magnumpi

BC bringing in 15% property transfer tax for foreign buyers in Metro Vancouver - NEWS 1130

This will also effect temp foreign workers but not PR or Citizens

sharkus

I do rather like this idea, but would have a caveat that if you're going to actually live in the property then you could be exempt from this.

I would also add a sliding scale to that 15%, if you purchase more than one property, the percentage rises, at a sharp rate, say 50% for the second property.

Of course it would not stop foreign buyers from getting someone with PR / Citizenship to purchase properties on their behalf, which I suspect is what will happen.

magnumpi

Hmm good point

withabix

They will be looking a lot harder at avoidance. Will the Lawyers, realtors, fronters and buyers want to spend a couple of years in prison?

Doubt it....

magnumpi

Toronto have been advised to take on this tax too, so watch this space

Mr. Porter echoed the concern about Toronto’s market. “At the very least Ontario should be taking a long look at this measure themselves for the GTA,” he said. Foreign ownership in the region’s housing market “is more of an issue than many analysts realize.”

Davita

That's exactly how it's done in Indonesia where foreigners are barred from owning property on freehold land. It has become a business for Indonesians to be hired to carry out this function.

The realtors call it a nominee system as they get a notary to tie-up the Indonesian to contracts. But this system is fraught with danger as the courts could easily reject any nefarious act by the Indonesian nominee (i.e. he decides to sell or rent to others, or use the title to get a loan) if the contracts circumvent Constitutional Law....

I live in a villa in Bali and an apartment in Jakarta officially owned by trusted Indonesian family members.....but I paid for them.
I know of one case where the pool-man has title to a huge resort property as he is trusted by the New Zealand couple who wish to retire there.

Engineer_abroad

I think the intent is to make those foreign buyers who are using the Vancouver housing market as either stocks or shares or as safe havens for foreign earned money to think twice about whether it is the best place for them by substantially hitting their potential profits. i.e. if the profit after the tax is less than somewhere else they are more likely to go elsewhere. Think about it this way, if you buy a house now then at the current rates you can expect it to increase in value by 20-30% but if you had to pay a 15% tax your profits are cut in half.

of course this wont stop those who really want a house here from buying, but I don't think that is the objective nor the issue in the Vancouver housing market.

not2old

its all rubbish & you know it. There will be ways around it & besides, what government dept will be created to do this costing the taxpayers?

An alternative could be something such as 'must be resident' , otherwise owners pay extra property tax.?

Someone owns a property, if they are not resident in the province, then double the 'property tax'

Of course easy to find out if someone is resident by their Canadian annual tax return.

So, if you live in another province or outside of Canada & own property say in Vanacouver, then your property tax rate doubles, or some percentage.

They do something along the 'non resident' property increase in PEI as well as in some US states

Engineer_abroad

I agree that this is mainly a headline grabbing policy brought in shortly before an election to help the BC liberals keep power and filling their own corrupt pockets and that a link has to be made between the buyer and Canadian tax returns for residents purposes. This isn't an issue of where the buyer is from but where the money is from.

That being said this as a first step could make Vancouver less attractive to those foreign investors looking to flip properties after a year and make a quick buck and as such should go some way to cooling the market.

dbd33

I don't think this works. It just encourages the property owner to put the property in the name of someone resident in Vancouver. If the owner already has children resident in Vancouver then that's no trouble at all. There's also the consideration that it might not be enough money to matter to the property owner anyway.

dbd33

Wow! What a sour grapes post.

I can't afford to live on Fifth Ave, a circumstance to which I've adjusted by not trying to move to Fifth Ave. I can't afford to live in Zermatt, I've dealt with that in the same way.

Why don't people who can't afford to live in Vancouver, and aren't from Vancouver, just not move to Vancouver? That's much easier than the government implementing policies to make it possible for everyone who wants to move to Vancouver, to move to Vancouver.

not2old

agree

Its the same as parents or anyone living offshore buying (funding it) a property in their resident family member/business partner living/resident in Vancouver.

Its all waste of time, or a 'way around it' on either option

beckiwoo

Now with people moving further out to Maple Ridge, Langley, Abbortsford etc. - the price of property out there is getting higher.

I have accepted I cannot afford to buy in Vancouver but how far out have I got to move to in order to afford something - it is getting ridiculous!

Engineer_abroad

Because of a few issues:

1) those from Vancouver are being forced out by the complete discontent between the local labour market conditions (salaries) and house prices (fuelled by foreign earned income).

2) Adequate housing is a basic human right and when it is used by some to make staggering profits everybody suffers.

3) Vancouver is a large metro city and requires residents of all ages, education levels and abilities to keep it running smoothly. That is unless those that can afford to live here don't mind not having teachers in their schools, policeman on their streets, nurses in their hospitals, engineers building their infrastructure, chefs in their restaurants etc.

4) The economy of BC is Vancouver centric, if the BC provincial government did something about that then you may have an argument to allow Vancouver to become a Disney land. Unless BC can live on foreign ownership taxes alone I would suggest the government has a vested interest

5) The vast majority of the money coming into Vancouver is coming from China a country with well documented issues in relation to lax environmental and labour law. This allows these rich foreign buyers to make profits which would be unthinkable in Canada (and if they did operate in this way in Canada) would probably be in jail).

6) The government of a country has the responsibility to put the interests of its residents above those of non-residents.

I guess next you are going to try and persuade me trickle down economics has been a success just because it is a free market system.

Almost Canadian

Why not simply tax capital gains made on properties in Vancouver at 90%? If the intention is to make Vancouver more affordable, that should do the trick