Tag Archives: foreign

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.

Restrict foreign buyers of Vancouver real estate?

Yesterday we posted about the record debt levels of Canadians – most of that growth happening in mortgage and line of credit debt.

Some people think low interest rates and CMHC backed mortgage debt is to blame for high house prices, while others blame foreign buyers in cities like Vancouver and Toronto.

Would you support restricting foreign ownership of property the same way they do in countries like Mexico, China and Australia?

Some people certainly would. This petition on change.org has grown by more than 10,000 signatures in the last few days and is currently at the top of todays active list on that site.

Here’s the link to the petition if you support this idea – how many signatures do you think it would take to get politicians to support limitations on foreign buyers and how would they convince home sellers that this is a good idea?

Friday Free-for-all! Luxury Credit.

You made it to the end of another work week, and that means it’s time to do our regular Friday Free-for-all post here at VCI.

This is our 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:

Price changes and credit (graph)
Why so many doomers?
High prices raise debt levels
Perspective on foreign buyer levels
3rd try for Versace in Vancouver

So what are you seeing out there? Post you news links, thoughts and anecdotes here and have an excellent weekend!

Who to blame for housing bubble? Government.

So if there’s a housing bubble in Canada who is to blame? Some people blame foreign buyers, some people blame local buyers. Some people think sellers are to blame and some people think the government is to blame. From the National Post:

Many analysts are becoming increasingly concerned that some cities — notably Toronto, Vancouver and possibly Calgary — are in the midst of their own U.S.-style housing bubble. A document written by the country’s financial regulator and obtained earlier this year through an access to information request, expresses concern over the “emerging risk” of Canadian loans that “have some similarities to non-prime loans in the U.S. retail lending market.” Bank of Canada Governor Mark Carney continued tosound the alarm as well last week over the growing level of household debt, while maintaining the overnight lending rate at a near-record low level of 1%.

The question remains as to why prices in Toronto and Vancouver — where the economy is stagnant — are rising so fast, and not in cities like Edmonton and Saskatoon — where the economy, and population, is booming.

Read the rest of the article here.