BC, Budget, politics, supply

$500 Million for Affordable housing

135
135 Comments

The BC government has announced that they will fund $500 million of affordable housing projects in the province using money brought in via property transfer taxes and the new foreign buyer tax.

Real estate related taxes are now the single largest revenue generator for the BC government, surpassing the 1.2 billion from gambling and all individual resource industry taxes.  In fact, when you combine all resource industry taxes the cumulative figure only exceeds real estate tax income by a few decimal points.

The BC real estate economy is possibly the finest example of a perpetual motion machine in existence. Taxes raised via real estate goes into buying and building more real estate. Win-win!

135 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
trackback

[…] –Mother of all stock market corrections –Alternative lending on the rise –OECD slashes Canadian outlook –Poloz signals delay in rate increase –Empty home tax –Variable rates will soar –Sold as percentage of inventory data –Canadians buying ‘too much car’ – […]

0
0
southseacompany

“Get ready for the mother of all stock market corrections once central banks cease their money printing”, The Telegraph

http://www.telegraph.co.uk/business/2016/09/20/get-ready-for-the-mother-of-all-stock-market-corrections-once-ce/

“In any case, the situation seems ever more precarious and unsustainable. Conventional pricing signals have all but disappeared, swept away by a tsunami of newly created money. Globally, the misallocation of capital must already be on a par with what happened in the run-up to the financial crisis, and possibly worse given the continued build-up of debt since then”

0
0
Its_the_ALR_stupid

I keep reading about it, but I still haven’t figured out what I need to do to personally get hands on some of that “newly created” “free” “easy” “tsunami” money. On the contrary, I find it increasingly hard just to pay the food bill lately.

Maybe I should just cave in and get a $2M loan at near 0% interest and buy a former crack shack in Strathcona.

0
0
No Money Down

That’s what you should have done. Not too sure about going forward.

0
0
JoTor

Mr. Robot seems to make more sense each day.. ha

0
0
rockerguy

Nobody knows when the next market correction is going to happen, nor how severe it’s going to be. It’s just as likely that we have a weird period of amazing stock market growth for another 10 years, as it is likely that there is another mega crash followed by years of stagnation. Truly, nobody knows, and anyone who says they know is full of shit.

Just buy index funds from Vanguard. Oh, and sell all your Canadian property.

0
0
Oracle

My God what have you done to the country once called Canada. Even assassins are coming in on 10 year visitor visas.

http://www.theglobeandmail.com/news/politics/chinese-agents-enter-canada-on-tourist-visas-to-coerce-return-of-fugitive-expats/article31981251/

Drug cartel members, spies, etc. Will all have access to Canada. Standards going down in a hurry.

0
0
Best place on meth

Good, we created this mess by allowing our country to become a dumping ground for china’s worst people, destroying the livability of our city in the process.

If china is willing to come and clean up our mess for us, let them have at it.

They can take all the lawyers defending these scumbags with them while they’re at it.

0
0
david

Canada is nothing if not the world’s most “mythical nation”. Other than being good at playing hockey, none of the narrative we tell ourselves and the world has any basis in truth. (World Peacekeepers?! Suuuure you are. )

We are an EXTREMELY poorly governed, deeply indebted country…..with decrepit infrastructure and programs that have all been “kicked down the road” for so long as to be too far gone to deal with.

Our politicians invent new things to focus on, because dealing with the necessary drudgery of “heavy lifting ” bores them.

“Forget roads and health care…Canada must single-handedly halt global warming”!

So we get a guy like the little prince, who has preened for his “next gig” with the UN since Day 1. And Canadians, in their unique brand of masochism/inferiority complex, cheer his every BM.

0
0
southseacompany

“Fed Leaves Rates Unchanged, Signals 2016 Hike Still Likely”, Bloomberg

http://www.bloomberg.com/news/articles/2016-09-21/fed-leaves-rates-unchanged-signals-2016-hike-still-likely

“A divided Federal Reserve left its policy rate unchanged for a sixth straight meeting, saying it would wait for more evidence of progress toward its goals, while projecting that an increase is still likely by year-end.”

0
0
HAMster

Who would think there could be such angst over a one quarter of one percent rate hike?

