Rabidoux in Vancouver / HK property tax
A couple of news tidbits today:
First off Ben Rabidoux will be putting on a seminar in Vancouver about how to get rich flipping presales condo contracts.
At least I assume that’s what he’ll be talking about, what else could you talk about at a Vancouver real estate seminar?
Ben will be joined by David LePoidevin and they’ll actually be talking about the current state of the market, what comes next and what a ‘hard landing’ would look like for the economy and your investments.
Could Canada be facing a housing crash similar to what the US experienced? As Canada’s most expensive real estate market, how will Vancouver fare? What are the broader implications of a significant housing correction on the Canadian economy and job market? What would a housing crash mean to your investment portfolio, and how can you protect yourself?
The event is at the Westin Bayshore on Wednesday November 28th at 7pm. Registration is free, but first come first served. There will be a Q&A session and a speculator dunk tank. (Sorry, made that last one up.)
Also in the news, Mike sent in this note about a new property tax imposed in Hong Kong for non-resident buyers. Non-local and corporate buyers will now pay an extra 15% tax on purchase of property. Hong Kong joins similar moves by Singapore and Australia to squeeze extra money out of foreign investors and give local buyers a market advantage to housing.
The 15 percent tax “will be effective in curbing foreign demand – mostly from mainland buyers – and avoiding ‘hot money’ influx into the property market,” Alfred Lau, a Hong Kong-based analyst at Bocom International Holdings Co., wrote in a report today. “However, local demand is not affected.”
The new property tax doesn’t apply to Hong Kong permanent residents. Inhabitants need to live in the city for seven straight years to be eligible for permanent residency, according to immigration rules, while Chinese citizens born in the city are automatically granted that status.
October 30th, 2012 at 12:25 am 1
Canada’s deputy minister of finance says he isn’t convinced tighter mortgage rules his department announced in June are behind the recent cooling in the housing market.
Mr. Flaherty: “I’d certainly agree that the full impact of the changes to mortgage rules has not been felt yet”
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/finance-official-questions-link-between-cooling-housing-market-mortgage-rules/article4741736/
Well-loved. Like or Dislike:
24 
0
October 30th, 2012 at 1:39 am 2
those HKers are a bunch of racists
http://youtu.be/T-02lNhR8j0
Hot debate. What do you think?
15 
1
October 30th, 2012 at 5:27 am 3
@VMD:
Whaddaya know, I agree with Mr. Flaherty 100%. Just you wait.
As for HK’s 15% tax, I think BC ought to charge 15% on all transactions (that’s right a 15% PTT), and rebate it back to buyers on their income tax returns provided they declare an income commensurate with the value of the property purchased.
Well-loved. Like or Dislike:
36 
3
October 30th, 2012 at 6:58 am 4
Our government would not have the balls to put a foreign property tax out there. We are a haven for hot money. The OECD used to criticise Canada about its lax regulations.
I know – I used to sit in on the money laundering meetings at the OECD.
Well-loved. Like or Dislike:
50 
0
October 30th, 2012 at 7:00 am 5
@patriotz: “As for HK’s 15% tax, I think BC ought to charge 15% on all transactions (that’s right a 15% PTT), and rebate it back to buyers on their income tax returns provided they declare an income commensurate with the value of the property purchased.”
That would be great for seniors and other low income people who own homes and have to move for some reason.
Hot debate. What do you think?
10 
4
October 30th, 2012 at 7:43 am 6
@Anonymous: “That would be great for seniors and other low income people who own homes and have to move for some reason”
Which is why a 15% PTT is a non-starter. The refrain of the provincial and municipal elections should be a clue the electorate is incapable of dealing with the root of the problem. It would be inconvenient to balance sheets if they did.
Hot debate. What do you think?
18 
0
October 30th, 2012 at 7:47 am 7
http://tinyurl.com/98u6k22
Benjamin Tal says, relax, fuhgeddabotit, no speculation here.
Oh sure, prices might drop for a couple of years but that’s about it.
Bwahaaaahaaaaa.
Well-loved. Like or Dislike:
21 
0
October 30th, 2012 at 7:47 am 8
@patriotz:
“As for HK’s 15% tax, I think BC ought to charge 15% on all transactions (that’s right a 15% PTT), and rebate it back to buyers on their income tax returns provided they declare an income commensurate with the value of the property purchased.”
What an excellent idea. This would also help prevent the flow of drug money into property- both high end and interior ranches. Any-one who doesn’t claim the rebate should set off red flags to enquire how that money was obtained.
however this is too radical and logical for our politicians.
