China's Millionaire Migration

[GirlySports]

so how can this be stopped?

Only Canadian Citizens can own property? That's how it is in China (I think)

[MillerTime GFG]

Orange-Julius-ish I suppose, but the source is solid...

Friend of mine (realtor in Calgary) ran into her broker friend in Vancouver, who said 60/130 deals in his office have decided to walk since the new implementation of the 15% tax. The BC gov't didn't set a date (much like CMHC did with the new down payment rule), and made the tax retroactive.

Imagine you bought a new house because you had a firm deal on the sale of your previous home, and now that buyer has decided to walk? Assuming you have a mortgage on the new place, chances are it's going to be conditioned to the sale of your previous home. Just a mind-numbing implementation of this rule, which is pretty standard for all BC Government real estate related affairs.

[CroFlames]

Originally Posted by GirlySports

so how can this be stopped?

Only Canadian Citizens can own property? That's how it is in China (I think)

Only Canadian citizens, and your parents, grand parents, and great-grand parents need to be Canadian citizens too.

Otherwise go back to where you came from.

[Winsor_Pilates]

Originally Posted by MillerTime GFG

Orange-Julius-ish I suppose, but the source is solid...

Friend of mine (realtor in Calgary) ran into her broker friend in Vancouver, who said 60/130 deals in his office have decided to walk since the new implementation of the 15% tax. The BC gov't didn't set a date (much like CMHC did with the new down payment rule), and made the tax retroactive.

Imagine you bought a new house because you had a firm deal on the sale of your previous home, and now that buyer has decided to walk? Assuming you have a mortgage on the new place, chances are it's going to be conditioned to the sale of your previous home. Just a mind-numbing implementation of this rule, which is pretty standard for all BC Government real estate related affairs.

That seems impossibly high.
Unless this broker friend is in one of the Chinese brokerages where their % of foreign buyer clients is way higher than average.

[The Yen Man]

Originally Posted by GirlySports

so how can this be stopped?

Only Canadian Citizens can own property? That's how it is in China (I think)

Doesn't Hong Kong tack on some crazy tax for foreign buying? I think it was something like 50%, to try to deter mainland Chinese from buying in HK. Doesn't seem to stop them though, as the HK housing market is probably the craziest in the world.

[MillerTime GFG]

Originally Posted by Winsor_Pilates

That seems impossibly high.
Unless this broker friend is in one of the Chinese brokerages where their % of foreign buyer clients is way higher than average.

Not 100%, but he probably is, given the average price of the homes said to be within those 130 deals.

[Lubicon]

Not sure how effective it would be but some places (Florida is one I think) don't put any restrictions on who can buy property but they do put a back end tax on any property when you go to sell it if you are not a US Citizen.

[rubecube]

Originally Posted by MillerTime GFG

Orange-Julius-ish I suppose, but the source is solid...

Friend of mine (realtor in Calgary) ran into her broker friend in Vancouver, who said 60/130 deals in his office have decided to walk since the new implementation of the 15% tax. The BC gov't didn't set a date (much like CMHC did with the new down payment rule), and made the tax retroactive.

Imagine you bought a new house because you had a firm deal on the sale of your previous home, and now that buyer has decided to walk? Assuming you have a mortgage on the new place, chances are it's going to be conditioned to the sale of your previous home. Just a mind-numbing implementation of this rule, which is pretty standard for all BC Government real estate related affairs.

Not everyone can come out a winner on every policy decision and I kinda think this is one of those things where the greater good has to win out. Does it suck for the people in those situations? Sure, but there is a massive housing problem in Vancouver right now and something had to be done. The cost of living is completely out of whack with the average wage in the city and it's completely unsustainable. I doubt this is the last measure that ends up being put in place either, especially with how tight next year's election is shaping up to be.

[Fuzz]

It would have been foolhardy to delay it, by even a month. You would have had a rush of buyers happy to pay 10% more to get in under the mark ,prices jump up, and the whole situation is even worse. Better to risk screwing a few in the short transition than the alternative.

[rubecube]

Originally Posted by Fuzz

It would have been foolhardy to delay it, by even a month. You would have had a rush of buyers happy to pay 10% more to get in under the mark ,prices jump up, and the whole situation is even worse. Better to risk screwing a few in the short transition than the alternative.

I'm just hoping it's not too little too late. The opposition has been banging this drum for years and BC Liberals have been dragging their feet about as much as possible, even going so far as to mock the main proponent/critic of the problem on several occasions.

[Wormius]

Originally Posted by Fuzz

It would have been foolhardy to delay it, by even a month. You would have had a rush of buyers happy to pay 10% more to get in under the mark ,prices jump up, and the whole situation is even worse. Better to risk screwing a few in the short transition than the alternative.

A fair balance would have been to allow any transactions in progress to proceed unaffected by the 15% fee.

As an aside, I wonder what people in China are being told about this.

[I-Hate-Hulse]

I suspect the details on how they would assess this foreign buyers tax or vacancy tax aren't finalized yet.