0
0
Its_the_ALR_stupid

“Fed Leaves Rates Unchanged, Signals 2016 Hike Still Likely”

In other news, a local shepherd boy has reported, for the 37th time in the last 8 years, that his flock is under attack by wolves.

0
0
southseacompany

“‘Free Money’ Interest Rates Are Nearing The Point Of No Return”, Huffington Post

http://www.huffingtonpost.ca/norman-levine/low-interest-rates_b_12103362.html

“”Free money” may seem positive, but it has caused many market distortions. Bond markets are in a bubble, and many stocks (especially large parts of the U.S. market) are very expensive, as earnings have not kept up with valuations and investors have put money in equities, especially high dividend paying ones, as they see no alternative. Don’t even get me going about residential real estate in Vancouver and Toronto.”

0
0
chilled

FINALLY, one of the 1% admit that immigration policies are entirely self serving;

http://www.cbc.ca/news/canada/british-columbia/bill-gates-says-trudeau-s-approach-to-immigration-refugees-good-for-business-1.3771889

Go Linux, tell Billy Boy to go fuck himself.

0
0
CanNeverThinkOfAGoodName

I like the last line, describing the giggle they all have about how Cascadia on both sides of the border will not vote for Trump. These people are causing trump.

0
0
bullwhip29

this never gets tiring…

Richest Dog in China has 8 brand new iPhone 7 all for herself
http://www.notey.com/@funnymalaysia_unofficial/external/12026325/richest-dog-in-china-has-8-brand-new-iphone-7-all-for-herself.html

0
0
bullwhip29

Public input sought on Granville Island’s ‘bold’ new course
http://www.metronews.ca/news/vancouver/2016/09/21/public-input-sought-on-granville-island-bold-new-course.html

0
0
bullwhip29

B.C.’s tax on foreign buyers has legal basis, Christy Clark says
http://www.theglobeandmail.com/news/british-columbia/suit-seeks-class-action-to-halt-bcs-tax-on-foreign-purchasers/article31965804/

>>> i guess the college drop out who majored in religious studies would know, huh?

0
0
Best place on meth

“Ms. Li’s legal challenge also states that B.C. acted outside its jurisdiction by enacting the tax because Ottawa has exclusive constitutional jurisdiction over foreign affairs, including issues such as foreign trade and aliens.”

Lame.

This isn’t a foreign affair and has nothing to do with trade. This is a domestic affair and our elected representatives have every right to levy taxes in accordance with the wishes of BC voters.

0
0
chilled

“”Canadians in general can’t quite absorb the fact they’ve caused this unhealthiness with their own debt obesity. Instead they seek others to blame. The mansion-buying Chinese student with no income is an excellent example. It makes a great headline. The geezers and xenophobes at Timmies cluck over it. The NDP salivates. It’s just so perfect.

But underneath that are the true reasons residential real estate is troubled. And troubles may soon come to the centre of human achievment, the GTA.””
=================================================
From the maggot Turncoat Turner’s garbage blog of yesterday. I thought you fellow geezers and xenophobes should know.

0
0
CanNeverThinkOfAGoodName

He really needs to come and spend a day with me (or someone like me who has a regular sort of life in Vancouver) and he would get much greater insight about what’s happening. I have crossed paths with that woman. There is context Turner doesn’t get.

0
0
Oracle

He gets it. He’s not stupid. He knows about Foreign money inflows.

Business decision. Even though bordering on Wolf of Wall Street ethics.

0
0
Slava

A business decision trumps lying and is justifiable.
What else does he lie about? His clients want to know.

0
0
chilled

I still think he is keeping the ‘politically correct’ door ajar for another possible run at politics. The man has a Napoleon complex and would love to be King of Halton Hills, if not more.

0
0
southseacompany

“OECD slashes Canada’s outlook, warns low rates inflating housing”, BNN video

http://www.tsn.ca/oecd-slashes-canada-s-outlook-warns-low-rates-inflating-housing-1.570806

“The OECD also warned that low rates have inflated asset prices, including housing in countries such as Canada.”

“”Over recent years, real house prices have been growing at a similar or higher pace than prior to the crisis in a number of countries, including Canada, the United Kingdom and the United States,” the OECD said in its update of its main econimic forecasts. “

0
0
southseacompany

“‘Joe Schmo’ lenders double stake in Canada’s mortgage market”, Globe & Mail

http://www.theglobeandmail.com/report-on-business/joe-schmo-lenders-double-stake-in-canadas-mortgage-market/article31981959/

“Alternative lenders in Canada have doubled their share of the residential mortgage market in the past decade, increasing risks in the housing sector where they operate with limited federal government oversight.”