Well-loved. Like or Dislike:
34 
2
October 30th, 2012 at 7:51 am 9
15% may seem expensive to us, but if you’re trying to launder money or you’re trying to move the money to a safe haven, then the tax is just another cost of doing business.
We pay 12 percent on candy, that has not stopped us from buying chocolate bars.
Well-loved. Like or Dislike:
27 
0
October 30th, 2012 at 7:54 am 10
@metalhead: From the Globe:
No U.S.-style housing crash for Canada: report
Some tidbits:
I’m still waiting for that one soft landing example… Haven’t seen one yet…
Well-loved. Like or Dislike:
26 
0
October 30th, 2012 at 7:59 am 11
HK prices are up 20% year on year_ the market conditions are quite different
Like or Dislike:
0 
3
October 30th, 2012 at 8:06 am 12
@Victoria: Any juicy OECD Canada laundering annecdotes?
Looking on the OECD website I found a fairly generic but detailed report on real estate money laundering transaction techniques related mainly to land purchase, development, and redevelopment:
http://www.oecd.org/ctp/exchangeofinformation/realestatesector-taxfraudandmoneylaunderingvulnerabilities.htm
Please tell us more about your OECD experience as it relates to Canada. If anonymity is a factor in your reply, I’ve determined that the vancouvercondo.info server is presently located at:
Host Name: apache2-jolly.alnair.dreamhost.com
IP Address: 173.236.203.17
Country: United States
Country code: US (USA)
Region: California
City: Brea
Postal code: 92821
Futher, and thankfully, despite VPD Chief Jim Chu’s effort so far to install domestic internet surveillance at your local Canadian ISP (aka Bill C-30), the facility to record the ordinary messages of concerned citizens originating from your IP for future data mining does not exist. Hopefully that is assurance enough for you post something interesting to this forum.
Hot debate. What do you think?
16 
0
October 30th, 2012 at 8:27 am 13
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
7 
20
October 30th, 2012 at 8:54 am 14
@Anura Femur:
“I doubt any of you would know a mainland Chinese if one bit you on the nose.”
OH MY GOD! THEY DO THAT?!? I thought it was just shark fins, bear gall bladders, tiger penises, rhino horns on so on.
Thanks for the warning Anura.
Well-loved. Like or Dislike:
31 
8
October 30th, 2012 at 9:03 am 15
Victoria: “Our government would not have the balls to put a foreign property tax out there. ”
i am not sure even if we are allowed under NAFTA? We would have to consult first our masters in Washington.
Hot debate. What do you think?
19 
3
October 30th, 2012 at 9:29 am 16
“We would have to consult first our masters in Washington.”
I’m sure they wouldn’t mind if you went through their top bureau chief in Ottawa. Harper something or other…
Hot debate. What do you think?
13 
10
October 30th, 2012 at 9:31 am 17
“Mr. Flaherty: “I’d certainly agree that the full impact of the changes to mortgage rules has not been felt yet”
A liar and a creep all rolled into one.
Hot debate. What do you think?
13 
4
October 30th, 2012 at 9:41 am 18
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
2 
15
October 30th, 2012 at 10:03 am 19
Doesn’t that new 31 year investment deal with China impact our abilities to curb foreign speculation?
Well-loved. Like or Dislike:
29 
0
October 30th, 2012 at 10:11 am 20
And to further put a dent in the BC real-estate market, if Washington State legalizes pot this will further reduce demand. Unless everyone growing pot moves over to meth labs.
Well-loved. Like or Dislike:
29 
0
October 30th, 2012 at 10:38 am 21
@patriotz: “I think BC ought to charge 15% on all transactions (that’s right a 15% PTT), and rebate it back to buyers on their income tax returns provided they declare an income commensurate with the value of the property purchased.”
I know you mean to be flippant and funny, but I just find this utterly idiotic. This is a free country. You’re allowed to have assets without a commensurate income. Fool!
Hot debate. What do you think?
14 
20
October 30th, 2012 at 10:54 am 22
@Anonymous: I agree 100%. What happens in the event of an inheritance? Friends of mine purchased a house that was over $1.4M. How…the husband was sole heir to his parents’ estate. They used that money and sold their townhouse to make the purchase. Their incomes would never support a purchase of a house like that if they were to try to finance it.
Hot debate. What do you think?
9 
4
October 30th, 2012 at 11:08 am 23
http://en.wikipedia.org/wiki/Stereotypes_of_East_Asians_in_the_United_States#Perpetual_foreigner
same goes for Canada. half of this city thinks the other half are foreigners. they give account after account of debt driving misadventures of their own, yet constantly point the finger at the ‘other’. it’s toxic, and it seems to run deep in this board in particular.
Hot debate. What do you think?
