Quote:
Originally Posted by squiggs96
I think the 15% tax is a good idea in concept, but I don't like the execution of it. As many have stated not grandfathering in existing deals is a bad idea. There is a building in North Vancouver with 113 units that was set to have an August 15th closing date. Most of these deals were done in March of this year. With the new tax, there are a few people that would be on the hook for between $60,000-$240,000. Keep in mind you can't mortgage this portion, as it has to be paid from your bank account at the time of closing. For this closing, six of the buyers (out of the 113) will have to pay the excess PTT if the units close after August 15th. Luckily for all involved, the COC was already obtained, and the units can now close July 29th. Lots of time by the lawyers, sales team, and buyers was needed, but the deals will all close tomorrow.
I know many of you think that the people who are buying all the houses in the Lower Mainland are wealthy, and they'd just hand over another bag of cash. That's likely the case with the ultra expensive (greater than $5M) houses, but the people buying the $500,000-$1,500,000 homes are not the ones with the practically unlimited funds.
These condos aren't even the ones where they were purchased 3-5 years ago, and would have seen an increase in value of at least 15%. The contracts were only signed 5 months ago, and the value today is likely close to what it was in March. Deposits are 20%, so it would be a big sum to walk away from.
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Quite frankly, I don't think a non-resident should be allowed to buy a property in Canada ever. They certainly don't qualify for a mortgage. I have little sympathy for a non-resident buying a 500k vs. a 5 mil property in cash.
The only people I hope the government steps into help are the residents who got stuck in limbo after their buyers backed out and they needed the funds to secure their new place.