Sorry if this has been posted before. I just came across it on reddit. I know there has been a lot of talk of foreigners purchasing real estate in Vancouver and pushing prices to unaffordable levels, but I'm not sure I realized it was quite as bad as it is. Also did not realize that over 100,000 Chinese millionaires have moved to Vancouver as part of the Immigration Investor Program. Article posted below says the average taxes paid by these millionaires was only $1,400/year (i.e. they're not moving here, they're just hiding their money here, typically via real estate).
The problem, in part, can be blamed on Canada’s immigration rules — particularly the Immigration Investor Program.
Under the so-called investor program, wealthy immigrants could hand over $800,000 to the federal government in exchange for permanent residency.
Five years later, the government would return the money with no strings attached.
That’s it. If you had $800,000, or could access it through loans and mortgages, you could get a Canadian passport.
This program was a disaster.
A 2014 government report showed that after 10 years in Canada, the average immigrant who came through this investor program had a taxable salary of only $15,800.
One in three immigrant investors did not file a tax return — claiming zero income in Canada.
After a decade, these millionaire investors paid on average only $1,400 in annual taxes.
By contrast, the average immigrant who came through the skilled worker program earned $46,800 annually and paid $10,900 in income taxes.
Far from being a boon to our economy and creating jobs, these so-called investors are actually a drain on our social system.
Last edited by EldrickOnIce; 06-20-2016 at 04:42 AM.
it's not just millionaire immigration. Another way is foreign students. Foreign student pay the triple tuition at university but then their parents slowly transfer millions of dollars to them and they hide it through real estate.
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In the video it talked about Quebec controlling its own immigration.
This is going on here. The south shore group of municipalities (Longueuil, Brossard, etc) are expecting 1000 new 'families' to the area in the next 18 months. Anecdotally, higher end properties listed for sale are almost exclusively selling to this clientele, and lots of these properties wind up being vacant.
Obviously, this is a small start of what has been and is happening in Vancouver/Toronto for some time now.
Further to this, I read a Province article that said a huge chunk of these millionaire immigrants actually collect social assistance checks. So not only are they not being taxed, they are collecting welfare from the system. If I find the article from a few weeks ago, I will post it.
The intended purpose of the program was for people to invest the money and create jobs. My understanding was you had to invest it in a business for a minimum of 5 years.
Not sure how this hand it to the Fed's for five years worked.
The intended purpose of the program was for people to invest the money and create jobs. My understanding was you had to invest it in a business for a minimum of 5 years.
Not sure how this hand it to the Fed's for five years worked.
Probably a classic case of a typical politician being unable to say 'no' to $800,000 staring at him in the face.
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Housing prices in Victoria are off the charts, and inventory is low. Last year we were looking at houses in the 750k range (just looking). They are now in the just under million-million dollar price tag range.
In the video it talked about Quebec controlling its own immigration.
This is going on here. The south shore group of municipalities (Longueuil, Brossard, etc) are expecting 1000 new 'families' to the area in the next 18 months. Anecdotally, higher end properties listed for sale are almost exclusively selling to this clientele, and lots of these properties wind up being vacant.
Obviously, this is a small start of what has been and is happening in Vancouver/Toronto for some time now.
I heard many are using this loophole and coming in through Quebec, but eventually moving to Vancouver and Toronto since nothing is stopping them.
It's not just China. A lot of wealthy people from the Middle East, Iran and India are buying up real estate like crazy.
My sister bought a house in 1996 just outside of Vancouver for about $350k. It was recently assessed at $700k and it's just a 3 bedroom, 1 bathroom bungalow with a tiny yard. Their neighbour has an almost identical house and sold it for $1 million to someone from Iran without them even looking at it.
Toronto is pretty much in the same boat. I heard a lot of the new condo buildings are sitting half empty because foreigners buy them with no intention to even live in them. Canada really needs to start controlling this better.
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It's not just China. A lot of wealthy people from the Middle East, Iran and India are buying up real estate like crazy.
My sister bought a house in 1996 just outside of Vancouver for about $350k. It was recently assessed at $700k and it's just a 3 bedroom, 1 bathroom bungalow with a tiny yard. Their neighbour has an almost identical house and sold it for $1 million to someone from Iran without them even looking at it.
Toronto is pretty much in the same boat. I heard a lot of the new condo buildings are sitting half empty because foreigners buy them with no intention to even live in them. Canada really needs to start controlling this better.
Yep, it really picked up when the canadian dollar started to fall.
If something isn't done there is going to be a massively negative impact on all Canadians.
Foreign investment in general is a good thing. I don't think there is a practical way to limit this type of thing, and even if there was I'm not sure that limits to foreign ownership in real estate would be a good move.
I was in Vancouver last week, and there was a Vancouver Sun artical saying 80% were in favor of a 'vacancy tax'... essentially, an extra tax on property that remains vacant in order to try and minimize this problem.
Just a couple of weeks ago at my son's swimming lessons I overheard a Chinese woman telling another woman that she did not have to pay for the lessons because they were low-income and there was a program. We left at the same time and this family got into a brand-new Mercedes SUV. It made me so angry at the time and reading this makes me suspect that they are millionaires who have no "income" in Canada and are abusing social programs. I can't believe anyone would actually do something so heinous but apparently they do.
I actually don't think it would take much for Canada to tip the scales enough for Chinese investors to park their money elsewhere. Real estate holding tax assessments and vacancy taxes would bring in huge money. This problem will get fixed, and I don't think it will take long.
Trudeau met in Vancovuer about the issue over the weekend.
I do think a vacancy tax is a great idea if it can be implemented. It encourages lower rental prices which in turn reduces real estate prices in a functioning market.
China's Millionaire Migration