8 
6
October 30th, 2012 at 11:27 am 24
@Not much of a name…: “the husband was sole heir to his parents’ estate. They used that money and sold their townhouse to make the purchase.”
Well then the inheritance was part of his income making it able to buy the house. It’s on record, just like lottery winnings, business income or salary.
I don’t see what the problem is, all Patriotz proposal would do is make criminals pay slightly more for property than someone who shows where the money comes from.
Hot debate. What do you think?
17 
5
October 30th, 2012 at 11:29 am 25
@Veni Vidi Vci: “I don’t see what the problem is, all Patriotz proposal would do is make criminals pay slightly more for property than someone who shows where the money comes from.”
You do realize it’s quite possible to be (legally) wealthy and yet receive no income?
Hot debate. What do you think?
4 
7
October 30th, 2012 at 11:40 am 26
@Not much of a name…:
@Anonymous:
re: Patriotz’ funny/interesting 15% RE PTT idea per inheritance scenario.
I was wondering how long it would take for somebody to notice it might be lopsided. Let’s consider what incentives might arise.
Suppose you have a pile of cash enough to just buy a big house. Under the strictest interpretation of this tax credit idea, perhaps you would then have to justify income sufficient to cover normal mortgage payments in order to claim the full tax credit.
I think this would create an incentive to put at least part of the money to work in business(es) or cash positive financial instrument(s) rather than just using the full inheritance to drive up prices in the local real estate market. It makes life complicated for lottery winners and heirs, but they lose nothing if they put some of the money to work outside of real estate.
Can anybody think of another unintended consequences/incentive scenario besides the windfall/old money problem?
Hot debate. What do you think?
8 
3
October 30th, 2012 at 11:41 am 27
@Vote Down The Facts: You wouldn’t even need to be wealthy to be caught by patriotz’ dumb tax. I know someone who spent decades working on an Alaskan trawler, squirrelling away a few thousand dollars a year in no risk savings accounts, and when he finally retired he had enough to buy a small condo and pay cash. In the year he bought his place he did not have income commensurate with even his modest condo.
Hot debate. What do you think?
9 
6
October 30th, 2012 at 11:49 am 28
Off-topic: We’ve been looking for a rental in our East Van neighborhood for some time now, about 6 months (not desperate, waiting for the perfect place to come up). During the summer, there wasn’t too much on the market, but lately I’ve been seeing a considerable number of units for rent, that were mostly for sale during the summer (I check this by googling the address once I schedule a viewing). These former sellers seem to have now given up on possibly selling their places, most realize that the market is slow and have thus decided to “keep the place as an investment while the market recovers.” Not sure if it’s just the time of year, but the rental market in our area also seems to be soft-I keep seeing the same places advertised for rent over and over again on craigslist, often with reduced rental prices. These particular sellers don’t seem to be having much luck, renting or selling!
Well-loved. Like or Dislike:
34 
0
October 30th, 2012 at 11:54 am 29
@patriotz:
How about we just let people live their lives with less interference from government?
The tax code is complicated enough as it is without trying to add all sorts of social engineering schemes into the mix.
Hot debate. What do you think?
16 
16
October 30th, 2012 at 12:03 pm 30
@More Data Please: The government would sit on millions, if not billions, of taxpayer money just waiting to refund it back to purchasers. It would take multiple years to refund the tax back to the purchaser. That’s not an effective use of money either.
Like or Dislike:
3 
2
October 30th, 2012 at 12:09 pm 31
@Dave: “How about we just let people live their lives with less interference from government?”
Exactly. It’s funny how so many speak out against the CMHC yet consider government intervention from the opposite direction to be appropriate.
Hot debate. What do you think?
18 
9
October 30th, 2012 at 12:35 pm 32
@Not much of a name…: re: “waiting to refund it back to purchasers”
Yes. Good point. BC’s record on the HST reversal supports your contention.
Patriotz’ proposal wasn’t long on this detail. Perhaps the entire credit could be refunded on the very next tax return? Probably impractical.
On the other hand, it sure would lessen the demand for expensive RE. The incentive would be to “right size” your home rather than buying as big as you can possibly afford. There would also probably be a stronger market for 2-3BR units in multi-unit buildings rather than detatched homes with 2-3BR.
Also consider the situation where BC must introduce a 15% RE PTT to stay even with other jurisdictions. Would it be better to refund tax credits or take it all into general revenue? Tax credits would be an easier sell to voters than a revenue positive tax.
@Dave’s “social engineering” objection is also well taken. We certainly already have some crazy incentives like the CMHC. The provincial government can’t do anything about the CMHC, but a RE PTT is within their authority.
I’m not advocating either way, but if there is a new rule, the simplest one is preferrable.
