -- Many animals, plants, bacteria, fungi will establish territory and defend it against conspecfics and competitors

Natural doesn't imply good.

Re: Canada bans most foreigners from buying homes

#69

Post by rsync »

Jemm wrote: post #23

Canada is also bringing in one million immigrants a year to feed the exploitative low paying job market and to try to stave off recession. These immigrants tend to gravitate in either Toronto or Vancouver. Meanwhile corporate and rich investors are snapping up any property they can get their hands one. In Ontario the Premiere is reclassifying conservation land owner by his buddies to allow them to build developments.…

"The foreign ban is only for high density areas."

Is this correct ?

Under these new laws a foreigner can still purchase farm, or ranch land or, for instance, a ski chalet in Golden ?

Asking for a friend ...

Re: Canada bans most foreigners from buying homes

#70

Post by asdff »

JacobThreeThree wrote: post #58
tomohawk wrote: post #19

Earlier quoted context omitted.

Exactly. This is only attracting foreign interest due to th artificially constrained supply. If they were serious about the issue, they would increase supply.

Imagine if the government of Canada used just 1% of the 89% of crown land it owns out of all the land in Canada to give to people for housing.

There's no shortage of land in Canadian cities or really any western city in a housing crisis today. The problem is that this land is squandered on lower density development that is illegal to improve into higher density development thanks to zoning mandating low density. Zoning must keep up with job growth or else you end up with the situations we see today: wealthy people entering bidding wars on an 80 year old originally working class home.
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