They're going to have to be real specific in order for this to have teeth. Otherwise I can see a pile of evasion techniques springing up (just like any other tax). Investment corps, "relatives" parachuted in to "live" in houses, management companies - this just sounds like a nightmare to enforce.

[Drak]

Originally Posted by CroFlames

Only Canadian citizens, and your parents, grand parents, and great-grand parents need to be Canadian citizens too.

Otherwise go back to where you came from.

Landed immigrants(residents) should be able to own property as well, not just citizens.

[MillerTime GFG]

Originally Posted by rubecube

Not everyone can come out a winner on every policy decision and I kinda think this is one of those things where the greater good has to win out. Does it suck for the people in those situations? Sure, but there is a massive housing problem in Vancouver right now and something had to be done. The cost of living is completely out of whack with the average wage in the city and it's completely unsustainable. I doubt this is the last measure that ends up being put in place either, especially with how tight next year's election is shaping up to be.

I'd say "suck" is an understatement, as this will cost people thousands (tens) of dollars, and have them scrambling to find financing for their new home in what would most likely be a very short amount of time. I know if I was working on those files, I'd be absolutely livid. Can't imagine being the families actually in that situation...

Fixing this issue shouldn't come at the expense of hurting individuals and families that have nothing to do with the bubble in the first place. Sure, there may have been a large influx of people looking to get in before the deadline if one was to be set, but what's another couple months after years of abuse? Don't squash the little people.

[rubecube]

Originally Posted by MillerTime GFG

Fixing this issue shouldn't come at the expense of hurting individuals and families that have nothing to do with the bubble in the first place. Sure, there may have been a large influx of people looking to get in before the deadline if one was to be set, but what's another couple months after years of abuse? Don't squash the little people.

There's a difference between the steady stream during open season and the rush to get in while there's still a perception of money to save. There's no way to implement something like this without someone somewhere getting screwed but there are probably less people being screwed by a quick implementation than there would have been by an influx of buyers trying to get in under the wire.

[Locke]

Originally Posted by fulham

Thats literally what its like when you sell real estate in nice neighbourhoods in Van, People look at their Appraised Value, add a couple hundred grand, then sell the same day above asking. Its making it impossible even for wealthy Canadians to compete.

Because the huge value is the whole point. They want those dollars nestled in nice, safe Canada.

[Fuzz]

What? You think the people getting hit with this new tax are the "little people"? They will be scrambling for financing? Come on, they will just grab another bag of money and hand it over. These aren't Canadian families getting hit with the tax, it is foreign investors looknig for a place to dump cash where it won't loose value.

Man, my heart can't bleed fast enough for them. As I mentioned before, if they announced it and waited a few months to implement, it would have the affect of driving prices up faster and harming actual Canadians looking for homes.

[snootchiebootchies]

Folks on this forum makes it sound like Vancouver is the only game in town for real estate. I just don't see foreign nationals clamouring to commit fraud to evade these rules just for the privilege of buying homes with a 15% surtax plus whatever other potential tax remedies that may be implemented in the future. These rich foreign nationals are not impulsive idiots -- in fact, they likely got rich by not being impulsive idiots. I'm pretty sure they will now take a breath and look for other real estate markets (or other types of investments) that are more friendly to their cash.

[MillerTime GFG]

Originally Posted by Fuzz

What? You think the people getting hit with this new tax are the "little people"? They will be scrambling for financing? Come on, they will just grab another bag of money and hand it over. These aren't Canadian families getting hit with the tax, it is foreign investors looknig for a place to dump cash where it won't loose value.

No, I'm not talking about the people getting hit with the tax. They're the ones walking away from the deals, so of course I'm not eluding to them when saying they'll scramble to find financing.

Let's say you live in Vancouver. You just purchased a place for 1.5M and waived financing condition, because you have a firm sale on your previous residence that you sold for 1M. Now that buyer has walked on the deal, so you no longer have a firm sale on your previous home. Your mortgage on your new place has a condition that it's subject to a firm sale on your previous home, as your income isn't enough to carry both debts. You're now scrambling.

[rubecube]

Originally Posted by snootchiebootchies

Folks on this forum makes it sound like Vancouver is the only game in town for real estate. I just don't see foreign nationals clamouring to commit fraud to evade these rules just for the privilege of buying homes with a 15% surtax plus whatever other potential tax remedies that may be implemented in the future. These rich foreign nationals are not impulsive idiots -- in fact, they likely got rich by not being impulsive idiots. I'm pretty sure they will now take a breath and look for other real estate markets (or other types of investments) that are more friendly to their cash.

The island is the next obvious stop if they're still wanting to buy in BC. The market here has been heating up as well. Obviously it's not as bad as Vancouver but houses in Victoria and Oak Bay are already out of reach for the average person here. I don't know why they just didn't slap the tax on all the notable spots where this is already or will shortly be a problem.

EDIT: Take a look at this. Again, not sustainable in the longterm.

http://www.vreb.org/current-statistics

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in June, 2015 was $594,700. The benchmark value for the same home in June 2016 has increased by 21.9 per cent to $724,900.