Buying a flip? Budget for taxes.
As you’re probably aware, flipping real estate is a business and the Canada Revenue Agency is going to want their cut whether you’re a Canadian citizen or not. But what if they can’t track down the foreign seller? Then they’ll get it from the buyer. That’s right, if you’re buying property from a foreign seller there’s a small but important detail you should be aware of:
Under section 116 of the Income Tax Act, when a non-resident disposes of taxable Canadian property, the purchaser “is required to withhold 25 per cent of the purchase price…until such time as a certificate of compliance is obtained by the non-resident vendor.”
The non-resident vendor is required to notify Canada Revenue of the disposition either prior to the sale or 10 days after the disposition date.
“I’ve calculated it very carefully. It will be well worth the wait (even if it takes 5 years) when I buy that nearly new foreclosed detached home for cash.” | Vancouver Real Estate Anecdote Archive Says:
February 28th, 2011 at 12:27 am
[...] mattymatt at vancouvercondo.info February 24th, 2011 at 9:22 am – “My wife makes the average income of about $52,000 a year and I own a machine shop in Richmond, my take home is about $110,000. In 2008 we thought the market was going to tank, so we sold (“Big mistake”) our paid-off condo in Richmond, banked some of the money and invested the rest. For a 1-1/2 years we rented a top floor of a Vancouver “shit” house in the neighborhood of 20th and Fraser (bigger mistake). It also had a “basement” which was rented out. LIVING IN VANCOUVER IS NOT GREAT! : Traffic and commuting back to Richmond. Expensive rent for really old and shitty place! Assholes in basement suite…No parking everywhere… and the list goes on and on. So, as of January, we moved to Queensborough New West and are renting a nice 2 bdr top floor 1300 sqft condo for about the same price as the home in Vancouver. Even better, my Brother in-law is staying with us and pays us a-little rent. We can enjoy our money instead of throw it into high mortgage payments, taxes and (“strata” – cause even with our combined wage and money saved, to buy a “detached house” for 800k + is retarded!). I’ve calculated it very carefully. It will be well worth the wait (even if it takes 5 years) when I buy that nearly new foreclosed detached home for cash. The longer Vancouver RE market goes up, the bigger the crash. I can’t believe people (especially first time home buyers) with average incomes are still foolishly buying!” [...]
February 24th, 2011 at 5:08 pm
@painted turtle: That paper needs to study the Charter. It is not valid to deny a hospice a permit based on endogenous harm of nearby residents.
I'll be blunt: if this were a home for blacks and residents believed black people bring bad luck do you think they would stand a chance? Under the Charter, there is little to no difference between being old and sick and being black.
February 24th, 2011 at 4:26 pm
@painted turtle:
ARE THEY FUCKING SERIOUS?
That article outlines point by point why those people from Asia should immediately be given maps to the airport where they can get on a plane and GO HOME. I'm so fucking sick and tired of the assholes on this thread who try to deny that it's Asians that are ruining our community and driving prices up. IT IS ASIANS. People, do not be afraid to speak your minds, it's still a free country and if you don't like our immigration policies and the practice of Asian (with the help of their white real estate sluts) realtors you have a RIGHT to express your opinion. FUCK those who call it racism to speak out. WE are the victims of racism but most Canadians are too FUCKING STUPID to do anything about it. In Australia they tell new would be immigrants: FUCK OFF, WE'RE FULL
February 24th, 2011 at 4:25 pm
@painted turtle:
http://www.myuna.ca/wp-content/uploads/2010/04/Ca…
page 6
Holy Gaddafi, those wackos are for real and live in the neighborhood? I'd think it can be only in the movies. Let's import some Talibans too to mix it up.
February 24th, 2011 at 3:20 pm
let me share with you the blood sucking real estate vampire, very funny and a window into the future in BC.
http://www.youtube.com/watch?v=E2IjktYtwwo&NR…
February 24th, 2011 at 2:18 pm
My favorites are:
the poor lonely wife relocated by her Feng Shui master
the kid who refuses open windows
the toddler who wants to sleep with Mum
It tells you how much the kids got scared by the hysteria of the mothers over the prospect of declining property value.
February 24th, 2011 at 2:14 pm
@painted turtle: What a sickening display of empty-headed political correctness.
Did you see that pandering piece about the fathers working back in China "to earn income sufficient to support the family and the purchased property"?
Poor depressed immigrants suffering so much in their million dollar condos. Give me a freakin break. They are rich enough to choose to live the way they do. If they don't like it, GO HOME. Or don't live somewhere so expensive.
You want to see real suffering, go to the Downtown Eastside.
February 24th, 2011 at 1:20 pm
Here is the update using Larry's numbers.
February 2011 month-end projections
Days elapsed so far 18
Days remaining 2
5 Day Moving Average: Sales 162
5 Day Moving Average: Listings 278
SALES
Sales so far 2806
Projection for rest of month (using 5day MA) 325
Projected month end total 3131 +/- 68
NEW LISTINGS
Listings so far 5121
Projection for rest of month (using 5day MA) 557
Projected month end total 5678 +/- 31
Sell-list so far 54.8%
Projected month-end sell-list 55.1%
MONTHS OF INVENTORY
Inventory as of February 23, 2011 12621
MoI at this sales pace 4.03
February 24th, 2011 at 1:19 pm
Also on page 3:
"Residents Request same Fair Treatment as UBC Students"
http://www.myuna.ca/wp-content/uploads/2010/04/Ca…
February 24th, 2011 at 1:17 pm
Hospice News !!! Don't miss them
Residents Receive UNA Support In Quest to Revise Hospice Location
President Predicts Hospice Site Debate Likely Meet in April
Also an interesting article about a Chinese developer building the next mixed residential complex on campus.
http://www.myuna.ca/wp-content/uploads/2010/04/Ca…
February 24th, 2011 at 12:16 pm
Haven't seen Mr. B. so here are Larry's dailies.