0
0
YVR

The top-level Trudeau adviser overseeing a possible extradition treaty with China told the previous government that China’s so-called “economic fugitives” don’t belong on Canadian soil

“Canada does not want to be seen as a safe haven for fugitives and it is in Canada’s interest to have such persons removed,” said the note, obtained by The Canadian Press under the Access to Information Act.

http://globalnews.ca/news/2953563/trudeau-security-adviser-agreed-to-removal-of-chinas-economic-fugitives-from-canada/

0
0
would-be buyer

If Canada and China sign an extradition agreement, I think this will have the biggest effect on Vancouver RE. We are simply a safe haven to launder money and use our housing as a land bank. Vancouver isn’t the best place on earth and everyone wants to live here. We are delusional when we call ourselves world class. Foreigners invest here because we have lax enforcement of money laundering rules and regulations and tax laws and our banks apparently love giving million dollar loans to students and housewives without verifiable income, no questions asked. Foreigners fear the CRA and being taxed on world-wide income and an extradition treaty that would send them back home to face the firing squad. Remember when the IIP was revamped to IIVP and required proof of source of income/ investment funds by releasing tax returns/… Read more »

0
0
Oracle

They’re not real changes yet. All hot air. To please and deceive people like you. No offence.

0
0
would-be buyer

I’m not that cynical to believe fraud can continue unfettered.

0
0
chilled

Try to remember that in Trudeau’s world, there are no criminal fugitives, just misunderstood people who need a hug.

0
0
YVR

Unless you are wealthy. He does not like the wealthy.

0
0
southseacompany

“Vancouver class action lawsuit seeks to halt tax on foreign property purchases”, The Guardian
https://www.theguardian.com/world/2016/sep/20/vancouver-class-action-lawsuit-tax-foreign-property-purchases

“Those caught by surprise by the tax included Jing Li, a 29-year-old university student from the People’s Republic of China who moved to Canada three years ago and has yet to obtain permanent residency.”

“Jing is now the lead plaintiff on the lawsuit, which argues that the tax violates more than 30 international treaties signed by Canada.”

0
0
burntout

Imagine that! A country wanting to give a benefit to it’s own tax paying citizens above the money launderers of the world , how dare it!!

hopefully the judge will kick this out like all the ass-holes who tried to sue for cancellation of the immigrant investor scam.

0
0
Best place on meth

“the tax violates more than 30 international treaties signed by Canada.”

Bullshit. This is a frivolous suit and should be thrown out.

0
0
southseacompany

“Pension plans must be wary of investing in ‘bubble’ real estate markets: expert”, Global News
http://globalnews.ca/news/2950523/pension-plans-must-be-wary-of-investing-in-bubble-real-estate-markets-expert/

“Recent data from Statistics Canada shows employer-sponsored pension plans have $150 billion invested in Canada’s real estate market.”

“But as warning bells continue to ring that Canada’s hot housing markets – namely Vancouver and Toronto – are ripe for a correction, are the pension plans putting their eggs in the wrong basket?”

0
0
patriotz

The article fails to recognize that pension plans don’t buy the same RE that consumers do, i.e. houses and condos, but commercial and multi-unit residential. Not saying the latter can’t be overvalued, but these are entirely different markets and a consumer RE bubble is not a reason in itself to avoid commercial RE.

0
0
YLTNboomerang

Different assets like office towers in Calgary that nobody will lease out even just for cost of covering utilities…that’s not going to end badly for pension plans.

