You know what the difference between you and the wealthy is?
The wealthy have lots of money.
And they tend to keep hold of it by using perfectly legal techniques such as buying and selling real estate within a bare trust to avoid taxes. One recent example prevented more than $2 million from from being vacuumed up into government coffers.
Green Party MLA Andrew Weaver has been concerned about the bare trust for the last two years, highlighting the need to fix the loophole.
He says people who are very wealthy or investing from abroad would be recommended by astute accountants to purchase their house using the loophole.
“Every time most people buy and sell a house, they’re paying property transfer tax. It’s only the wealthy and the wise who would actually buy in bare trust,” said Weaver.
“As a society, if every single person created a bare trust and bought every property in a bare trust there would be no more property transfer tax collected in British Columbia… there’s no reason not to change it.”
Just think of the efficiencies and tax dollars saved if every real estate transaction in BC happened through a bare trust. Less money spent in taxes means more money flowing into a supporting a healthy local economy. Bare trusts for all!
It’s that time of the week again…
Friday Free-for-all time!
This is our regular end of the week news roundup and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–GV: sales up, prices slip
–PTT a ‘drag’ on RE economy
–What are you paying for rent?
–Vacant homes target by thieves
–TD forecasts dip in Calgary
–but they’re already down YOY
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
You’ve probably heard over and over again that household debt in Canada is climbing to record levels.
And it’s probably not a surprise to you that mortgages due to the high cost of housing holds some blame there.
But did you know that the total amount of mortgage debt in Canada has nearly doubled in the last four years?
According to CAAMP the total national mortgage debt in 2008 was $664 billion. It now stands at a total of $1.2 trillion.
Over in the Vancouver Sun Barbara Yaffe sees this stat and seems to blame the little transaction fees for the high cost of housing.
But there’s a little four letter acronym conspicuously missing from her article: CMHC.
That would be the Canadian Mortgage and Housing Corporation, which has been flooding the market with insured mortgage money at a time of low interest rates.
So here’s the real question: Is Canadian mortgage debt so high because of our house prices, or are our house prices so high because of that mortgage debt?