Category Archives: hype

Some thoughts on the Vancouver foreign buyer tax

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.

CRA plans increased ‘lifestyle audits’ in Vancouver

The CRA suspects some people in Vancouver might not be paying tax on all world-wide income and are going to be taking an extra hard look at big spenders who aren’t big tax-payers.

Over at the Globe and Mail Christine Duhaime a lawyer who focuses on financial crimes explains how it works:

“They all follow what we call the same typology. … They all want an expensive Lamborghini or a Ferrari, they want a really expensive house, they send their kids to the most expensive private schools they can get in Vancouver,” she said. “So when you try to find money launderers, that’s what you look for. Who went to the Ferrari shop? And that’s what they mean by the ‘lifestyle audit.’”

Ms. Duhaime said while many people think of money laundering as something done by drug dealers, in fact the activity is more often associated with white-collar crime and usually involves tax evasion.

Will going after tax cheats have any effect on the overinflated housing market in Vancouver?  Read the original article here.

Lack of home inspection leads to no surprises

At least it should come as no surprise that buying a home with no inspection leads to numerous nightmare scenarios when you actually inspect the property after purchase.

“Recently, I had one house that was so catastrophic, it needed some $350,000 in repairs. They were not expecting that at all because it was newly renovated. But that only concealed all the issues. It was lipstick on a pig. It needs a new foundation, piping, you name it, it needs to be done,” said Anderson, who has been an inspector for six years and was a builder for 25 before that.

A million bucks doesn’t get you what it used to in east van:

Last October, the 40-year-old and his spouse bid $955,000 on an older home in Hastings-Sunrise. It was listed at $899,000 and “we heard there were five bids. We were in the middle. We expected this and wanted to have a differentiating factor.”

Ahead of taking possession, “we had asked if we could get in to do some measuring for our furniture, but they wouldn’t allow it,” said Girard.

On moving day, they arrived to find “an absolute disaster,” said Girard, who described the home as being “not safe for our one-year-old daughter. That was the biggest problem.”

There were also holes in the wall, exposed electrical lines, flooring that didn’t meet walls, kitchen cabinets sitting unevenly over dirt floors covered in rodent droppings. The house, when they had seen it, had been “staged. They had positioned things to cover up problems. Drywall had been ripped out. There weren’t enough circuit breakers for things like the stove to be powered. We had to MacGyver things to make them work.”

Unsurprisingly, the Home Inspectors Association of BC recommends that you get a home inspection before buying.  Read the full article over at the Financial Post.

Pity the detached home-owner

There’s a lot of angry young people in Vancouver, people who think they deserve to be able to afford a home in this specific city.  A few of the angrier ones would like to make the issue all about race, but I guess if you’re of a certain kind of mindset EVERYTHING can be about race.

It wasn’t always like this.  Vancouver used to be a nice small town where the average income would be able to to stretch and afford a local detached home.  Wouldn’t it be great to have gotten in at that time?

Maybe not.  After all, It’s not these owners fault that property prices have gone up and up and property taxes have nudged up a bit as well.

Fortunately if you’re in this group the mayor of North Vancouver has got your back.

Mr. Mussatto said this week that he would like the province to look into separating single-family houses from condominiums and multiple-unit dwellings so owners of single-family houses could be charged a lower tax rate.

The mayor argues that while the value of single-family houses has skyrocketed in recent years, the value of condos has remained relatively stable. “If you’re a condo owner, your taxes may indeed be going down this year, because condos didn’t go up much or they didn’t go up at all compared to single-family homes,” he told me in an interview. “The bottom line is that there are some people who are getting hurt pretty significantly and I want to make sure that we’re fair with the tax system so everybody pays their fair share.”

Read the full article over at the Globe and Mail, and then if you’re so inclined go back to your racist rantings. That’s sure to be an effective way to change the way things are and get everybody on your side.

Mayor explains why Vancouver is so expensive

Lots of young people like to complain about high housing costs here, but do you know why Vancouver is so expensive?

The Mayor explains:

“…Our cultural scene punches above its weight and routinely draws international attention to our theatre, music, comedy, and visual arts. In its first year, we had Canada’s largest public New Year’s Eve celebration. Hundreds of thousands of people year over year come out to watch one of the largest Pride parades in North America.

Patios stay open later, our craft breweries are exploding in popularity, and our food trucks are globally revered. Car-Free Day on Commercial Drive and Khatsahlano Fest on West 4th pack thousands of families on our streets every summer. The PuSh Festival, viff and the Folk Fest get capacity crowds and have lineups onto the street.”

We are pretty much just like London, New York and San Francisco. Read the full write up by the Gregor Robertson over at the Walrus.