0
0
No Money Down

Comment on Macrobusiness.com.au http://tinyurl.com/zgwl53c Citizen: We are worried about Chinese buying our houses and making them unaffordable for hard-working local kids. What will you do about it? Politician: Don’t worry. You are just being racist. 2011) Don’t worry. You are just being racist. There are very few Chinese here. The census from 2001 proved that. 2012) Don’t worry. You are just being racist. Statistics show that 99% of Vancouver houses are owned by Canadians. 2013) Don’t worry. You are just being racist. Sure, many Auctions are being won by people of Chinese race. But these are probably Canadian-born people with Chinese ancestors. 2014) Don’t worry. You are just being racist. It is true that Chinese interpreters are present to assist many auction winners. The buyers are probably recent immigrants keen to bring their skills to Canada and help improve the… Read more »

0
0
bullwhip29

Vancouver real estate developer seeks to set record straight KATHY TOMLINSON VANCOUVER — The Globe and Mail Published Tuesday, Sep. 20, 2016 9:47PM EDT Last updated Tuesday, Sep. 20, 2016 10:25PM EDT http://www.theglobeandmail.com/news/national/vancouver-real-estate-developer-seeks-to-set-record-straight/article31980747 A Vancouver real estate developer and speculator featured in a recent Globe and Mail investigation is pledging to pay his fair share of taxes and work with the Canada Revenue Agency to make sure his books are in order. Kenny Gu sat down with The Globe for an exclusive interview because he said he wanted to clear his name after allegations of possible fraud and tax evasion in connection with flips of residential properties. “I want to show you I am a good guy. I am not that kind of guy,” Mr. Gu said. “My family is here. My children are here. They will live in this… Read more »

0
0
CanNeverThinkOfAGoodName

Looks like he has a good lawyer, at least a socially/psychologically astute one. But it’s not going to be enough to plead ignorance of the law I guess, which he seems to be attempting to plant as a suggestion in our minds by what he says here. Just my first impressions.

0
0
Best place on meth

Plead ignorance, play dumb, no speak English….their tactics are varied and endless.

0
0
Its_the_ALR_stupid

“His documents show Mr. Gu’s wife, Min Tang, also made $1.17-million in gross profit buying and selling six more residential properties since 2010. Mr. Gu said the family lived in three of those homes, so the sales were classified tax-free under the principal residence exemption.”

That’s tax fraud right there. The principle residence exemption does not apply if the seller is buying and selling as a business, regardless of whether or not he technically lives there for the required 12 months. The fact that he lived in 3 different places in 5 years tells you this was obviously a business venture.

0
0
Newcomer

This is tax avoidance. The bar for fraud is much higher. You might still owe the taxes and, probably, the penalties, but fraud has to be willful.

0
0
CanNeverThinkOfAGoodName

If he did anything like give an address to some other authority hat did not correspond to his address for tax purposes, could count as partial evidence of fraud?

0
0
YVR

His accountants will be forced to testify. That will be enough proof it was willful.

0
0
bullwhip29

i wonder if he (and others) will be offered amnesty when all is said and done?

0
0
YVR

Cooperating with CRA means rat out. Sounds like this guy is ready to rat out on the others involved in his scheme. All his accountants and their other clients will be audited.

0
0
Billybonger

Suspect we will see an avalanche as this trainwrecks

0
0
Best place on meth

I wonder if that extradition agreement will affect listings next month.

0
0
Just me

I think we are already seeing the effects of the “risk of extradition” talk. In the Mainland expats community, as well as among those contemplating to run, news spread a lot faster.
In Chinese language blogs there was discussion of possible agreements between Canada and China regarding the screening of rich immigrants. The timing confirms this: talks appear to have started some time after Trudeau got in power, so a slowdown in the late Spring seems about right.
These guys are not idiots: they are highly motivated, well-informed crooks, who need to take their ill-gotten money to a safe location, no questions asked. Vancouver RE was the perfect way to achieve the objective, at least until recently.

0
0
YVR

Maybe not next month but by Spring for sure. Add in the vacant home tax, Air BnB penalties, CRA audits, the inability to sell to other HAM without a 15% tax and the declining prices coming out in realtor stats and there will be a rush to the exits no question.

0
0
paulb

New
254
Sold
133
TI:9866

http://www.paulboenisch.com

0
0
patriotz

Tax on foreign homebuyers would be ‘horrible,’ Toronto real estate lawyer warns

A Toronto real estate lawyer warns introducing a tax on foreign homebuyers would be devastating for the Toronto housing market. His warning came Tuesday after a prominent economist said it was only a matter of time before the surcharge would come into effect in the Greater Toronto Area.

The poor thing. But Kathleen Wynne has budget and popularity problems that need help. I should note that the Ontario NDP, unlike its BC counterpart, has been nowhere on the RE bubble.

0
0
Combat roach

Much sooner than in Vancouver compared to the relative time in conjunction of relative price.

