Canada to ban foreigners from buying homes • Hacker News Board

Re: Canada to ban foreigners from buying homes

#781

Post by kashunstva » Fri, Apr 08, 2022, 6:14 PM UTC

RocketOne wrote: post #747

bawolff wrote: post #665

Earlier quoted context omitted.

> This isn't really true though. Housing is expensive everywhere, even in unpopular cities, even in cities losing population. Calgary? Its a hugely popular city, with a similar growth rate as vancouver and yet housing is much cheaper (relatively speaking)

Very true. The same house I just sold in Calgary for 400k is worth 1.2M in Vancouver and area. Which is why there is so much money coming from Vancouver and the GTA to Calgary and Alberta.

The growth of remote work, fuelled partly, but not entirely by the pandemic has supercharged our market which is two and a half hours outside the GTA. Such a temporary solution though because equilibrium will be achieved with or without Federal intervention. Sadly we won’t probably even get high speed rail transit to and from the GTA out of this.

Re: Canada to ban foreigners from buying homes

#782

Post by kashunstva » Fri, Apr 08, 2022, 6:29 PM UTC

citrusybread wrote: post #480

cameronh90 wrote: post #392

Earlier quoted context omitted.

> There's only so far you can bus, train, drive, bike, walk, seaplane, helicopter, hyperloop, or transporter in to go to work. Canadian cities are, just like cities in the US, hitting this limit rather aggressively. Canada's largest urban area is 5.6 million people. London, Paris and Seoul are around double that, NYC is 19 million and Tokyo is 37 million. Why are Canadian cities hitting this limit at such a comparati…

Extreme car dependency. Toronto is suffering from the same problem Dubai has. It suddenly became relevant when sovereignists gained power in Quebec and the business class were worried about Montreal being a liability. So they packed up and went down the 401 to Toronto. It has the infrastructure for a much much smaller city, and one in the North American car-driven style (massive highways, occasional regional rail tha…

London (ON) is definitely on that list.

One of our chief problems is that there’s no interlock between development - whether dense or not - and public transit and other public infrastructure. London is still bisected by surface level train tracks with minimal above or below grade crossings; and in the seven years I’ve lived here nothing has changed.

Re: Canada to ban foreigners from buying homes

#783

Post by jl2718 » Fri, Apr 08, 2022, 6:39 PM UTC

exdsq wrote: post #591

jl2718 wrote: post #374

Earlier quoted context omitted.

This is called “Blockbusting”. Wonderful.

I think it was a little more altruistic than that - he just found people with criminal backgrounds were struggling to find places and on the whole were just as reliable to pay rent on time because they appreciated the opportunity

Altruism might be believable if:

1. He lived in the same neighborhood as his renters, and not 1000s of miles away in the UK

2. He didn’t kick them out after a few years by flipping it.

3. It was a slow, long-term acquisition of rentals for income rather than flipping profit.

Sorry; the facts indicate a scheme. I don’t begrudge him personally; there is always some government program that makes this chicanery profitable at the expense of the working class, and somebody else would have done it.

Re: Canada to ban foreigners from buying homes

#784

Post by earleybird » Fri, Apr 08, 2022, 6:42 PM UTC

Ensorceled wrote: post #735

earleybird wrote: post #685

Earlier quoted context omitted.

The CRA is fairly particular[0] about income from the sale of a property. They want to know, for example, how long it has been your primary residence and if it was rented before then, what was the appraised value. You will end up paying capital gains on the delta. So, if you've been renting out a property, move in to it for 6 months and then sell you'll be paying capital gains on everything but the last 6 months. The…

The point is that you have changed your principle residence to the new property and, hence, it is not taxed on sale. "When you change your principal residence to an income producing property, such as a rental or business property, you can make an election not to be considered as having started to use your principal residence as a rental or business property. This means you do not have to report any capital gain when…

The scenario allowed in your reference is not the same. The original scenario was a rental/income property declare principle (for some short period of time) for the purpose of shielding capital gains whereas the exemption you reference is a principle residence allowed to be used for rental/income. Note that you cannot declare another property as principle while you're renting out your homebase. I expect it is meant for cases where you might take a job transfer for a period of time.

The taxman never leaves money on the table.

Re: Canada to ban foreigners from buying homes

#785

Post by jl2718 » Fri, Apr 08, 2022, 6:51 PM UTC

medvezhenok wrote: post #517

jl2718 wrote: post #427

Earlier quoted context omitted.

You should always vote for less taxes on yourself. Voting for more taxes on other people does not reduce your taxes.

I would say that there are moral positions where you should vote for more taxes on yourself (and others like you), not less. Because always voting for less taxes for yourself is a zero sum game where everybody loses, since the government has to be funded somehow (and I prefer it to be done via taxes versus inflation, which is much more regressive).

1. Price inflation is almost unrelated to monetary inflation.

https://fred.stlouisfed.org/graph/?g=O2ZH

2. Tax collection does not change a governments ability or willingness to incur debt.

3. Government spending may not be related to ‘needs’ of the citizens.

It’s just a collection of organizations and employees. They get promoted based on spending. Effectiveness is impossible to measure.

