Let the grandkids solve the TFSA problem.

If you’re someone who has your money somewhere other than Vancouver real estate you’re probably familiar with the TFSA.  And you probably know the limit has just been doubled to $10k a year.

Critics say this move only helps the wealthy and creates a future tax problem.

Joe Oliver says we should leave that problem for the PMs grand-daughter to solve.

On Tuesday’s The Exchange with Amanda Lang on CBC News Network, the finance minister told Lang that criticism of his recently unveiled budget is unfounded, arguing that the benefits for Canadians today more than offset any future revenue problems associated with it that may or may not ever come to pass.

The doubling of the TFSA limit to $10,000 per taxpayer every year was a core plank of Oliver’s balanced budget. But critics including the opposition parties and private sector economists have said the populist move will create a revenue problem for governments down the line, as more and more investments get protected from taxation.

So what do you think about the TFSA limit increase? A tool only for the wealthy or a bit of extra help for savers?

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Mister Obvious
Guest
Mister Obvious

“critics including the opposition parties and private sector economists have said the populist move will create a revenue problem for governments down the line”
———————

When has any ruling government ever cared about what effect new policy would have “down the line”? Concern for holding power has always been the principle driver of all pre-election policy. That dynamic has brought us to where we are today and I see no change.

Politics is an ugly, vindictive business. Campaigning has become an especially boring form of reality TV where politicians attempt to tweet themselves to victory over a one year period.

It’s vacuous and I don’t want to watch anymore.

bbb
Guest
bbb

A tool only for the wealthy? Savings $10,000 per year is a sign of wealth? Please get some perspective. The average Communist party official arrives with millions to invest in real estate.

Brian Ripley
Guest
Brian Ripley

To assuage our fears, the federal government will spend $7.5 million of our tax-payer money beginning next month to encourage us to continue voting for the present management.

One problem that is never discussed in the mass media is the lack of understanding about how a modern national economy like Canada, which has the authority to issue and enforce the use of its own currency, actually works.

The budget delivery yesterday reminded me of a piece I original posted in 2012 and is updated here:

http://www.chpc.biz/history-readings/myth-making

Since the Pit of Gloom in 2009, the Feds have been on an ideological mission to “balance” the federal budget by ignoring the Negative Trade Balance and by adding to the Negative Private Sector Balance.

Corrupt in Canada
Guest
Corrupt in Canada

Maybe we were wrong about Flaherty after all, look at this fuck wad Oliver.

piklishi
Guest
piklishi

Bank of England wasn’t stupid to recruit flaherty. This new guy is OK too, they are taking some important steps. Our economy will collapse if they don’t do this stuff right now. N the other hand its s patch and won’t solve the problem in tee long run. They are just praying now and hopefully it will work if they get re elected, otherwise they wouldn’t give a damn if the opposition takes over, cuz they will be screwed.bottom line politicians will be just fine, the rest of us will suffer.

patriotz
Member

@vangrl: “Patriotz this is the article that I took that 1/3rd quote from”

“Our analysis last year indicated that roughly one-third of buyers in Vancouver had some connection to mainland China,” Scarrow said.

That is the same source (MacDonald Realty) using very broad criteria, as I noted.

Since you brought it up again, how does it reconcile with the claims that 80% of buyers are recent immigrants?

patriotz
Member
By the end of 2011, approximately 8.2 million Canadians had opened a TFSA, and financial assets held in TFSAs were valued at over $62 billion. http://www.fin.gc.ca/taxexp-depfisc/2012/taxexp1202-eng.asp OK, so after 3 years less than 1/2 of eligible Canadians had a TFSA. At that point the cumulative maximum contribution was $15K. Yet on average, over all those who had a TFSA, the assets were less than $8K. If someone has more recent data, please show us, but I doubt things have changed. The overwhelming majority of Canadians have not been using the existing TFSA limit (and RRSP limit, this is well documented). People aren’t saving because they don’t have anything left over to save, and because they are depending on their house as their sole significant investment. Higher down payment requirements for mortgages would be a great incentive to save, as they… Read more »
elvince
Guest
elvince

I’m also going to benefit from this because I’ve always maxxed out my rrsp and tsfa contributions, but make no mistake, this is something for the wealthy. Nobody who makes less than 60k$/year can sock away 18% of gross income in rrsp, pay their income taxes then 10k$ in tsfa and still pretend to have a life.

