Category Archives: opinion

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.

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.

Damage from bubble bursting worse than affordability issue

What’s worse?

Working people not being able to afford a home or losing your life savings during a housing bubble burst?

This opinion piece at the Vancouver Sun says it’s not a question of if, but when – and when it does burst the damage to the economy will be far worse than the current affordability question.

The damage will be huge. In 1989, the Toronto bubble burst, and six years later house prices had decreased 50 per cent. Many speculators lost all of their life savings. Financial institutions were in crisis. All home building activities stopped. Unemployment increased. The flow of immigrants decreased sharply. A general economic recession developed.

Governments cannot prevent the bursting of the Vancouver bubble. They can only adopt policies to slow its growth. But these will be opposed by the many who benefit from the price increases and who, as is the case during all euphoric phases, insist that “this time, things are different”.

Read the full article here.

No more self-regulation for BC real estate

The premiere is talking tough about self-regulation in BC real estate:

“The real estate sector has had 10 years to get it right on self regulation and they haven’t,” said Clark at a Vancouver new conference.

Clark said the right to regulate the industry will be taken away from the Real Estate Council of B.C.and put into the hands of a newly established and dedicated superintendent of real estate.

“The point of regulation is to protect people, to protect consumers,” she said. “Self regulation is a privilege.”

Too little too late or just in time? Read the full article over at the CBC.

Friday free-for-all! June 24th 2016

It’s the end of another work-week and that means it’s time or another Friday Free-for-all!

This is our regular end of the week news round up and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat, let’s play the blame game!:

Blame Ottawa
Blame the ALR
Blame immigration
Blame hype
Blame empty homes
Blame early retirement
Blame tax dodgers
Blame yourself

So what are you blaming out there? Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!