I hope others will chime in on this. There are some good comments so far.
Like or Dislike:
6 
0
October 30th, 2012 at 12:38 pm 33
@Vote Down The Facts: ” It’s funny how so many speak out against the CMHC yet consider government intervention from the opposite direction to be appropriate.”
LOL how many times have I seen people walk into that one. Governments are heavily involved in the residential property market and they will be for at least another decade if not for the rest of my life. By them backing mortgage bonds and underwritten insurance schemes they’re in with housing whether they like it or not, either through CMHC schemes or a strong regulatory/tax framework.
Hot debate. What do you think?
18 
1
October 30th, 2012 at 12:54 pm 34
@pricedoutfornow:
It was a great feeling seeing my new landlord taking down the large for-sale sign on the front yard the day my lease started (few months ago).
He also tried to talk me into buying this same house, at a “special bargain price”, saying “it’s only going to get more expensive next year, I’m almost selling at build cost!”. I politely declined.
It’s a one year old house (he tore down the old one and rebuilt) and the laminate floor’s already squeaking and uneven, with noticeable gaps under baseboards. The plasticky faux-granite floor/bath tiles are somewhat tacky as well. He still has a couple other house projects near completion by year end, all built by the same group of (East Indian) builders. I can only wish him good luck.
Hopefully in a prolonged RE bear market, we can expect better construction quality to compete for potential buyers.
Well-loved. Like or Dislike:
39 
0
October 30th, 2012 at 1:01 pm 35
@More Data Please:
That’s my point. The amount that the “average” person would pay in PTT at 15% would be far in excess of their income tax, probably two or three times. So, in effect, to refund the amount on the very next return would be for the government to simply write a cheque in the amount over and above what was collected in income taxes. Why collect it in the first place?
A person with a $60k per year pays about $15k per year in income tax. If that same person would purchase a $300k property (not unlikely) the PTT would be $45k or three times the amount the person pays in income tax. That will be three years to refund the money.
Like or Dislike:
0 
0
October 30th, 2012 at 1:02 pm 36
@anonymouse
‘ half of this city thinks the other half are foreigners.’
It all depends what you mean by ‘Chinese’. Some people might read this as ‘looks Chinese’, in which case they make it a race issue. Other people might consider that anyone who has been here long enough to adopt the values and the language of this country is ‘Canadian” and therefore ‘Chinese’ means someone recently arrived from China, in which case it is not about race but about citizenship (i.e. a tiny % of the population).
I often encountered that dual definition when talking to people.
It is also interesting to hear what Chinese Canadians have to say about the influx of ‘Chinese from China.’
Hot debate. What do you think?
12 
2
October 30th, 2012 at 1:08 pm 37
@jesse: “LOL how many times have I seen people walk into that one.”
You don’t see the difference between market regulation and deliberately trying to drive prices one way or the other?
Like or Dislike:
2 
7
October 30th, 2012 at 1:15 pm 38
@Vote Down The Facts: “You don’t see the difference between market regulation and deliberately trying to drive prices one way or the other?”
Either way the government is involved.
Hot debate. What do you think?
14 
0
October 30th, 2012 at 1:31 pm 39
For any of you ‘money to your mouth’ types, I found a new market where you can trade futures based on Vancouver’s Home Price Index.
http://www.intrade.com/v4/markets/contract/?contractId=734327
No volume yet though.
Like or Dislike:
4 
4
October 30th, 2012 at 1:35 pm 40
@painted turtle:
There’s an entire cohort of men and women in Chinatown who’ve lived here for many decades but speak little or no English. They’re “Chinese” (and by implication, not Canadians) according to either of your scenarios. I think that rather strengthens the Anymouse‘s point.
Like or Dislike:
2 
3
October 30th, 2012 at 1:53 pm 41
Canada – money laundering ….
http://www.theglobeandmail.com/news/politics/money-laundering-going-largely-unpunished-in-canada/article584747/
Hot debate. What do you think?
12 
0
October 30th, 2012 at 1:55 pm 42
Canada is not doing very well.
http://www.theglobeandmail.com/news/politics/canada-says-it-is-plugging-money-laundering-loopholes/article584741/
I can’t find any OECD documentaiton at the moment… it was around 2007 I read the articles. I left the organisation 14 years ago.
Like or Dislike:
8 
0
October 30th, 2012 at 2:15 pm 43
@Dave: Intrade Vancouver RE binary options.
FROM intrade.com:
FROM housepriceindex.ca:
Some problems, but interesting.