Re: Canada to ban foreigners from buying homes

#786

Post by jl2718 » Fri, Apr 08, 2022, 6:54 PM UTC

medvezhenok wrote: post #522

jl2718 wrote: post #410

Earlier quoted context omitted.

This will just create complicated sales contracts, and advantage bigger landlords. The simple solution is market-valued property tax, because it’s basically unavoidable.

The solution is land value tax. Nobody deserves to own a SFH in a large city when that land could be used for more housing - you want to live in a SFH, move to the countryside (or pay an exorbitant tax rate which will fund other development). It's also why LA is such a mess.

Seems anachronistic to me. There are many resources other than land which define an economy and a nation state.

Re: Canada to ban foreigners from buying homes

#787

Post by robonerd » Fri, Apr 08, 2022, 7:27 PM UTC

manquer wrote: post #723

robonerd wrote: post #103

Earlier quoted context omitted.

> Foreign investors would be buying mansions that locals couldn't afford anyways. If nobody is around to buy that mansion, it would eventually be sold to a developer who either turns it into apartments, or tears it down and builds an apartment building there. I've seen this happen numerous times in my neighborhood. Also 20% is huge.

If the zoning laws allowed that yes, Vancouver(similar problems in CA) doesn’t want to rezone , so not lot of supply. It is immaterial what rich domestic or international buyers do as their class of property doesn’t change supply of the property you and I can buy. Same with commercial property no difference to us [1] zoning makes each class of property non fungible between other classes , it is like price gold doesn’…

If Seattle can get mansions converted/replaced into apartments, I think Vancouver should be able to as well. They're not exactly worlds apart culturally.

Re: Canada to ban foreigners from buying homes

#788

Post by ska » Fri, Apr 08, 2022, 7:29 PM UTC

vkou wrote: post #373

ska wrote: post #348

Earlier quoted context omitted.

Unless things have changed radically since I was last there, downtown is mostly not dense. But even if it were, it wouldn't solve the real problem in these north american cities, which is the "missing middle". The model of small area of highly dense towers aimed at 20-something urbanites with no kids surrounded by spaced out single family homes with a yard is just fundamentally unworkable at any real scale. If Vancou…

Vancouver downtown (In large part, thanks to the west end) is incredibly dense. 23,838 people/km2 - the same density as Manhattan. Once you leave the penninsula, though, it's surrounded by a lot of suburban sprawl, with small pockets of density around the SkyTrain stations. Unlike most North American cities, though, at least it has those pockets of density!

This map (https://maps.nicholsonroad.com/zones/) from another thread (https://news.ycombinator.com/item?id=30960632), I think illustrates the problem.

If I understand "the pennisula" correctly, you are referring to something like 1/10th of the city proper (not the greater area, just the city of Vanc.). It is mostly zoned appropriately; outside of that it's a mess.

Everything in grey and yellow is part of the problem mentioned above.

Re: Canada to ban foreigners from buying homes

#789

Post by gorjusborg » Fri, Apr 08, 2022, 7:44 PM UTC

incomingpain wrote: post #733

gorjusborg wrote: post #79

Earlier quoted context omitted.

I don't know how real estate market works in Canada, but I can totally see how 5% of buyers could mess up the market in the U.S.. House pricing is set based on 'comps' (comparable homes and the price they sold for). That means that a small percentage of buyers can essentially bump (initial) pricing for all homes.

>I don't know how real estate market works in Canada, but I can totally see how 5% of buyers could mess up the market in the U.S.. 5% foreigner owned is not big enough to have an appreciable difference. How about funds buying real estate? What used to be around 10% went to 20% in 2020 and then went to 40% in 2021. Nobody will buy negative yielding bonds. It only leaves a couple other options.

> 5% foreigner owned is not big enough to have an appreciable difference

I doubt it makes zero difference, but like you, it's just my feeling.

Real estate investing could be a price driver, certainly. I don't know what it's like in Canada, but I know that in my location even individuals are buying second and third homes and renting them out as short-term rentals. Doesn't seem to be sustainable to me, and certainly is affecting local housing prices.

One way I'd combat this is to ban short-term rental outside of hospitality zoned areas.

Re: Canada to ban foreigners from buying homes

#790

Post by gorjusborg » Fri, Apr 08, 2022, 7:46 PM UTC

ehsankia wrote: post #654

gorjusborg wrote: post #79

Earlier quoted context omitted.

I don't know how real estate market works in Canada, but I can totally see how 5% of buyers could mess up the market in the U.S.. House pricing is set based on 'comps' (comparable homes and the price they sold for). That means that a small percentage of buyers can essentially bump (initial) pricing for all homes.

The problems of the housing market is the exact same as any other expensive city in the US or anywhere else. Home-owners with local power messing with zoning laws to limit supply and boost the price of their homes. It's always a supply issue. https://www.youtube.com/watch?v=6OZJClSdZ28

Interestingly, I'm seeing a lack of zoning enforcement drive up prices locally.

Small-time investors are buying homes in residential zones to put on short-term rental sites, and because they generate revenue from the house, are able to offer a much higher amount and have it still make financial sense.