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

Post by hx87 » Mon, Aug 08, 2016, 4:26 PM UTC

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.

Post by SmellTheGlove » Mon, Aug 08, 2016, 4:33 PM UTC

jpollock wrote: post #40

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…

    1. “investment” means:
    (a) an enterprise;
    (b) shares, stocks and other forms of equity     participation in an enterprise;
    (c) bonds, debentures, and other debt instruments of an enterprise;
   (d) a loan to an enterprise
    (i) where the enterprise is an affiliate of the investor, or
    (ii) where the original maturity of the loan is at least three years;
    (e) notwithstanding sub-paragraphs (c) and (d) above, a loan to or debt security issued by a financial institution is an investment only where the loan or debt security is treated as regulatory capital by the Contracting Party in whose territory the financial institution is located;
    (f) an interest in an enterprise that entitles the owner to share in the income or profits of the enterprise;
    (g) an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution;
    (h) interests arising from the commitment of capital or other resources in the territory of a Contracting Party to economic activity in such territory, such as under
    (i) contracts involving the presence of an investor’s property in the territory of the Contracting Party, including turnkey or construction contracts, or concessions to search for and extract oil and other natural resources, or
    (ii) contracts where remuneration depends substantially on the production, revenue or profits of an enterprise;
    (i) intellectual property rights; and
    (j) any other tangible or intangible, moveable or immovable, property and related property rights acquired or used for business purposes;

    but “investment” does not mean:

    (k) claims to money that arise solely from
    (i) commercial contracts for the sale of goods or services, or
    (ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by sub-paragraph (d); or
    (l) any other claims to money,

    that do not involve the kinds of interests set out in sub-paragraphs (a) to (j);

Post by kamilszybalski » Mon, Aug 08, 2016, 4:38 PM UTC

skylan_q wrote: post #43

This tax won't do much to impact the market directly as foreign capital makes up about 4-8% of the purchase activity, which is elevated but not outrageous. Foreign funds also buy at the same average price as local funds so it's not about rich buying mansions. The larger impact will be on locals thinking "this is the end of chinese money, so the market will tank!", which will scare them away from the market.

Post by skylan_q » Mon, Aug 08, 2016, 4:40 PM UTC

pesfandiar wrote: post #49

jpollock wrote: post #40

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…

I don't know much about the legal aspects of international agreements like that, but is real estate considered an investment vehicle like e.g. bonds and stocks? You'd think there should be some exceptions, since real estate is enabling local communities, and you know, provides shelter for people to live in.

Post by vinceguidry » Mon, Aug 08, 2016, 4:47 PM UTC

skylan_q wrote: post #39

hellogoodbyeeee wrote: post #38

Earlier quoted context omitted.

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.