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Foreign residential property buyers to be taxed at 15% in Vancouver

economist.com

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Re: Foreign residential property buyers to be taxed at 15% in Vancouver

#11

Post by roel_v »

MichaelBurge wrote: post #7
goatherders wrote: post #3

There is nowhere for people to live that is affordable and it's hurting the economy (particularly tech). Young people are commuting up to 2 hours each way to work while tons of condos sit vacant as foreigners park their cash in the market. Even those wanting to buy with traditional financing are losing out to all-cash buyers above asking.

Why don't they hire a property management company to rent it out? Whatever's preventing that sounds like the real problem here.

When you buy property as a value store, more often than not ot's more trouble than it's worth to rent out. Not to mention that many renters, to put it mildly, don't take care of the building or the area very much, which has a big cost associated with it if you ever want to live there yourself.

Re: Foreign residential property buyers to be taxed at 15% in Vancouver

#12

Post by caffodian »

Vancouver is currently a mess of low interest rates, FOMO, foreign buyers, and supply issues. Due to both the city & BC government having a large number of developer donors, it's also a very partisan issue.

For the longest time, the ruling provincial party was of the opinion that this was not a problem and high property prices was due to the strong economy (circular logic, as real estate & construction are the drivers of that.) They were getting pretty hammered in polls. On top of that, they cited a ~5% ish foreign purchaser number based on 19 days of data, only to then bump it to 10% conveniently on the release of new data a day or two after introducing this 15% tax...so yea. It's a disaster.

Re: Foreign residential property buyers to be taxed at 15% in Vancouver

#14

Post by nathanvanfleet »

I live in Canada and basically Vancouver, possibly the Canadian city with the nicest weather, is completely cut off to me. It's not even like Silicon Valley etc where there is an industry and you can find a job that pays better here, it's just completely too expensive.

There was a website called something like "crack house or million dollar Vancouver home" because knock-down quality bungalows were selling for over a million dollars there.

Re: Foreign residential property buyers to be taxed at 15% in Vancouver

#15

Post by deanCommie »

nathanvanfleet wrote: post #14

I live in Canada and basically Vancouver, possibly the Canadian city with the nicest weather, is completely cut off to me. It's not even like Silicon Valley etc where there is an industry and you can find a job that pays better here, it's just completely too expensive. There was a website called something like "crack house or million dollar Vancouver home" because knock-down quality bungalows were selling for over a…

You could rent. Rental prices in Vancouver are fairly reasonable relative to purchase prices.

Re: Foreign residential property buyers to be taxed at 15% in Vancouver

#16

Post by lintiness »

doc_holliday wrote: post #9
MichaelBurge wrote: post #7

Earlier quoted context omitted.

Why don't they hire a property management company to rent it out? Whatever's preventing that sounds like the real problem here.

Well because the property is extremely overpriced when you consider market rate rents the yields are extremely low. You can only charge as much rent as the market will bear, which in some ways makes rental completely different to ownership prices. Basically the people buying it don't deam the return on renting it worth the risk of a bad tenant or worth the hassle. They don't need cashflow, are either using it as a sa…

sounds like you guys should dump as many of these properties on these fool heads as possible. you can buy them back in a few years for a lot less.

Re: Foreign residential property buyers to be taxed at 15% in Vancouver

#18

Post by _delirium »

skizm wrote: post #8

LLC with one Canadian involved gets around this I believe.

The usual skirt around a lot of real-estate law. Also a common way people (and companies) avoid triggering a revaluation for California Prop-13 purposes when selling property: the property is owned by a holding company, and people buy and sell stakes in the holding company, being careful to never buy/sell a >50% stake in any individual transaction. (The latter part is because California does make an effort to close this loophole: sales of a majority stake in an LLC imply the property it owns has changed hands. But then people just never do that, sometimes aoviding it in fairly brazen ways, e.g. Michael Dell bought a holding company without buying more than 50% of it by splitting the purchase between himself, his wife, and one of his business partners: http://www.santamonicadispatch.com/2013/05/prop-13-gives-edg...).

Re: Foreign residential property buyers to be taxed at 15% in Vancouver

#20

Post by caffodian »

deanCommie wrote: post #15
nathanvanfleet wrote: post #14

I live in Canada and basically Vancouver, possibly the Canadian city with the nicest weather, is completely cut off to me. It's not even like Silicon Valley etc where there is an industry and you can find a job that pays better here, it's just completely too expensive. There was a website called something like "crack house or million dollar Vancouver home" because knock-down quality bungalows were selling for over a…

You could rent. Rental prices in Vancouver are fairly reasonable relative to purchase prices.

The rental market has begun heating up lately (stories of rental auctions, renovictions, evictions for airBnB, etc) so although they may be comparatively reasonable, they may not stay absolutely reasonable for long.
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