Category Archives: politics

No plan to prohibit foreign buyers

Bullwhip29 points out that BC Finance Minister Carol James has no plans to prohibit foreign buyers in BC.

Foreign buyers who want to buy residential real estate in Metro Vancouver pay a 15 percent tax.

Meanwhile, Finance Minister Carole James has no intention to outlaw foreign buying of B.C. homes when the NDP government introduces a series of policies in the next couple of months to address the high cost of housing.

James has said that there will be no ban like the one that exists in New Zealand.

B.C. Green Leader Andrew Weaver, on the other hand, has demanded an outright ban on foreign buying of residential real estate to curb demand. And he wants James to introduce this in her upcoming budget.

Read the full article over at the Straight.

BC: The Best Place to Launder Money

Looking to launder some money?

You’d be hard pressed to find a better place to do it than right here in beautiful British Columbia.

“One of the members of the public service said, ‘Get ready. I think we are going to blow your mind.’ While I cannot share all of the details, I can advise you that the briefing outlined for me allegations of serious, large-scale, transnational laundering of the proceeds of crime in British Columbia casinos,” Eby said. “And I was advised that the particular style of money laundering in B.C. related to B.C. casinos is being called, quote, ‘the Vancouver model’ in at least one international intelligence community.”

Eby suggested that a “lax attitude” towards regulation of B.C. casinos, during a period when the previous government had enjoyed “massive increases in provincial gambling revenue,” seems to have contributed to the problems today in B.C.’s gambling system.

Once you’ve had fun in our casinos come join the real fun in our property market where owners get to hide behind ‘opaque legal mechanisms’ for a place to stash cash that pays back!

Eby also said that he believes B.C.’s property ownership system — in which true owners of property can hide behind opaque legal mechanisms — could be attracting foreign criminals and corrupt officials seeking to hide wealth in the province. Eby said Finance Minister Carole James is working on reforms to pull back legal veils that cover true ownership of property and corporations.

Eby pointed to a 2016 study by Transparency International that showed real estate buyers in B.C. are using shell companies, trusts and nominee buyers to hide their beneficial interest in property.

In examining Vancouver’s 100 most valuable homes, the report found that 46 per cent — amounting to more than
 $1 billion in assets — have opaque ownership. Of the 100 properties, 29 are held through shell companies, at least 11 are owned through nominees (listed as students or housewives on land titles), and at least six are disclosed as being held in trust for anonymous beneficiaries, the report said.

Eby said B.C.’s landownership system could be connected to Metro Vancouver’s skyrocketing home prices. Top economists have “made inescapable arguments that taxable incomes reported to Revenue Canada have no connection to real estate values in Metro Vancouver until you get out to the distant suburbs of Vancouver,” Eby said.

This Eby guy sounds like a troublemaker. You know what to do, get out your wallet . With the right motivation we should be able to get this new government on the right side of history and keep the fun going in the casinos and the housing market. Right?

Read the full article here.

Sellers must disclose residency for tax purposes

It has long been the case that buyers are responsible for withholding 25% of the purchase price for the CRA to determine if capitol gains are owing, but now there will be a checkbox for the seller to indicate their residency status:

The B.C. government will soon require sellers to disclose their residency during a real-estate transaction so that information can be shared with the Canada Revenue Agency (CRA).

Observers say it’s a much-needed change that replaces an honour system that was open to abuse by speculators seeking to avoid paying capital-gains tax on properties they don’t live in. But some worry that because the province is placing the onus for confirming that information on the buyer, it exposes them to potential fines or even jail time if they get it wrong. A buyer who doesn’t properly certify a seller’s residency status could also be on the hook for unpaid capital-gains tax.

The government has changed a tax form used to collect the property-transfer tax to include whether the sellers in real estate transactions are Canadian residents under the Income Tax Act. Canadian resident homeowners do not pay tax on the increased value – or capital gains – of a property designated as a principal residence. Non-residents must pay capital-gains tax at the time of a sale.

Read the full article here

More supply in a bubble leads to a bigger crash

Southseacompany pointed out this article:

“The BC government has promised to tackle the housing affordability crisis in Metro Vancouver by “aggressively” increasing supply. A new study coming out of Princeton suggests that the NDP government may want to reconsider that strategy. In Economic Consequences of Housing Speculation, researchers link increased supply to a more severe crash when the bubble bursts”

“But Zhenyu Gao, Michael Sockin, Wei Xiong found that “housing speculation, anchored, in part, on extrapolation of past housing price changes, led not only to greater price increases and more housing construction during the boom in 2004 to 2006, but also to more severe economic downturns during the subsequent bust in 2007 to 2009.”

Read the full article here