I’m a lot more angry at income splitting though. That is complete BS.

elvince
Guest
elvince

The effect on rental RE is undeniable though: A few years from now, everyone will be able to protect a boatload of investment from the CRA through a tsfa. There’s just no way a rental property can comptete with an exchange-listed REIT if you have the units in a tsfa.

I don’t think it’ll have any effect whatsoever on listed REITs, but on rental properties? You can’t really raise the rental prices that much, so the only option to get back to a competitive after-tax Price/Earning ratio is lower buying prices for rental properties. My guess is as good as any though, given that many markets are already both cashflow and profits negative.

It’s funny, because in one option you get to burn money, and in the other, you get to make tax-free money. Yet, some people still choose the former.

VanRant
Member
VanRant

Its getting a little hotter for ham to hide in Canada. China released the 100 list most wanted international fugitive with photos, of which 26 are living in Canada (加拿大).
http://www.ccdi.gov.cn/xwtt/201504/t20150422_55183.html.

southseacompany
Member
southseacompany

“Home ownership still Canadians’ favourite investment vehicle”, Canadian Mortgage Broker News.

http://www.mortgagebrokernews.ca/news/home-ownership-still-canadians-favourite-investment-vehicle-190580.aspx

“Manulife also said the relentless rise in prices make many Canadians property rich, as they feel now is a good time to invest in it despite warnings of a housing bubble and overheating.”

southseacompany
Member
southseacompany

“New condo sales in Calgary have plunged 61% so far this year as oil slump sinks in”, Financial Post

http://business.financialpost.com/personal-finance/mortgages-real-estate/new-condo-sales-in-calgary-have-plunged-61-so-far-this-year-as-oil-slump-sinks-in

““The drop in absorption resulted from a combination of the investor segment disappearing, owner-occupiers without a need to buy opting to stay on the fence, and the increased MLS inventory eroding the competitive position of the new condo market.””

space889
Guest
space889

@Diadora – Canada don’t deport criminals to countries where they would face death penalty, possibility of torture, mis-trial, etc. So those 26 are pretty safe in Canada and probably why they choose Canada. Even if they get deported, it will probably be like Lai ChangXing where the case dragged on for like a decade at a cost to taxpayers in the hundreds of thousands of $$$$ in lawyer fees.

I don’t get excited about this cuz all these means if that more of my tax dollars are going to the pockets of slimeballs defending these scums.

space889
Guest
space889

@elvince – Me too, I benefit from both but I also think income splitting is a super bad policy. The worst thing is that it doesn’t even help most middle class where both people work and likely have similar wages, so the tax benefits is limited to a few hundred bucks at most. But for rich where one spouse is much less likely to work full time, it’s a boom.

vangrl
Member
vangrl

“Matthew Pulakkavil, a homeowner on Knight Street, says he recently heard about land assembly projects selling at three times assessed values due to their rezoning potential.

Pulakkavil, who bought his home for $430,000 a decade ago, “spoke to all the neighbours around me, many of whom have owned the houses for many years, and are very happy with their homes. But we all agreed we could afford to move if we got an offer close to what we are asking.”

Pulakkavil and four of his neighbours figure their homes, on 45-foot-wide lots, would normally each be worth $1 million. With their group offering, they are asking $2.5 million per property.

The homeowners are working without an agent, to save on realty fees.”

http://www.vancouversun.com/business/commercial-real-estate/Barbara+Yaffe+Vancouver+looks+cool+land/10995252/story.html?__lsa=e022-d387

geez what an emotional decision it must have been to decide to sell…

space889
Guest
space889

Garth has said that TSFA limit is no longer inflation indexed so if the Cons lose power, the limit will likely not be changed for a long time. Also, he thinks there might be a limit time max contribution limit.

space889
Guest
space889

@vangrl – And yet you are still going to blame all the high housing prices in Van East on evil rich Chinese immigrants? Cuz if it weren’t for the evil rich Chinese, these people wouldn’t be doing a land assembly and will be selling their house to the likes of you for only $1M?

