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Thread: Province to tax foreign buyers of Metro Vancouver homes

  1. #1
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    Province to tax foreign buyers of Metro Vancouver homes

    Greetings


    http://www.cbc.ca/news/canada/britis...omes-1.3694167


    The B.C. government introduced legislation Monday that would add a 15 per cent property transfer tax on foreign nationals buying real estate in Metro Vancouver.

    The new rules would take effect Aug. 2 and apply to purchases of homes in Metro Vancouver, excluding the treaty lands of the Tsawwassen First Nation.

    Provincial Finance Minister Mike de Jong unveiled the tax as part of legislation aimed at addressing low vacancy rates and high real estate prices in southern B.C.

    "For example, the additional tax on the purchase of a home selling for $2 million to a foreign national will amount to an additional $300,000," de Jong told members of the legislature.

    Tax money to fund housing

    All B.C. residents currently pay a one per cent tax on the first $200,000 of their purchase, two per cent on the remaining value up to $2 million and three per cent on any portion above that.

    "The amendments include anti-avoidance rules designed to capture transactions that are structured specifically to avoid the additional tax," de Jong said.

    The revenue from the additional tax would be used to fund housing, rental and support programs, the minister said.

    De Jong said recent government housing data indicate foreign nationals spent more than $1 billion on B.C. property between June 10 and July 14, with 86 per cent on purchases in the Lower Mainland area.

    "Owning a home should be accessible to middle-class families, and those who are in a position to rent should be able to find a suitable home," Premier Christy Clark said in a statement Monday.

    'Intervention' needed, mayor says

    Vancouver Mayor Gregor Robertson welcomed the changes and described them as "overdue."

    "I've been calling for years now for the province to take bold action to deal with housing affordability, and the impact of global capital on our market here," Robertson said.

    "It's too early to judge whether or not it will have a significant impact, but it's good to see, particularly on the high end of the market.

    "We need an intervention there."

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    Richard Zussman ✔ @richardzussman
    Breaking: B.C government is imposing tax on foreign nationals. 15% tax on property transfer that includes foreign nationals.
    10:17 AM - 25 Jul 2016



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    Booking

  2. #2
    As a Vancouverite I like the initiative.

    Considering though that many real estate deals initiating from foreign investors are made through a Canadian operational corporation belonging to a Canadian holding corporation, itself belonging to a foreign holding - it will be hard to track which purchases are being made by foreigners without investigating all the way up the chain.

    More on that here: http://www.vice.com/read/is-vancouve...ital-of-canada

  3. #3
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    Quote Originally Posted by Aellyn Rose View Post
    As a Vancouverite I like the initiative.

    Considering though that many real estate deals initiating from foreign investors are made through a Canadian operational corporation belonging to a Canadian holding corporation, itself belonging to a foreign holding - it will be hard to track which purchases are being made by foreigners without investigating all the way up the chain.

    More on that here: http://www.vice.com/read/is-vancouve...ital-of-canada
    Hello Aellyn Rose

    Interesting point ,however to qualify for the lowest lending rates
    À non operational corporation is required and the garantors of the loan resident of B.C.

    Which means many mouth to feed.

    I am a real estate investor under corporate hats,
    In B.C, Vancouver area.


    Cheers


    Booket

  4. #4
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    Sounds like a good idea, and way overdue. Hope it's enough. I can believe the Asian influence when I go through Vancouver airport, you'd almost think you were in China.

  5. #5
    So that's good news! Thank you for letting me know.
    Though the people / corporations that are targeted aren't the kind that worry too much about lending rates - if they even need a loan I feel the situation that is targeted is more about people sheltering money than anything else.


    Quote Originally Posted by BookerL View Post
    Hello Aellyn Rose

    Interesting point ,however to qualify for the lowest lending rates
    À non operational corporation is required and the garantors of the loan resident of B.C.

    Which means many mouth to feed.

    I am a real estate investor under corporate hats,
    In B.C, Vancouver area.


    Cheers


    Booket

  6. #6
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    Greetings all



    Its a complicates issue here is another article
    http://www.theglobeandmail.com/news/...ticle31121420/

    One in 10 home sales in Vancouver region went to foreign buyers



    B.C. Premier Christy Clark says new data that show foreigners bought one in every 10 homes sold in Metro Vancouver’s superheated market over five weeks forced her government to introduce a new and substantial tax on international buyers, but she says the surprise levy is intended to stop the spike in prices, not devalue the equity built up by existing homeowners.