Like or Dislike:
5 
0
October 30th, 2012 at 2:19 pm 44
Found a summary about corruption laws in Canada
In early 2011, the OECD issued a report criticising Canada for failing to enforce its anti-corruption laws. Since then, Canada has moved to step up enforcement. Canada’s International Anti-Corruption Unit, which had been established in 2008 by the Royal Canadian Mounted Police began achieving results.
http://www.thelitigator.ca/2012/10/anti-corruption-canada-gets-serious-september-2012/
Like or Dislike:
4 
0
October 30th, 2012 at 2:41 pm 45
@Victoria: re: “summary about corruption laws in Canada”
Thank you for posting that! Quote:
It would be interesting know if bribes or other considerations payed to executives (or state officials) of state owned firms in China (SOE’s) holding Canadian assets, could be reached by Canadian law. If some siphoning or circumvention scheme was uncovered, would it be possible or even desirable to bring charges against a Politburo official or Chinese national that never sets foot in Canada or extraditable territory?
Like or Dislike:
7 
1
October 30th, 2012 at 2:43 pm 46
There is an interesting subtext to Patriotz’s suggestion. Why do we tax income proportionately more than wealth? It is possible, indeed probable, that our current tax code takes income away from a hard working family living in a rental in East Vancouver in order to provide income assistance to a retired senior living in a mortgage-free house on West 37th. This seems a poor system of redistribution to me. It also penalizes people who have high earnings for a short period of time (like professional athletes). It is not clear that it is social optimal to discourage risk taking in this way.
Frankly, a higher tax on property (or property transfers I suppose) would implicitly tax wealth and this might be better than our current income taxation system, regardless of the ill-gotten gains perspective.
Hot debate. What do you think?
15 
3
October 30th, 2012 at 3:16 pm 47
@shriller:
Isn’t wealth generated with after tax income?
Hot debate. What do you think?
4 
7
October 30th, 2012 at 3:29 pm 48
Here we go again…
Hotel Georgia condo buyers sue to opt out of presale contracts as Vancouver real estate market sags
http://www.biv.com/article/20121030/BIV0111/310309943/hotel-georgia-condo-buyers-sue-to-opt-out-of-presale-contracts-as
Well-loved. Like or Dislike:
31 
0
October 30th, 2012 at 3:32 pm 49
@shriller: See Australian documentary:
http://topdocumentaryfilms.com/real-estate-4-ransom/
Your sentiments are discussed in some detail in the above 40 minute online documentary.
I would be very interested to read any critiques of the supply side tax reform proposed in the documentary. The basic but radical idea is to change the tax base from income to land.
One criticism: The documentary reveals that HK uses a land based tax revenue system. Remarkably, we just learned that HK authorities apparently needed to apply still more tax to bring prices under control.
Like or Dislike:
5 
0
October 30th, 2012 at 3:32 pm 50
@shriller: “It is possible, indeed probable, that our current tax code takes income away from a hard working family living in a rental in East Vancouver in order to provide income assistance to a retired senior living in a mortgage-free house on West 37th. ”
Certainly possible, but then while the Senior was accumulating all that ‘wealth’, he may very well have been providing income assistance to the working family in a rental in East Vancouver. So are you suggesting the Senor should be taxed twice – once for generating a high income and once for holding on to it?
Like or Dislike:
4 
3
October 30th, 2012 at 3:35 pm 51
@Anonymous:
” In the year he bought his place he did not have income commensurate with even his modest condo.”
But he does have a legal record of his income and savings in past years. As do seniors. I didn’t mean the the declared income had to be solely in the year of purchase – that makes no sense.
Like or Dislike:
5 
3
October 30th, 2012 at 3:38 pm 52
@Not much of a name…:
“The government would sit on millions, if not billions, of taxpayer money just waiting to refund it back to purchasers.”
The government does not “sit on” any appreciable amount of money. It’s running a deficit you know, which means that’s it’s always borrowing. In times when it isn’t, extra cash is used to retire bonds, which are always coming up for renewal.
Like or Dislike:
4 
2
October 30th, 2012 at 3:40 pm 53
@ not much of a name.
That strawman, huh. Labour income is generated by labour. Wealth is “generated” by lots of things. Suppose that your claim that wealth is generated by after-tax income were true. Then wealth should be correlated with the level of the savings rate. It is not historically not well related to wealth (see for instance the 00′s decade). Ergo, no, wealth is not past savings of after tax income.
Wealth is a collection of assets whose price can vary without any input from after-tax income. That is why it can be inherited. I don’t see any reason why implicit income gained from price appreciation should be untaxed if we tax income from labour effort.
Like or Dislike:
7 
0
October 30th, 2012 at 3:41 pm 54
Hotel Georgia
This is great news. I wonder when the first crane will stop due to the bank cutting off the money?
Hot debate. What do you think?
