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

[spikerS]

Just got a news alert across my desk...

15% property tax for foreign buyers
The new tax will only apply to homes purchased in Metro Vancouver

so, buy a 1 million dollar house, and have to pay $150,000 in property taxes...

[spikerS]

found a link

http://www.news1130.com/2016/07/25/b...oreign-buyers/

METRO VANCOUVER (NEWS 1130) – Foreign owners who buy Metro Vancouver residential real estate will have to pay a lot more in provincial property transfer tax.

The BC government is bringing in a 15 per cent tax on sales to foreign nationals.

To put that in perspective, the tax will amount to a $300,000 extra charge on a $2-million home.

The change comes into effect next Tuesday (Aug 2).

Data collected over a three-week period shows five per cent of sales in Metro Vancouver during that time frame went to foreign buyers.

[max_boost]

Interesting to see how this plays out. Will things drop off right away? Or the Chinese just say, no problem, I pay cash. lol

[Sugarphreak]

...

[spikerS]

Originally posted by max_boost
Interesting to see how this plays out. Will things drop off right away? Or the Chinese just say, no problem, I pay cash. lol

I am sure people will figure out a loop hole to scam the system.

[spikerS]

Originally posted by Sugarphreak


haha holy shit... I did not expect them to go that far, I thought it was just going to be an absentee tax


Maybe I will just hold off on buying for a month while this news sets in pure panic in Vancouver!

I expect prices to spike really quickly for the next week as people rush to complete deals before August 2, and then die off after that.

[BrknFngrs]

Sounds like it's a one time tax paid on property transfer as opposed to an increase to annual property taxes. Can't see this mattering much.

[Sugarphreak]

...

[RedDawn]

This ain't going to do anything.

I've done business with a lot of mainlanders. $150,000 to them is like $150 to an average Calgarian. Would an extra $150 in costs stop the average Calgarian from the purchase of the average $450,000 home? Mainlanders are able to purchase a new Lambo or Ferarri, EVERY SEASON, just for the sake of staying fashionable. To think $150,000 is going to do anything is laughable.

[killramos]

I recently read that genuine foreign nationals only make up like 5% of the real estate transactions in greater Vancouver. Are they propping up real estate? Sure. They do spend a bit more, but not nearly as much more than I think people would think. But it would take losing a lot of than 5% of buyers to crash the Vancouver real estate market.

Imo this relatively small one time tax ( if we are working under the generalized assumption that this is all about Chinese nationals pooling liquidity outside of China due to currency fluctuations and corruption probes) is a pittance. A pittance to the real estate market in general, a pittance to Vancouver's tax revenue ( About $3.8 million theoretical collection for the month of June on a $100+ million monthly operating budget[if i am researching this correctly] ), and a pittance to these Chinese foreign nationals who just want to get every cent they outside of china and don't care how much they lose in order to accomplish that goal. This tax also does nothing to capture the hundreds of millions of dollars already on our shores.

It also seems like a super easy tax to dodge by just putting the homes in someone else's name on paper. Soon you will have one guy who provides a "service" by holding onto hundreds of millions of dollars of property in order for people to avoid the 15% tax . Or better yet some kind of legal Canadian trust "owning" the home.

I would have been much more in favor of a long term punishment-style tax in the order of 1-5% non-resident or non-occupied ANNUAL property tax in order to really hurt the Chinese who are looking at these investments as a long term equity hold. Eroding their equity by 5% a year would do the trick nicely imo.

Either that or a more formalized ban on foreign national real estate investment if people really just want the insane merry go round to stop.



http://www.abbynews.com/news/385890651.html

[Sugarphreak]

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[HiTempguy1]

Originally posted by killramos

It also seems like a super easy tax to dodge by just putting the homes in someone else's name on paper. Soon you will have one guy who provides a "service" by holding onto hundreds of millions of dollars of property in order for people to avoid the 15% tax . Or better yet some kind of legal Canadian trust "owning" the home.

The CRA is going hard on Vancouver properties, I doubt you'd get away with this now. Maybe in the past, but currently?

Also:

B.C. Finance Minister Mike de Jong, who announced the information Thursday, cautioned that the information is based on sales for just under three weeks and the sample loosely represents about 10 per cent of projected total home sales for 2016.

All of the data you guys are quoting is either outdated from CMHC from a year or two ago, or the most recent stuff is literally from a study of a 3 week span Solid evidence is solid!

[D88]

Not sure what this will do but I'm happy to see it coming into affect as early as August 2. This leaves little to no time for any foreign buyers sitting on the fence to grab those Vancouver properties before having to pay the 15%.

[01RedDX]

.

[holden]

The government sure can move fast when it's something everybody wants and has no opposition.

The ~5% of foreign buyers is more like kindling for the fire. It's the foreign buyers willing to pay above market prices added to the low interest rates, easily available credit, questionable regulation and the mindset that real estate can never go down that has created this bubble.

[revelations]

Um, many of these homes are owned by BC corporations - that have a mailing address in Canada, but are "owned" by mainlanders.

How is this going to affect them ? Sounds like OPTICS yet again from a retarded government.

[atgilchrist]

That's accounted for. The residency of ownership of the company's shares is considered.

[gwill]

BC is really stepping up for residents of bc. With this tax hike and changing rules on realtors. This 15% tax is massive... It will definitely shift the investment elsewhere.

It will be interesting to see what this does for sales... If foreign buyers are truely an issue we'll see this in the coming months.

[Xtrema]

Originally posted by spikerS


I am sure people will figure out a loop hole to scam the system.

Xtrema Pure Canadian Properties LLC.

[GQBalla]

Personally, I don't think this will change anything.