0
0
YVR

Yup for Ontario it will be implemented for the tax revenue. It is a no brainer when you can bring in billions in tax dollars that the voters support.

0
0
Billybonger

Oracle:

Good post.

0
0
Oracle

The final nail in the coffin would be to strike at the heart of the local speculator. Put in a law that sellers must start reporting a SALE on their tax returns starting in 2017 AND that each sale will be audited to see if the principal residence exemption is violated. That would trigger a listings explosion as many locals are sitting on multiple properties. IMO, that would be huge. THEN, 1) Slowly raise the foreign buyer tax to 25%. 2) Initiate a tax on 2nd homes within the major metropolitan areas starting at 0.5% a year and rising to 2.5% over 5 years. 3) Change the $500 million Christy is giving away to her developer friends into a rental subsidy. That way, people who claim the monthly subsidy because of low income to rent ratios will inadvertently identify those… Read more »

0
0
franko

“….as many locals are sitting on multiple properties…”

You talkin locals or locusts?

0
0
Combat roach

We have local locusts too, the special breed developed by lousy immigration policies.

0
0
JayTor

Good ideas summed up:
1 – 15% is good enough
2 – great idea
3 – yes, great idea
4 – Nah, these students help keep the fees lower for Canadians
5 – I think a year is fair
My 2 cents – I would like to see everyone thought

0
0
Newcomer

If you give a $100 subsidy to all renters, all rents will go up by $100. That’s the way these things work, because all renters are now competing with an extra $100. If you only give it to the poorest renters, the bottom end of the rental market will go up in price. The tried and true solution is to build rental only properties (not buy existing ones). Co-ops are the best as they give the most bang for the buck.

0
0
Best place on meth

It would have to be a tax credit, not a direct handout.

And not everyone likes co-ops due to the type of people you have to interact with at the regular meetings.

They’re like stratas in that way.

0
0
chilled

Co-ops? No biggie. It takes time, but you get used to being around women who make there own feminine hygiene products and men who are into gardening.

0
0
Newcomer

Not everyone has to live in coops. I’m talking about how get the most supply (and hence the greatest increase in overall affordability) for 500 million dollars. Rents will go down for everyone, not just the ones in the purpose built housing.

0
0
Just me

Fully agree.

However, the way to do it is to restrict zoning to rentals, and build for the long term. The BC libs continue to deny zoning for rent, arguing it would undermine the discretion associated to property rights. Of course, it is just another textbook example of vested interests.

0
0
patriotz

“If you give a $100 subsidy to all renters, all rents will go up by $100. ”

Do you think if every renter got a $100 pay raise, rents would go up by $100? No, rents would go up by the same % as their incomes as this would maintain the same proportion of income paid to rent. Same with the tax credit. If a typical renter household was making $3000/month and paying $1200/month in rent, rent would go up $40.

0
0
YVR

I say we tax sawdust at 100% for all houses built in Surrey.

0
0
Best place on meth

Someone was asking yesterday about the state of the detached market in East Van.

Colder than a 3 day old corpse.

September sales on pace for about 36, after 78 in August, 117 in July, 163 in June and 216 in May.

MOI, which was never higher than 3 in the past 2.5 years went up to 5 in July, 8 in August and 16 as of now.

0
0
Bbbbb

People need to keep pressure on Gov and Media. Encourage reporters. Housing market vulnerable to a pop (rapidly increasing inventory). Now is the time to keep pressure on by repeating the issues over and over louder and louder.

0
0
JayTor

the lemming are heading to the cliff… just need a loud “bang” and they all jump

0
0
vangrl

Your data is different than Paul’s because you’re posting sales as they happen rather than when the real estate board processes them, right? Trying to understand all the different sales stats out there right now.
I think yours are more “real time”, as in they really did happen in Sept, is this correct? thanks

0
0
Best place on meth

Vangrl,

These guys post detailed stats every couple of weeks, same stats as the board but more info and more than once a month.

http://dexterrealty.com/current-market-conditions.html

0
0
Best place on meth

Update on the double homicide in Renfrew Heights.

http://www.inews880.com/syn/112/222793/victims-identified-in-east-vancouver-double-murder

0
0
patriotz

Vietnamese. You can let our favourite bogeymen off the hook on this one.

0
0