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Canada bans foreign home buyers for two years

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Re: Canada bans foreign home buyers for two years

#721

Post by mzs »

RocketOne wrote: post #201

Im one of those 'greedy' old farts who owns more than one home. We have one for ourselves and 5 rentals. Im starting to agree with those who are feeling priced out of the market. What would make me stop buying homes? A graduated tax would. If there were no sales tax on the first two, and then 15% tax on the third, 25% tax on the 4th, and going up by 10% for each subsequent house, it would definitely make me quit buyi…

I'm curious is there not a property tax effect? Here where I live in Illinois I pay property taxes on my home. Where I live it is currently about 4.4% of my home's real value every year. I am able to deduct it from income only for state income tax purposes. There are limitations there that I don't reach based on my income but also I can only do so for a small handful of connected parcels. So in your case you would only be able to deduct for one of your homes. Can you please explain how it works where you live?

Additionally for a home sale in US I have to treat it as income for income tax purposes. In my state there are state, county, and often local transfer taxes as well. Here $1 for every $1000 of sale price to the state and an additional 50c for every $1000 to the county are typical numbers. There are also a number of other fees like recording fees, but those are flat rates.

Re: Canada bans foreign home buyers for two years

#722

Post by PaulDavisThe1st »

weeksie wrote: post #687
johnnyanmac wrote: post #583

Earlier quoted context omitted.

"you solve that buy building more homes _where people want to live_. But that's difficult because cities have all these veto points" I'm not going to pretend there isn't some literal gatekeeping going on here that make this more difficult than necessary. But I'm also not exactly surprised that in cities as already densely packed as Los Angeles that there aren't exactly acres or hectacres of land just sitting around t…

1. There's tons of unused vertical space in LA. 2. They make more land all the time. Look at a map of Boston in 1800. In fact, look at an old map of almost any city near a large body of water and compare it to today and you'll find a lot more land being used.

> They make more land all the time.

It is true that many cities have filled in shorelines to create more buildable/usable surface.

It is not true that cities do this all the time.

Re: Canada bans foreign home buyers for two years

#723

Post by MAGZine »

itsoktocry wrote: post #631
MAGZine wrote: post #597

Earlier quoted context omitted.

In what world are "temporary" foreign workers buying homes in Canada? With what salary? Same with Refugees, students. Funny how in the first hundred years in Canada, we didn't have any issue with housing costs, despite accepting vast amounts of refugees. I'm not saying it's not making the problem worse, but to SOLELY pin it on them is IMO willful ignorance. if we banned all immigrants, of any kind, tomorrow, would Ca…

> Same with Refugees, students. There are Twitter accounts dedicated to calling out multi-million dollar homes in Vancouver and Toronto, owned by "students".

Are you saying that Canada's housing crisis are caused by these individuals?

Re: Canada bans foreign home buyers for two years

#724

Post by [deleted] »

huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

[deleted]

Re: Canada bans foreign home buyers for two years

#725

Post by titzer »

huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

> The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting, NIMBYism.

These are contributing factors, but the energy that drives the bubble is capital, and bubbles have a way of becoming self-perpetuating. When a bubble becomes critical, you can't "build out of it", unless you think you can actually produce 10% more houses in a year, every year!

Re: Canada bans foreign home buyers for two years

#726

Post by munk-a »

seunosewa wrote: post #710
munk-a wrote: post #707

Earlier quoted context omitted.

This may be a healthy long term outcome but a lot of people have a good portion of their value parked in their home - if there is a sudden oversupply how will you cousin the economic and social shock as millions of middle-class folks suddenly lose their wealth while upper class folks mainly invested in the stock market come out the far side with even more wealth? This is not an easy problem - and as soon as you try a…

So why bother cutting off foreigners if you want your real estate to keep appreciating in value?

To slow the value gain - I think ideally the government would like to sort of stabilize housing prices in BC & ON for a few years then re-start a slower more reliable growth pace... exploding the housing market fully could cause a value loss - so this is like opening one pressure release valve to slow the build up a bit.

Re: Canada bans foreign home buyers for two years

#727

Post by kspacewalk2 »

TimPC wrote: post #713
kspacewalk2 wrote: post #693

Earlier quoted context omitted.

