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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

#71

Post by hackerboos »

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 would expect China not to pursue damages considering that the Chinese residents laundering money in Canada are breaking China's capital controls in the process.

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

#72

Post by hackerboos »

goatforce5 wrote: post #34
feklar wrote: post #21

Earlier quoted context omitted.

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

Ontario's rental laws are great compared to other provinces with the exception of maybe Quebec.

Once you sign a lease you and roll on month-to-month it's unlikely you will be evicted. Landlords either need to sell the property or move into it themselves to get the property back.

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

#73

Post by raquo »

atemerev wrote: post #66
raquo wrote: post #47

Earlier quoted context omitted.

Because you'll never build enough. Global demand surpasses potential local supply by a huge margin. Prices won't even begin to drop.

Vancouver is Canada, with lots of undeveloped spaces available. It is not Manhattan or Hong Kong (not that Manhattan is some sacred land too that everybody should live there). It can be safely increased in size many times. But some might say this will drive property prices down? Mission accomplished!

That's ridiculous, a city growing in size or density will never see decreased property prices. This will actually increase the prices because the city is now a more "desirable" place to be (for some).

Foreign money is a real problem, there is no way around it. If you want your city's housing market to be a wide open safe haven for everyone in the world to park their money in, you're going to push out the locals because these investors' demand for housing does not increase locals' incomes, it only increases housing prices.

In Canada this problem is especially bad because of immigration loopholes for the rich. For vast majority of Vancouver properties it actually costs less to buy permanent residency via Quebec's immigrant investor program (~$100K in interest payments, no other requirements) than to pay this stupid 15% tax. Just let that sink in for a minute.

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

#74

Post by EnFinlay »

skylan_q wrote: post #57
pesfandiar wrote: post #49

Earlier quoted context omitted.

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.

Vancouver is tight and they aren't building/aren't allowing more building in the immediate area. Housing is for people to live in, but far too many have been speculating.

There is a lot of building happening in Vancouver right now, mainly housing blocks being turned into high rises.

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

#75

Post by EnFinlay »

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.

This is the narrative being pushed but I don't believe it to be true.

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

#76

Post by atemerev »

raquo wrote: post #73
atemerev wrote: post #66

Earlier quoted context omitted.

Vancouver is Canada, with lots of undeveloped spaces available. It is not Manhattan or Hong Kong (not that Manhattan is some sacred land too that everybody should live there). It can be safely increased in size many times. But some might say this will drive property prices down? Mission accomplished!

That's ridiculous, a city growing in size or density will never see decreased property prices. This will actually increase the prices because the city is now a more "desirable" place to be (for some). Foreign money is a real problem, there is no way around it. If you want your city's housing market to be a wide open safe haven for everyone in the world to park their money in, you're going to push out the locals becau…

And what is the problem with this? The local benefits in property taxes will be enormous.

I live in Geneva, Switzerland. We are welcoming rich immigrants.

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

#77

Post by raquo »

atemerev wrote: post #76
raquo wrote: post #73

Earlier quoted context omitted.

That's ridiculous, a city growing in size or density will never see decreased property prices. This will actually increase the prices because the city is now a more "desirable" place to be (for some). Foreign money is a real problem, there is no way around it. If you want your city's housing market to be a wide open safe haven for everyone in the world to park their money in, you're going to push out the locals becau…

And what is the problem with this? The local benefits in property taxes will be enormous. I live in Geneva, Switzerland. We are welcoming rich immigrants.

$3000 CAD per year per condo/house is very small consolation given all the negatives.

For example, just one of the many problems – a foreigner buys residency ($100K paid to Quebec, not BC), buys a house here, then continues to run his business in China, while their family moves into the house full time. Then their family uses up social services like universal healthcare, public schools and universities, while collecting low-income tax rebates because the breadwinner is not a Canadian tax resident, and does not need to declare their global income.

That's not some thought exercise, it's a very common occurrence here. So the rest of Canadians end up paying taxes to finance all this, and get inflated housing costs as a bonus. I don't see how that's a good outcome.

I've no idea how things work in Switzerland, but they don't work in Canada with our current laws.

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

#78

Post by jpollock »

hackerboos wrote: post #71
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 would expect China not to pursue damages considering that the Chinese residents laundering money in Canada are breaking China's capital controls in the process.

Americans tend to be more litigious, and NAFTA is even more clear than the Chinese agreement [1], mentioning establishment and acquisition of investments.

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

2. Each Party shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.

Canada has carved out some exemptions, specifically around ocean front property [2], probably intended for the control of ports.

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

[2] http://www.sice.oas.org/trade/nafta/anx2cda.asp

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

#79

Post by miraj »

EnFinlay wrote: post #75
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.

This is the narrative being pushed but I don't believe it to be true.

Which part of the above comment you believe is not true?

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

#80

Post by miraj »

atemerev wrote: post #66
raquo wrote: post #47

Earlier quoted context omitted.

Because you'll never build enough. Global demand surpasses potential local supply by a huge margin. Prices won't even begin to drop.

Vancouver is Canada, with lots of undeveloped spaces available. It is not Manhattan or Hong Kong (not that Manhattan is some sacred land too that everybody should live there). It can be safely increased in size many times. But some might say this will drive property prices down? Mission accomplished!

>> Vancouver is Canada, with lots of undeveloped spaces available......It can be safely increased in size many times.

- That is not correct. Vancouver proper is hampered re: expansion because of mountains and sea. It has limited availability of lands for development. Only way it can meet demand for housing is via vertical (i.e. condos) vs. horizontal (i.e. houses) ecpansion. But there is substantial local resistance to highrises, especially outside the downtown/west end area.

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