17 
1
October 30th, 2012 at 3:42 pm 55
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
8 
18
October 30th, 2012 at 3:46 pm 56
@patriotz: Still a dumb idea. What if he doesn’t have a record of his earnings back in the 80′s? I, for one, don’t keep records that long.
Also, tax law and criminal law are separate beasts for a good reason. Don’t use taxes to punish suspected criminals. People should be punished for crime only when the crime has been proven beyond a reasonable doubt in a fair trial. People should not be put in a position to have to prove their innocence every time they invest in real estate.
Hot debate. What do you think?
6 
6
October 30th, 2012 at 3:48 pm 57
The point, anonymous, is that the senior should be expected to consume from his or her savings in retirement. That is the point of savings after all. If his or her savings is in property then he or she should be expected to arrange some way of extracting consumption from it. I fail to see why these savings should be protected in some way via the tax code.
But it is plausible that taxing property would work just fine for your senior if the tax was applied to transactions. Simply put the tax on the purchaser. She or he could sell and rent and never pay it. Or it could come from their estate at death. I fail to see why ensuring via the tax code that any heirs inherit wealth is socially beneficial if I might privately gain from such a system.
Like or Dislike:
2 
2
October 30th, 2012 at 3:49 pm 58
From the Wall Street Journal
In Vancouver, Home Sales Hit the Brakes
http://online.wsj.com/article/SB10001424052970203335504578088821389676846.html?mod=WSJ_hps_MIDDLENexttoWhatsNewsForth
Hey, if any govt. f$#%t@rds monitor this blog, bring in measures to restrict foreign ownership now!
I truly believe this city could erupt one day and the Vancouver Canucks won’t be to blame.
Well-loved. Like or Dislike:
25 
1
October 30th, 2012 at 3:50 pm 59
@Dave:
“For any of you ‘money to your mouth’ types, I found a new market where you can trade futures based on Vancouver’s Home Price Index.”
And what’s the consensus of this market?
Teranet HPI for Vancouver is now 168. That is, the “bearish” side of this bet wins if prices fall 25% in little over a year. I’m certainly not predicting that and I don’t think any of the regulars on this board are either. Which means I would be on the “bullish” side of it.
I’ve already pointed out the problem with this kind of futures market – it’s not like actual short selling, where any fall in price is a win for the bearish side of the trade. Everyone playing this futures market is a bear, and the two sides are bearish versus ultra bearish.
Hot debate. What do you think?
10 
2
October 30th, 2012 at 3:52 pm 60
@Anonymous:
” What if he doesn’t have a record of his earnings back in the 80′s? ”
CRA or IRS in the US does.
Like or Dislike:
5 
4
October 30th, 2012 at 4:05 pm 61
@shriller: “But it is plausible that taxing property would work just fine for your senior if the tax was applied to transactions.”
So, by inference, you’d be at ease with the Senior getting a tax credit if thy sold a property as a loss? How would maintenance deductions (i.e. expenses) work? In any case, you’re referring to taxing income realized as a result of the sale of a property that has increased in Value. Well, I actually agree with you on that, but I don’t think it’s fair to tax someone on on the notion that they may be wealthy because they’re sitting on a Asset that may be expensive today ( and expensive to maintain) but which may be worth less tomorrow. I’m also unconformable with the notion that an asset that rises due to a broad inflation has really risen in value you might be taxing inflation and that’s seems goofy to me!
Like or Dislike:
2 
2
October 30th, 2012 at 4:08 pm 62
Mark Carney says only a couple more years of ZIRP. Probably. Maybe.
Hot debate. What do you think?
11 
0
October 30th, 2012 at 4:25 pm 63
“Motivated” Seller Index hitting new highs:
Well-loved. Like or Dislike:
44 
1
October 30th, 2012 at 4:28 pm 64
Family income and income of individuals, related variables: Sub-provincial data, 2010
Once again, Vancouver has the smallest median income ($68,790) of any large CMA outside Quebec, except Abbotsford.
Well-loved. Like or Dislike:
26 
2
October 30th, 2012 at 4:34 pm 65
@shriller: Where did price appreciation enter the discussion?
Like or Dislike:
1 
1
October 30th, 2012 at 4:36 pm 66
Some tidbits from RE Talks, where bulls usually hang out and are not so happy these days…
And this one gotta hurt!
Ouch indeed… Renters, you’re losers lol!
Well-loved. Like or Dislike:
60 
2
October 30th, 2012 at 4:40 pm 67
@Anonymous:
” Don’t use taxes to punish suspected criminals. ”
Governments regularly collect withholding taxes on all sorts of transactions – like your pay cheque. Also Canada already collects a withholding tax on sales of RE which is owned by non-residents. The US collects withholding taxes on proceeds of all kinds of assets owned by non-residents. It’s not like I suggested something completely new.