I think we have a philosophical difference here. You seem to accept the idea of centrally planning a city down to the micro-management level. I reject it. Yes, as you say, "this policy says you *could* build an 11 story building without providing parking in any small township on Yonge Street". The operative word is *could*. If there's market demand for it, you could and you absolutely should do it. If there isn't, yo…

I think you are leaping to a lot of conclusions not in evidence. There is a big difference between "centrally planning a city down to the micro-management level" and overriding any ability for a municipality to assert what it feels is needed in a development. Negative externalities are a very real thing and allowing developers to have arbitrarily many of them at arbitrarily bad levels is not the only alternative to c…

>I think you are leaping to a lot of conclusions not in evidence. There is a big difference between "centrally planning a city down to the micro-management level" and overriding any ability for a municipality to assert what it feels is needed in a development.

Not really, if the municipality is in fact willing to centrally plan a city down to the micro-management level, and a different level of government wants to prevent it from happening. Some overriding is gonna have to happen here.

>Negative externalities are a very real thing

Indeed. Example: artificially embalming swathes of single-family neighbourhoods in time, right next to recently built public transit we're sinking billions into building. So let's not be selective about negative externalities and consider the ones created or exacerbated by NIMBY-driven urban planning, too.

>allowing developers to have arbitrarily many of them at arbitrarily bad levels is not the only alternative to complete and total central planning. Believe it or not there are reasonable middle grounds that allow some influence on developments from central planning to limit negative externalities while also listening to market forces. My beliefs align somewhere in this middle ground.

Sure. I too am somewhere between allowing toxic smelters next door to kindergartens and Soviet-style central planning where government owns all and builds all. Everyone's gonna align themselves somewhere in this middle ground between two contrived and straw-man extremes, all NIMBYs included. The whole debate is about where in this middle ground we ought to be. Forgive my skepticism, it's just that I've heard this middle-ground line often. And often, this is simply a rhetorical cop-out and a prelude to killing off any meaningful changes that allow for building the types of housing people want in places where they want it.

Re: Canada bans foreign home buyers for two years

#728

Post by ladyattis »

RocketOne wrote: post #201

Im one of those 'greedy' old farts who owns more than one home. We have one for ourselves and 5 rentals. Im starting to agree with those who are feeling priced out of the market. What would make me stop buying homes? A graduated tax would. If there were no sales tax on the first two, and then 15% tax on the third, 25% tax on the 4th, and going up by 10% for each subsequent house, it would definitely make me quit buyi…

Well I have to ask you whether or not you participate in zoning board meetings? Have you actively fought or supported any motions to restrict mixed use development or anything that would bring the "missing middle" to your city?

If you haven't done the following then I don't think you're the problem but a symptom. Sure, we could tax small landlords more over an arbitrary amount of real estate valuation or something but I would suspect that due to how corporate structuring can be handled that it would be mitigated by such things. I think it'll be a complex set of decisions that'll need to be taken before North American cities become economically viable for most folks in the lower income brackets. Until the various benefits are exceeded by the hidden costs of keeping them for multiple take holders, nothing will change.

Re: Canada bans foreign home buyers for two years

#729

Post by munk-a »

nullc wrote: post #626
clpm4j wrote: post #582

Earlier quoted context omitted.

Eliminating a subset of buyers, i.e. slightly decreasing demand, is an easy and obvious action to take. Will it have a significant and long lasting effect? Very likely not. But when examining the supply-demand equation, it's painfully obvious to say "foreigners who don't live here should not be allowed to buy residential housing". It's way, way easier than incentivizing developers to build affordable housing and deal…

A key point is that people buying for investment are less sensitive to driving the prices up-- so long as they're sustained. If you have enough wealth that you would be buying multiple properties anyways, buying fewer more expensive places just lowers your transaction costs. As such, they likely have an outsized effect on driving up prices. I'm dubious that Canada's policy will achieve that, as I understand it they e…

In theory BC at least has a residency tax on vacant homes - but that just increases the cost of making the investment and shifts the numbers... it doesn't necessarily make the investment a losing strategy unless you're right on the border.

Re: Canada bans foreign home buyers for two years

#730

Post by michaelje »

weeksie wrote: post #511
huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

It'll be interesting in a couple years when prices are still crazy and someone has to come up with an excuse for why. It's amazing to me how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in. It's always a search for exotic explanations like foreign buyers and mysterious empty apartments.

The issue is people need homes to live, but people also use homes as an investment vehicle. These are fundamentally at odds with each other.
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