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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

#31

Post by querulous »

feklar wrote: post #25
overcast wrote: post #23

Wonder if San Francisco could do the same to these foreign real estate squatters.

The tax only really affects landed immigrants who live and work in BC, and foreign capital investments in new developments as the Chinese speculators with billions who want to park money in Vancouver have already found ways around it because they can deposit millions to set up national corporations and have it do all the land holding/flipping. For example my sister who has lived here 30yrs with American citizenship w…

the tax doesn't apply to permanent residents. just resident temporary foreign workers and non-residents

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

#32

Post by allengeorge »

feklar wrote: post #25
overcast wrote: post #23

Wonder if San Francisco could do the same to these foreign real estate squatters.

The tax only really affects landed immigrants who live and work in BC, and foreign capital investments in new developments as the Chinese speculators with billions who want to park money in Vancouver have already found ways around it because they can deposit millions to set up national corporations and have it do all the land holding/flipping. For example my sister who has lived here 30yrs with American citizenship w…

If she's a PR then the tax doesn't apply...

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

#33

Post by Tiktaalik »

I'm generally in favour of this policy, though it's a bit half baked, and it is too little, too late. It was probably only implemented because the government had done nothing on the file, is coming into an election, and realized they were going to get thrown out by an angry electorate.

In a lot of ways Vancouver has been ruined by the housing bubble and influx of speculative foreign capital. Extremely high house prices have created a strong incentive for anyone who can easily work elsewhere (ie. a tech worker) to move away. Many of my friends have drifted away to Seattle and SF.

The only way houses could become even slightly affordable at this point would be a housing crash. This would be disastrous to the local economy, which has become entirely built on selling housing to one another. Accordingly it's hard to wish for that.

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

#34

Post by goatforce5 »

feklar wrote: post #21
deanCommie wrote: post #15

Earlier quoted context omitted.

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

0.8% vacancy rate, good luck renting also landlords all use fix term year leases now where you agree to move after it expires in order to bypass the provincial rent increase cap and raise your rent +30% https://www.biv.com/article/2016/6/tight-rental-market-bc-la...

FWIW, pre-agreed termination agreements like this are void in Ontario. I suppose it's to avoid exactly the situation you describe.

http://www.ontariotenants.ca/law/act05.phtml

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

#35

Post by goatforce5 »

feklar wrote: post #25
overcast wrote: post #23

Wonder if San Francisco could do the same to these foreign real estate squatters.

The tax only really affects landed immigrants who live and work in BC, and foreign capital investments in new developments as the Chinese speculators with billions who want to park money in Vancouver have already found ways around it because they can deposit millions to set up national corporations and have it do all the land holding/flipping. For example my sister who has lived here 30yrs with American citizenship w…

re: setting up Canadian corporations with foreign money

> The release defines foreign corporations as companies "not incorporated in Canada or, incorporated in Canada, but controlled in whole or in part by a foreign national or other foreign corporation, unless the shares of the corporation are listed on a Canadian stock exchange."

It remains to be seen how much effort will go in to enforcement re: determining the ultimate ownership of companies investing in Vancouver real estate.

> According to a release, the government defines a foreign national as someone who is not a Canadian citizen or permanent resident, "including stateless persons."

Presumably your sister has permanent resident status and is exempt from the new tax because of that.

http://www.cbc.ca/news/canada/british-columbia/metro-vancouv...

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

#36

Post by inopinatus »

ab5tract wrote: post #24
randomgyatwork wrote: post #19

I like how this article frames it as an issue about the 'free movement of capital.' In a lot of instances 'free-trade' agreements exist to help the mega-rich, this seems like a perfect example.

Critical analysis of neoliberal economics is not likely to be found in the pages of one of its primary mouthpieces, though sometimes the Economist does surprise and actually mentions an externality or two.

I think this is an unfair generalisation. The Economist has always had free-market leanings, long before the term "neo-liberal" was spawned. Moreover even a cursory glance at their comments feeds (you'll need a strong stomach of course) reveals an equal quantity of complaining about this "leftist organ" and its "socialist liberal agenda" as there is about being a "trade agreement apologist" or "capitalist rag".

It may be the only way to gauge impartiality is when everyone is equally offended.

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

#37

Post by dadkins »

roel_v wrote: post #11
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.

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.

Having looked at a lot of overpriced "fixer-uppers" lately, believe me, owners aren't taking care of their places either!

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

#38

Post by hellogoodbyeeee »

velodrome wrote: post #30

The Canadian housing market is currently in a bubble. The same can be said about the Australian housing market. Canada http://i.huffpost.com/gen/1100960/thumbs/o-BMO-HOUSE-PRICES-... http://static5.businessinsider.com/image/54aea0136da8118f2ae... Australia https://1.bp.blogspot.com/-NuIUphAP17w/Vth6P3w2FzI/AAAAAAAAC... http://www.propertyobserver.com.au/images/stories/keenjan2.p...

A bubble is a more complex phenomenon than large price increases. A bubble is inflated by speculation that isn't rooted in anything except the rising price.

If rich foreigners are buying property to summer in because they like the weather, then not a bubble. If rich foreigners are buying property because the property has gained X% in price every year for the last ten years but they don't know anything about the specifics of the local real estate market, then more likely a bubble.

You also can't say something is a bubble until after it pops.

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

#39

Post by skylan_q »

hellogoodbyeeee wrote: post #38
velodrome wrote: post #30

The Canadian housing market is currently in a bubble. The same can be said about the Australian housing market. Canada http://i.huffpost.com/gen/1100960/thumbs/o-BMO-HOUSE-PRICES-... http://static5.businessinsider.com/image/54aea0136da8118f2ae... Australia https://1.bp.blogspot.com/-NuIUphAP17w/Vth6P3w2FzI/AAAAAAAAC... http://www.propertyobserver.com.au/images/stories/keenjan2.p...

A bubble is a more complex phenomenon than large price increases. A bubble is inflated by speculation that isn't rooted in anything except the rising price. If rich foreigners are buying property to summer in because they like the weather, then not a bubble. If rich foreigners are buying property because the property has gained X% in price every year for the last ten years but they don't know anything about the speci…

A bubble is inflated by speculation that isn't rooted in anything except the rising price.

It's been like that for the last 8+ years.

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

#40

Post by jpollock »

The last paragraph indicates the precise problem with this policy - it isn't adhering to the terms of the free trade agreements that Canada has signed - both NAFTA and the "China Foreign Investment Promotion and Protection Agreement" require that offshore investors be treated the same as onshore.

The CFIPPA [1] is clear on the subject:

1. Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the expansion, management, conduct, operation and sale or other disposition of investments in its territory.

Perhaps the claim is that the initial purchase of the asset is what's being taxed, which might be seen as exempt?

[1] http://www.international.gc.ca/trade-agreements-accords-comm...

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