Looking to cheat on your real estate transaction taxes? Bad news, the CRA has decided it doesn’t want you to and is coming after real estate tax cheats.
From April 2015 to March 2017, the CRA audits of real estate transactions resulted in more than $329.4 million in assessed income that had not been reported. During this time, the CRA applied over $17 million in penalties, primarily associated with Canada’s two major real estate markets in Toronto and Vancouver.
Canadians work hard for their money and the Government of Canada recognizes that many families count their principal residence as both their home and most valued asset. The CRA will continue to strengthen relationships with key partners such as provinces, territories, and municipalities to further expand, obtain, and exchange information on real estate transactions, thereby enhancing the CRA’s ability to combat tax evasion and avoidance.
17 million in penalties? That’s almost enough to buy a fixer-upper on the north shore!
Canada’s economy is booming, expanding at a 3.7% annual rate in the first quarter. And yet…
Meanwhile, in a year when stocks are rising everywhere, Canada’s benchmark index is the second-worst-performer in the developed world after Israel, according to Bloomberg data. It’s a similar story in currency and bond markets.
The performance underscores how, even with the improving economic performance, caution prevails. Investors remain concerned about geopolitical risks such as U.S. trade protectionism, the outlook for oil prices and a housing market that some analysts say may be on the verge of a correction.
“It is a tad curious to say the least that the Canadian economy arguably has been one of the bigger pleasant surprises in 2017 and meanwhile the equity market has done a belly flop,” said Doug Porter, chief economist at Bank of Montreal, who highlighted the disconnect between Canadian growth and market performance in a May 26 note.
Energy shares are down 10 percent year-to-date, while fears about contagion from a run on deposits at troubled mortgage lender Home Capital Group Inc. have weighed on financial shares, which are down 1.2 percent.
Read the full article over at Bloomberg.
Some people love the foreign buyer tax, some people hate it, but at least one person thinks it was a conflict of interest for the finance minister to enact it only in Metro Vancouver when he owns investment properties just outside that boundary:
The one home and six investment properties that belong to Mike de Jong in Abbotsford are worth almost $1 million – a significant investment that rose in value relative to similar properties inside Metro Vancouver, records suggest.
That puts de Jong in a conflict of interest when handling the province’s controversial real estate file, says Duff Conacher of Democracy Watch.
“Given that the finance minister has significant real estate investments, I don’t think he should have been taking part in this,” Conacher said.
“He would have to recuse himself or sell his properties. It has to be one or the other. He can’t have a private interest and take part in decisions about his properties.”
But de Jong tells CTV News he had nothing on his mind except doing his job when he moved and voted for the tax in the B.C. Legislature.
“The decision was based exclusively on the analysis of the data,” he said outside a Liberal caucus meeting.
Read the full article over at CTV news.
The National Association of Realtors (NAR) in the US has just released data on foreign buyers. Noticeably missing from the top five list is China, but at the very top of the top 5 US markets there’s one country: Canada.
That’s right, Canadians are the most likely foreign buyer in the US.
NAR stats show that Canadian and UK buyers are the most likely to buy property for occasional use. Going back to 2016, 80% of Canadian, and 61% of UK buyers were non-resident buyers. To contrast, only 39% of Chinese buyers were non-resident. This means Canadian and UK citizens are more likely to buy property and not move into it. Whereas 61% of Chinese buyers are likely to buy property for relocation.
To understand how impressive this statistic is, you have to look at the relative number of people. China has over 1.317 billion people, and Chinese citizens purchased 29,195 US homes in 2016. That results in 11,386 US homes sold to Chinese citizens for investment or occasional use. To contrast, Canada has 35.85 million people, and Canadian citizens bought 26,851 US homes in 2016. Since 80% of Canadians are non-resident, that’s 21,480 homes for investment or occasional use bought by Canadians just last year.
You should be ashamed of yourselves.
Read the full article here.
You’d think that lending out money for real estate in Canada would be a no-lose deal, but Home Capital Groups shares collapsed 41% at open today:
The embattled lender announced early Wednesday Home Trust has a non-binding agreement in principle with an unnamed institutional investor for a $2-billion line of credit to be secured against mortgages. The agreement is expected to be finalized later in the day. Home Trust will have to pay the investor $100 million to tap the line of credit and interest will be charged at 10 per cent on outstanding balances.
Read the full article at BNN.