    Foreign buyers in B.C.
    Property transfers to buyers who weren't citizens or permanent residents, June 10 to July 14
    0
    5
    10
    15
    20%
    B.C.
    Greater Victoria
    Surrey
    Metro Vancouver
    Richmond
    7
    THE GLOBE AND MAIL » SOURCE: B.C. FINANCE MINISTRY
    DATASHARE×
    Area Foreign buyer rate
    Richmond 18
    Metro Vancouver 10
    Surrey 8
    Greater Victoria 3
    B.C. 7
    FOREIGN BUYERS IN B.C.DOWNLOAD CSV×

    https://s3.amazonaws.com/chartprod/2.../thumbnail.png
    Statistics the province released on Tuesday show buyers who were not Canadian citizens or permanent residents made up 10 per cent of all home sales in Metro Vancouver between June 10 and July 14. Those transactions totalled $885-million. An earlier release of data covering June 10 to 29 and not including end-of-month sales found only 5 per cent of the sales in the region involved foreigners.

    The proportion of international buyers was higher in the suburbs of Burnaby and Richmond, with nearly one in five of all homes sold in those cities going to people from countries other than Canada. The rate for Vancouver proper was 11 per cent, and 7 per cent across all of British Columbia.


    “There need to be more houses on the market that are available to local people,” Ms. Clark told The Globe and Mail.

    Next Tuesday, 22 communities will start levying 15 per cent in additional property transfer taxes on any foreign home buyer without permanent residency in Canada, as well as foreign corporations or Canadian-registered corporations owned or controlled by foreigners.

    The province has said it will assess the effects in the coming weeks and can the reduce the tax to 10 per cent or raise it as high as 20 per cent if need be.

    Related: How other countries have tried to deter foreign real estate investors

    Ms. Clark, who faces an election next spring, said she hopes the tax will limit international demand to rein in “these silly price increases that we’ve seen” in Metro Vancouver, where prices for detached houses rose by more than 30 per cent in the past year, and multimillion-dollar houses are common.

    “If this tax is 100-per-cent successful, there will be no money in it,” Ms. Clark said. “It’s certainly a lot better than what we had last week.”

    Fewer international buyers should cool bidding wars, but she said she does not think it will lead to a drop in home prices, which her government has argued would unfairly hurt the many locals who now have considerable equity in their homes.

    Ms. Clark said her government will roll out another one or two major strategies to help affordability in the region in the coming weeks.

    The announcement of the tax on Monday had regional mayors in British Columbia worried about ripple effects into Victoria and Squamish, among other places. Observers have also warned investors could take their money to Toronto, further fuelling that market. Ontario Finance Minister Charles Sousa said on Tuesday he is looking at the B.C. tax “very closely.”

    Ms. Clark’s government has been under increasing pressure to curb foreign investment in housing.

    The Bank of Canada recently issued warnings about unsustainable growth, while the federal government has struck a working group to issue recommendations on how to make Vancouver and Toronto’s housing more affordable.

    The Globe and Mail has also reported that some investors avoid property transfer taxes through bare trusts and shadow flipping, loopholes the government has said it has taken measures to close.

    Critics have linked B.C.’s caution on the issue to the large donations the ruling Liberal Party reaps from the real estate industry and the sizable budget boost it receives through the transfer tax, which generated $1.53-billion for the province last fiscal year. Opinion polls have shown that most respondents wanted foreign investment in residential real estate stopped or slowed.

    In response to that growing unease, the B.C. Liberal government has announced changes in the past several weeks, with a special sitting of the legislature under way this week. Along with the foreign-buyer tax, the province is clearing the way for the City of Vancouver to tax vacant houses – another aspect of the housing debate – and is ending self-regulation of the real estate industry.

    B.C.’s Opposition New Democrats and some economists have also raised concerns about the new tax, urging the province to look at the source of money involved in real estate purchases rather than the passport of the buyer. On Tuesday, B.C.’s Finance Minister Mike de Jong said raising property taxes and requiring locals to apply for an exemption is too heavy-handed and could hurt seniors, many of whom own high-value properties but earn little.

    The Chinese embassy in Ottawa issued a statement on Tuesday saying the Chinese government always “encourages its citizens to come to Canada to carry out economic, trade and investment activities, while asking them to abide by relevant local laws and regulation.”

    B.C.’s real estate industry called the tax unfair to those who have deals under way.

    Jon Stovell, chair of Urban Development Institute, a non-profit that represents developers, estimated that up to 12 per cent of the 29,000 presale condo deals in the region involve buyers who will be affected.

