Foreign home owners in Vancouver just got hit with a whopper!

[sputnik]

Originally posted by GQBalla
Personally, I don't think this will change anything.

House prices won't drop. Demand won't drop.

All that will change is that the government will have a bit of extra money.

If you want things to change the hike has to happen at the property tax level where foreign owners get heavily taxed year after year.

[hks]

Originally posted by sputnik




House prices won't drop. Demand won't drop.

All that will change is that the government will have a bit of extra money.

If you want things to change the hike has to happen at the property tax level where foreign owners get heavily taxed year after year.

I think even at the property tax level, it wouldn't really do anything. I have no clue how much property taxes in van are, but when people are dropping $2MM on houses and picking up condo's at 10-15% above list price, I don't think even a 100% increase in yearly property taxes is going to deter them.

And besides, there are a lot of individuals who take advantage of the immigrant investment program where buy in is 800k. If anything, this 15% tax is a massive discount for foreigners who don't want to use the IIP.

This is a step in the right direction but i think if BC wants to stop this bubble they have to eliminate foreign property purchases all together.

[Sugarphreak]

...

[sabad66]

Originally posted by hks


I think even at the property tax level, it wouldn't really do anything. I have no clue how much property taxes in van are, but when people are dropping $2MM on houses and picking up condo's at 10-15% above list price, I don't think even a 100% increase in yearly property taxes is going to deter them.

And besides, there are a lot of individuals who take advantage of the immigrant investment program where buy in is 800k. If anything, this 15% tax is a massive discount for foreigners who don't want to use the IIP.

This is a step in the right direction but i think if BC wants to stop this bubble they have to eliminate foreign property purchases all together.

it would have to be something significant like 15% of value per year if left unoccupied... not increase the regular tax structure for those that are actually occupying it.

[jacky4566]

Originally posted by atgilchrist
That's accounted for. The residency of ownership of the company's shares is considered.

Do you have any proof of this? What percentage can be foreign investment before they are considered for this tax?

[Xtrema]

Originally posted by hks


I think even at the property tax level, it wouldn't really do anything. I have no clue how much property taxes in van are, but when people are dropping $2MM on houses and picking up condo's at 10-15% above list price, I don't think even a 100% increase in yearly property taxes is going to deter them.

And besides, there are a lot of individuals who take advantage of the immigrant investment program where buy in is 800k. If anything, this 15% tax is a massive discount for foreigners who don't want to use the IIP.

This is a step in the right direction but i think if BC wants to stop this bubble they have to eliminate foreign property purchases all together.

Vancouver tax is cheaper than Calgary's

$1M value only has to pay $3200.

http://vancouver.ca/home-property-de...sidential.aspx

I don't know why the city is actually lowering taxes.

[Sugarphreak]

...

[revelations]

Originally posted by atgilchrist
That's accounted for. The residency of ownership of the company's shares is considered.

You have to understand that there are layers upon layers of corporations setup for all this. Front companies setup by locals to handle the business end, virtual offices, etc.

No way this will affect the larger setups. Perhaps the occasional millionaire though (not billionaire).

[atgilchrist]

Originally posted by jacky4566


Do you have any proof of this? What percentage can be foreign investment before they are considered for this tax?

Government release says: "foreign corporations include incorporated in Canada, but controlled in whole or in part by a foreign national or other foreign corporation..."

[Sugarphreak]

...

[rage2]

Originally posted by Xtrema
Vancouver tax is cheaper than Calgary's

$1M value only has to pay $3200.

http://vancouver.ca/home-property-de...sidential.aspx

I don't know why the city is actually lowering taxes.

You can't look at it that way as Vancouver prices are way higher than ours. $1M gets you a small condo in Van, so you have to look at it from the perspective that you're paying $3200 in taxes for a small condo versus say $2000 in Calgary.

[Xtrema]

Originally posted by rage2

You can't look at it that way as Vancouver prices are way higher than ours. $1M gets you a small condo in Van, so you have to look at it from the perspective that you're paying $3200 in taxes for a small condo versus say $2000 in Calgary.

$800K will get me 900+sqft near water. But yeah, to get the same foot print in Calgary as Van, it'll be $2.5M and paying $7500 in taxes.

[Buster]

I find the whole concern a bit bizarre, to be honest.

If property values are so high, then development is encouraged, and supply should increase to reflect demand. This assumes people are smart enough to understand that renting can be smarter than buying.

The market should still be capable of solving this problem without government intervention. (Although gov't intervention in the form of interest rates etc is unavoidable I guess).

[guessboi]

^ There is no more land in central Vancouver = no more excess supply.

[gwill]

I read it's a $100-$200k fine for anyone trying to get around this foreign investment legislation. The penalty on top of the transfer fee is crazy high.. Perhaps enough to deter people from trying to skirt around the laws.

[Zhariak]

Originally posted by Buster
I find the whole concern a bit bizarre, to be honest.

If property values are so high, then development is encouraged, and supply should increase to reflect demand. This assumes people are smart enough to understand that renting can be smarter than buying.

The market should still be capable of solving this problem without government intervention. (Although gov't intervention in the form of interest rates etc is unavoidable I guess).

Originally posted by guessboi
^ There is no more land in central Vancouver = no more excess supply.

Just to chime in... Developments are being planned and going up everywhere. Not sure about single family homes, but condo developments are going up everywhere.

Last two trips I've been out there I was on a little "development tour". Being used to the slow pace of Calgary, I was pretty surprised.

[Buster]

Originally posted by guessboi
^ There is no more land in central Vancouver = no more excess supply.

That's one of the silliest myths I see regularly perpetuated in the Vancity RE market.

[revelations]

Originally posted by guessboi
^ There is no more VIRGIN, UNTOUCHED land in METRO Vancouver = no more excess supply.

Fixed - I think this is what you mean.

Between the industrial parks giving way to condos, old RR corridors etc, there is much for RE development and tear downs of course.

[revelations]

Originally posted by atgilchrist


Government release says: "foreign corporations include incorporated in Canada, but controlled in whole or in part by a foreign national or other foreign corporation..."

So then I (as a rich foreigner) just setup another holding company based out of Vancouver, that manages the original one, or put a relative who is a naturalized citizen as a majority shareholder.

[Sugarphreak]

...