Dailies – List | Sold
Vancouver East & West*
New Listings – 73
Back On Market Listings -1
Price Changes -20
Sold Listings – 49
Vancouver All Areas*
New Listings – 280
Back On Market Listings – 3
Price Changes – 67
Sold Listings – 137
*Attached & Detached – Date: 02/24/2011 Time:19:35 Pacific YatterMatters.com:Courtesy REBGV. Data believed to be accurate but is not guaranteed.
February 24th, 2011 at 10:23 am
Test
February 24th, 2011 at 8:51 am
@space889: I agree with some of what you say, but you're simply wrong about the causes/triggers of revolution. Why in the Middle East right now? If you're a staunch supporter of Bush and Blair you're arguing (incorrectly) that it was their decision to bomb the crap out of Iraq about eight years ago that produced the current moment in Middle Eastern politics. Did the Tunisians and Egyptians wake up en masse one morning a month ago and decide for the first time that they wanted democracy?
I'm not going to get into the history of political revolutions, but these events usually happen when general economic levels are rising and demands from the people, which are also rising, become increasingly likely to be unmet.
In addition, the (potential causal) role of democracy in revolutions is also not nearly as apparent as it may seem. Egyptians weren't necessarily clamouring for democracy. Had the Mubarak regime been able to allow Egyptians to at least maintain, let alone increase, their standard of living, there would have been no protests. Young, disaffected populations with rising demands (that are being unmet) can be the triggering agents of revolutionary change. Look for young, increasingly frustrated–economically and sexually (in light of China's one-child policy) –men to act as the agents of change in China.
The reason that revolutions don't occur in democratic systems is because democratic regimes are generally good at fulfilling individuals' needs, not because people are more generally inclined towards democracy. Democratic regimes are also more responsive to grievances and they have more efficient mechanisms and institutions in this regard.
I don't understand this quote:
The last time there was a lack strong central government was during the protracted civil war (1927-1949). So since 1949, there has been a strong central government for more than 60 years now. I doubt that the vast majority of Chinese have experienced anything like a power vacuum in their lifetime. Moreover, it was this strong central government whose policies unwittingly caused the deaths of tens of millions during the Cultural Revolution.
Finally, the number of riots in China has been increasing rapidly over the last few years and the inflationary pressures are not going to help. I'll leave you with this:
http://www.southasiaanalysis.org/%5Cpapers38%5Cpa…
P.S. Sorry for high-jacking the thread. Back to chopper-flying Chinese real estate agents now.
February 24th, 2011 at 8:45 am
@vreaa:
Thank you very much!
February 24th, 2011 at 8:44 am
@scullboy: The point of investing, such as in commodities, is not to consume it, but to hold it speculatively and resell it. When you invest in oil futures, you don't want 10 barrels of crude on your doorstep, you just want to roll the contract over to the next month. There is no expectation of delivery.
February 24th, 2011 at 8:40 am
@YLTNboomerang: "I gotta say that it is the most messed up communist state in existence!"
Do you really think China is a communist state like, say, Cuba? Come off it.
Significant income disparity can occur during fast economic growth spurts. Not saying it's unavoidable but the US, UK, and other countries experienced (and arguably are currently experiencing) similar disparities.
Bouts of inflation are worrying for the Chinese politburo because they can lead to significant capital misallocations and popular unrest. The politburo should know: income disparity was a large reason they came to power 60 years ago!
February 24th, 2011 at 8:38 am
"Canada has its warts too: first nations reserves have significant economic, social, and health problems…"
Hmmm…and most of those things are looked after.
Wish I didn't have to pay taxes, got free university…
So, vote me down. Go ahead.
February 24th, 2011 at 8:31 am
@Best place on meth: "They're a joke."
Canada has its warts too: first nations reserves have significant economic, social, and health problems. While the extent of the problem is not the same as in China, the same principle applies.
I've done business with firms in China and working conditions vary significantly. In one specific case, the parts we had manufactured there required specific skills to build so turnover was kept to a minimum and as a result conditions weren't that bad.
It's a mistake to paint the entire country with on brush, as your comment, on its surface, is doing. The owners and workers of the factory we used deserved every penny we gave them. Is it wrong for some of them to turn around and buy a Dunbar house close to St. Georges?
February 24th, 2011 at 8:26 am
#95 space889 Says: "Have it occurred to you that maybe, just maybe, part of the big reason why the quality sucks is because the foreign companies mandate it?"
Or maybe not. The only two people I know who rolled out Mainland manufacturing initiatives both described the travails of avoiding being fucked, like paying foreign private school tuition for a plant manager's daughter or preferring to hire foreign managers when possible because they're outside the local bribe syndicate. Certainly not all plants are the same but blaming the clients is as laughable as it is ludicrous. Entire third party quality assurance industries have sprung up to assist outsiders get what they order. Nice try.
February 24th, 2011 at 8:16 am
@space889:
Where did I do this? Go back and read what I wrote; nowhere did I compare China to the dictatorships of the Middle East.
February 24th, 2011 at 8:15 am
Oh yeah, anyone noticed that TSX was down a lucky 88.88 points!!! OMG how luck is that!?! Tomorrow will probably see some heavy buying in TSX by the Chinese!
February 24th, 2011 at 8:14 am
@scullboy: Errr….I don't think the wine would still be an investment after you drink it! If you can't drink the investment then why would you need to learn to enjoy drinking wine? I can see how enjoying wine would help with picking the right investment in this case but it's not really necessary.