    “I can’t get over the injustice of welcoming people into your economy and then whacking them with this tax,” he said.

    Macdonald Realty vice-president Jonathan Cooper said his firm is scrambling to help worried clients, including a Singapore-based family relocating to B.C. that has bought a house on Bowen Island for $765,000. The deal is firm and binding – the family has paid a deposit – but is not scheduled to close until after Aug. 2.

    With the new tax, that buyer must pay about $115,000 more for the same house because the family does not yet have permanent residency.

    “They’re like most of us, they’re not the kind of family that has $115,000 just lying around,” said Mr. Cooper, whose firm has long courted international buyers and opened a Shanghai office in 2014.

    The new tax will likely make it more difficult for companies in mining, technology, health care and other sectors to recruit employees to Vancouver, Mr. Cooper said.

    “They’re already finding it difficult, because of the [housing] costs, to bring talented people in – and now anybody who is coming here on a work visa, and thinking of settling, it’s ‘Oh, I’m sorry, now that you want to buy a house when you’re here working for Lululemon, your costs just went up by 15 per cent,’” he said.

    Cameron McNeill, president of MAC Marketing Solutions, a Vancouver-based real estate marketing firm, questioned whether the tax would do much to reduce prices, calling it a fallacy to conclude that foreign demand is the biggest driver of rising real estate values.

    “We can’t erase or unwind the fact that Vancouver is a spectacular city that has been discovered,” he said.



    Quote Originally Posted by Aellyn Rose View Post
    So that's good news! Thank you for letting me know.
    Though the people / corporations that are targeted aren't the kind that worry too much about lending rates - if they even need a loan I feel the situation that is targeted is more about people sheltering money than anything else.

    The problem at the moment is that it does target every foreigner
    as revealed by many close to the situation




    Cheers




    Booker

  7. #7
    Then I'm in trouble... I'm based out of Vancouver but my nationality is French!

  8. #8
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    Quote Originally Posted by Aellyn Rose View Post
    Then I'm in trouble... I'm based out of Vancouver but my nationality is French!
    Well not if you have a permanent residency or you already own .

    It's a transfer tax paid once at purchase.





    Cheers





    Booker

  9. #9
    Foreigners should not be able to purchase property in our nation, end of.

  10. #10
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    Quote Originally Posted by blkone View Post
    Foreigners should not be able to purchase property in our nation, end of.
    Would that include Wal MArt https://en.wikipedia.org/wiki/Foreig...nies_of_Canada
    And all the other foreign corporations that employs many Canadians ?




    Cheers




    Booker

  11. #11
    Quote Originally Posted by BookerL View Post
    Would that include Wal MArt https://en.wikipedia.org/wiki/Foreig...nies_of_Canada
    And all the other foreign corporations that employs many Canadians ?




    Cheers




    Booker
    This thread was referring to residential property and I believe that only citizens of this nation should be able to purchase residential property within borders of this country. As for corporate policy, we should imagine one of near autarky. Our common focus, our goals and ideals should be directed towards this aim.

    Why is it that 'isolationist' has become a bad word???

  12. #12
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    Quote Originally Posted by blkone View Post
    This thread was referring to residential property
    Some properties are part residential and part business .
    As in Quebec and many other markets .


    As all new laws , tweaking might be required




    Cheers











    Booker

  13. #13
    Quote Originally Posted by BookerL View Post
    Some properties are part residential and part business .
    As in Quebec and many other markets .


    As all new laws , tweaking might be required




    Cheers











    Booker
    Tweaking should not be required. We as a nation should not need to lobby to secure our own interests. We have an army. We have a structure. Anyone who disagrees with an amendment to the law, should take it up with a soldier and the weaponry he carries.

    I am no fan of this 'game' called Democracy, Booker. I have no interest in either Capitalism or Communism, they are both Hyena's with different mouths.

    I do love this nation and it's people, especially the youth! For this government and the previous and (previous?) government to treat us as a colony is utterly disgusting. They should hang their heads in fucking shame!

    Anyone, anyone selling an inch of land to a foreigner deserves many things!

  14. #14
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    That guy Jonathan Cooper sounds like a self-serving capitalist. Boo-hoo.

    The first priority should be housing affordability for Canadians. Who cares about foreigners on work visas, if they can't afford the tax let them rent and apply for permanent residency so they can avoid the tax. The Vancouver market is ridiculous.

  15. #15
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    Are Americans exempted from the tax? Because we are not really foreigners, we are actually fellow North Americans and are in Canada all the time, buying things and nurturing the Canadian economy as # 1 trade partner.

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