It’s not about punishing suspected criminals, but about trying to keep people from evading taxes.
Hot debate. What do you think?
9 
5
October 30th, 2012 at 4:55 pm 68
This is just brutal… factoring in inheritance and/or lottery winnings to contribute to your retirement.
Buying overpriced RE won’t help.
http://www.vancouversun.com/news/national/Many+Canadians+rely+winning+lottery+inheritance+financial/7471603/story.html
Like or Dislike:
8 
1
October 30th, 2012 at 5:18 pm 69
@pricedoutfornow: If you go for one of these, make sure you get a lease for as long as you hope to stay there as these guys are going to freak out when they find that prices are in fact lower in the spring and will knee-jerk list.
Like or Dislike:
6 
1
October 30th, 2012 at 5:19 pm 70
New Listings 152
Price Changes 107
Sold Listings 96
TI:18695
http://www.paulboenisch.com
Well-loved. Like or Dislike:
110 
3
October 30th, 2012 at 5:21 pm 71
Now add all the Asian countries that don’t allow foreign property investment at all, and it’s going to be very hard for anyone to complain when Canada finally follows with something similar.
Hot debate. What do you think?
17 
1
October 30th, 2012 at 5:32 pm 72
@Makaya: “337k in 16 months.”
Tell us another story Santa
I love the smell of losers in the morning.
Well-loved. Like or Dislike:
30 
2
October 30th, 2012 at 5:40 pm 73
@Dave: re intrade. I blogged about this here: http://housing-analysis.blogspot.ca/2012/09/betting-on-vancouvers-house-price-crash.html
I think it’s long odds, but hey 2013 is probably going to be an odd year.
Like or Dislike:
8 
1
October 30th, 2012 at 7:30 pm 74
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
4 
18
October 30th, 2012 at 7:33 pm 75
A few more for fun: (just some random ones I found, I’m sure there are now literally hundreds of homes being relisted for a loss)
V961081 in Shaughnessy bought for $4.6 in Sep 2011
Assessed at $4.066
Listed at $4.288 sometime before March and now $3.988 since July
Estimated loss if sold for ask = $824K
V973380 in Mackenzie Heights bought for $1.92M May 2011
Assessed at $1.716M
Listed at $2.38M sometime before March and now $1.698 since September
Estimated loss if sold for ask = $317K
V971319 in Dunbar bought for $2.41M June 2011
Assessed at $2.286M
Listed at $2.448M in September and now $2.248 as of last week
Estimated loss if sold for ask = $282K
V953921 in Richmond bought for $1.168M Feb 2011
Assessed at $1.0297M
Listed at $1.26M sometime before March and now $950K as of June
Estimated loss if sold for ask = $277K
V975202 in Belcarra, Port Moody bought for $2.09M in Sep 2011
Assessed at $2.066M
Listed at $2.98M sometime before March and now $1.998M as of Oct 5
Estimated loss if sold for ask = $198K
Costs are based on PTT on purchase, standard realtor fees + HST on the sale and $4K in flat fees on the two legs of the transaction
Well-loved. Like or Dislike:
47 
1
October 30th, 2012 at 7:34 pm 76
@an observer:
That last one in Belcarra should have read $2.198M initial asking price
Like or Dislike:
3 
2
October 30th, 2012 at 7:47 pm 77
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
1 
18
October 30th, 2012 at 8:02 pm 78
@patriotz:
Lets face it your 15% Tax idea is a dumb one. The end result would be people borrowing more to buy a house then getting the money back later where in most cases the money would be pissed away and not put towards the mortgage. At minimum everyone would pay more interest. Just a bad idea on so many fronts.
Hot debate. What do you think?
7 
5
October 30th, 2012 at 8:08 pm 79
@an observer: “A few more for fun…”
But I thought all the Westside houses were bought up by rich Chinese foreigners looking to put their satellite family’s here? In reality there never was a mainland Chinese boom here in Vancouver. It was all local speculators (many who are Asian) who took the real estate industry bait and are now paying the price. Worked out good for the realtors though who collected those fat commissions.
Hot debate. What do you think?
12 
9
October 30th, 2012 at 8:17 pm 80
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
3 
20
October 30th, 2012 at 8:35 pm 81
And if news on the housing front were not bad enough…
Bank of Canada chief Mark Carney hints at interest rate hikes
Hot debate. What do you think?
9 
1
October 30th, 2012 at 8:48 pm 82
Ahem
jesse said on Oct 16: “I don’t think another 19K party is likely for the rest of 2012″
Hot debate. What do you think?
