Yesterdays surprise announcement of a 15% tax on purchase of real estate by foreign buyers has some people cheering, some jeering and some people scratching their heads. Here are a few thoughts pulled from yesterdays thread:
Franko sees it as a positive for affordability:
The province taxing foreign buyers.
The city taxing vacant properties.
The CRA going after tax evaders.
It all would have been unthinkable a year ago, but the biggest hit by far will come from China clamping down on money fleeing the country. HAM is soo over….and it will lead the stampede to the exit.
Patriotz is a little more sceptical:
Christy wants to eat her cake and have it too, i.e. be seen to be “doing something” in Vancouver while keeping the floodgates open and directing the money to Abbotsford and points east – which is where her greatest electoral support is. And get extra revenue from foreign buyers who just have to buy in the taxable area.
MarKoz points out the obvious:
Foreign speculators could avoid paying the tax by getting friends or family who are permanent residents to buy on their behalf. Or the tax may lead to inflated housing prices in cities such as Victoria, Kelowna or Toronto.
LS in Arbutus says maybe not so easy to avoid the tax:
I wanted to point out that there are anti-avoidance measures in the legislation. An Anti-Avoidance Rule is typically a statutory rule that empowers a revenue authority to deny taxpayers the benefit of an arrangement that they have entered into for an impermissible tax-related purpose. Soooo I guess you can still gift your wife/kids money to buy a house, but you generally much more shenanigans than that would be caught in this type of rule. They are very wide sweeping these rules.
bullwhip29 points out how lucky some politicians are that the tax only applies to one area:
as luck would have it, mike de jong has all his eggs located just outside of greater vancouver and wont be affected by any of this (or least not in a negative way)
No matter what your thoughts are on this issue you’ve got to agree it’s pretty much the big news story in the Vancouver real estate market lately and it’s likely going to take a while to see what sort of effect it has on the local and related markets.