Geez….

kabloona
Member
kabloona
Forget HAM or HIM (i.e. Hot Iranian money) – blame Mom and Dad instead: 😉 “Why your parents may be to blame for Toronto’s house bidding wars Some 42 per cent of first-time and move-up buyers expect their parents or relatives to help pay for their home, says BMO” http://www.thestar.com/business/2015/04/23/why-your-parents-may-be-to-blame-for-torontos-house-bidding-wars.html By: Susan Pigg Business Reporter, Published on Thu Apr 23 2015 “The Bank of Mom and Dad has become such an integral part of the Canadian housing market that almost half of today’s first-time and move-up buyers actually expect to be backstopped on the biggest purchase of their lives by their real-estate rich parents , according to a new BMO survey. Some 42 per cent of first-time and move-up buyers expect their parents or relatives to help pay for their home, according to the annual survey, released Thursday. That’s up… Read more »
kabloona
Member
kabloona

BTW, I think the last paragraph is the best in that Star piece I just posted….

“….That backstopping by Mom and Dad is widely seen as part of the reason bidding wars have become so frantic in the GTA market, where even first-time buyers are bidding tens of thousands – sometimes hundreds of thousands – over asking price on properties that even bank appraisers say aren’t worth the price….”

No, really….? Ha-ha-ha! 😀

Slagathor
Guest
Slagathor

….From a Vancouver realtor’s blog, a news entitled,
“Immigrants from China ranked second highest in number, and this helps to push the housing market”
China recently released a “China International Migration Report 2015″, in which it pointed out that the United States was the top choice, and Canada being their second preferred destination…..

That ridiculous! Evey Realturd know that everybody want to live HERE!

Slagathor
Guest
Slagathor

…Nobody who makes less than 60k$/year can sock away 18% of gross income in rrsp, pay their income taxes then 10k$ in tsfa and still pretend to have a life…

Just to clarify, you should be socking away money in a TFSA first before an RRSP.

Slagathor
Guest
Slagathor

…Bank of England wasn’t stupid to recruit flaherty….

Errr, actually, I believe it was the bank of Heaven that welcomed Flaherty.

Joe Mainlander
Guest
Joe Mainlander

@#15

What these homeowners fail to realize is that the City takes the ‘land lift’ from rezoning in DCC’s and other contributions. Developers make their profit from construction, not from the uplift through rezoning.

Same thing happened on the Cambie Corridor. Previous head planner Brent Toderian even warned those homeowners;

“House values skyrocket in Vancouver’s Cambie corridor”
http://www.cbc.ca/news/canada/british-columbia/house-values-skyrocket-in-vancouver-s-cambie-corridor-1.1102601

“He says the final prices didn’t appear to have factored in community amenity contributions the city negotiates with developers in order to pay for infrastructure and services associated with increased density

“People were overpaying for land — thus we sent messages out into the marketplace to say you’re going to have to adhere to the expectation of the plan if you wish to succeed in development.””

Mortgageslave
Member
Mortgageslave

@space889 – Funny that for somebody who hates garth so much you obviously read his blog daily. It’s obvious that your bitter for not following his advise. That and not many Agents like you like him. He’s made people like me and Vangirl who sold our condos years ago and invested in diversified portfolios very happy.

But for the most part I just skip passed all your comments if they haven’t already been voted down because you’re a complete F’in idiot.

Bear Vancouverite
Guest
Bear Vancouverite
@vangrl – I have some familiarity with the process. Realtors are trying to convince entire blocks to hold out for certain values per lot, but those values have no bearing on the realities faced by developers. Developers have to factor in the cost of construction and the total square footage they can build on the land (based on FSR). Areas like the Cambie Corridor are not being rezoned to huge FSR, they are being rezoned to medium density (eg mix of townhouses + lowrise). That’s why one block in the Cambie Corridor is actually going to be split into half townhouses and half low rise, the FSR won’t allow any more density. The experienced developers have well designed models that tell them exactly how much they can buy an assembly for depending on the final expected per square footage sale… Read more »
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