16 
7
October 30th, 2012 at 8:48 pm 83
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
2 
15
October 30th, 2012 at 9:07 pm 84
I liked this article about Australia posted on Garth’s site.
http://www.independentaustralia.net/2011/business/property/australia-does-have-a-housing-market-bubble/
Like or Dislike:
1 
1
October 30th, 2012 at 9:17 pm 85
@jesse:
“Inventory”
October 19th, 2012 at 6:17 pm
Inventory update 6pm
19,001 ; )
Hot debate. What do you think?
13 
3
October 30th, 2012 at 9:21 pm 86
#66 @Makaya: Ouch that’s got to hurt? 200k is a rounding error on a 2 million dollar home. Shows how out of touch people are. Do you think a celebrity selling a sprawling Beverly Hills mansion for 2 million dollars would be devastated by a loss of 200k? Then why would it be any different in Vancouver, where a run down shack is even more expensive?
What a bunch of rubes.
Hot debate. What do you think?
7 
6
October 30th, 2012 at 9:30 pm 87
@IamTheChimpman: “Of course there are thousands of CHINAmen and CHINAwomen setting up their families here while they stay in China to make tax free millions. We have FREE healthcare and FREE schooling, are you blind?”
Someone who makes ‘millions’ could care less about ‘free’ health care and schooling. They can afford to pay for better health care and schooling elsewhere. As an example the people in the US who make millions for the most part don’t want ‘free’ state run health care. They would prefer to just pay for premium care and get what they want when they need it rather than be on waiting lists and in obsolete hospitals. Contrary to what most Canadians think our health care and education systems are not the envy of the world. Certainly not for the wealthy. Maybe for the poor.
Hot debate. What do you think?
19 
5
October 30th, 2012 at 9:39 pm 88
So the freeze on the investor immigrant program ceases in January? Does anyone know how many people are admitted under this program per year? Pre freeze?
Like or Dislike:
6 
1
October 30th, 2012 at 10:09 pm 89
@Anonymous:
So true.
Super-rich usually stay in their own country, send their children to the best private schools locally or anywhere in the world and fly anywhere they need for healthcare to get the best treatments.
Don’t think that the motivation for buying an overpriced house is to be in the catchment area for a public school and to get free healthcare.
Hot debate. What do you think?
13 
2
October 30th, 2012 at 10:53 pm 90
Expect more of these presale lawsuits as prices drop.
http://www.biv.com/article/20121030/BIV0111/310309943/hotel-georgia-condo-buyers-sue-to-opt-out-of-presale-contracts-as
Like or Dislike:
5 
0
October 31st, 2012 at 12:07 am 91
@Anonymous:
Why is that goofy? When you sell assets, do you get to inflation-adjust your cost basis? Inflation is taxed on every transaction already.
Like or Dislike:
1 
2
October 31st, 2012 at 12:21 am 92
@IamTheChimpman:
OMG I’M INVITED TO THE PARTY??
what are you putting in the punch?
OMG i feel so dizzy
what are you doing to my clothes, i can’t keep my eyes open..
Like or Dislike:
3 
1
October 31st, 2012 at 12:31 am 93
@jesse: re: @Dave: re intrade. 2013
Instead of messing around with a fly by night Irish bookmaker, why not open a cash account with National Bank and place a small bet on the Teranet 2013 Vancouver forward contract. There could be some nice advantages.
(1) National Bank (Montreal) is subject to Canadian judicial and regulatory regime. The contracts aren’t normal securities and thus likely have to be opened and closed on the Teranet exchange, but at least you can complain to OSFI and have legal standing in the courts.
(2) Teranet contracts are less transparent than the Case Shiller house futures on the CME, but you can probably place a 1/10 ($10K) or even 1/20 ($5K) contract bet with Teranet (1 contract = $100K notional value). Thus even with illiquid (large bid/ask spread) on the Teranet quotation market, your account won’t change that much with a fractional contract.
(3) Teranet contracts expire December each year and are far more like ordinary futures than the single strike binary option contract on Intrade. If Intrade was serious, they’d offer more than a single 121 strike price. As I pointed out earlier (seemingly unnoticed) Intrade’s Mickey Mouse bookmakers don’t even understand that Teranet prohibits use of their index for unapproved linked financial instruments.
I don’t know the transaction fees on Teranet, but it couldn’t hurt to ask if you are seriously contemplating putting up a few hundred bucks either way with the Irish bookmaker Intrade.
Like or Dislike:
3 
0
October 31st, 2012 at 12:54 am 94
@IamTheChimpman:
http://youtu.be/iQNdi-fRExc
TOM VU, is that you?
Like or Dislike:
2 
1