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Posts Tagged ‘foreign investor tax’

Will the Foreign Investor Tax Help You Buy Property?

Wednesday, November 23rd, 2016

If you’ve been watching the headlines, you’ll know that there is a lot of frustration with regards to two large Real Estate Markets in Canada.  One is Vancouver and the other is Toronto.  Recently the BC Government introduced a 15% Foreign Investor tax on property purchasers in B.C.  Christy Clark can be heard saying ‘that is the impact we wanted to have.’  To cool their Red Hot real estate market and that’s just what they did. According to data released by the B.C. government, billions of dollars in Metro Vancouver real estate deals dried up and almost overnight.

In fact, on the last day before the changes came into effect, 55% of all purchases were done so by foreign investors.  Probably some good, but most likely moreso just more buyers to add frustration into an already highly overinflated market area, where the regular Canadian cannot afford to buy a home. Instead, these homes sit vacant and derelict, causing rental and property prices to rise. It’s great what B.C. did, but did you know that China took action against B.C. and their politics first?  That’s right, China said they were going to come to Canada and sue to get their money back.  It is unprecedented and has been put forth to show an example to their own citizens.

The Chinese plaintiffs are asking B.C. judges to enforce monetary judgments awarded in Chinese courts. These Chinese rulings typically involve people found in China to have defrauded Chinese banks or business partners and then fled to Canada with the money and invested in real estate here. Billions of dollars of bank faud proceeds are alleged to be invested in BC, while Lawyers in Vancouver say they are seeing a substantial increase in B.C. court cases filed by Chinese companies seeking to seize real estate assets from Chinese immigrants in B.C.

Perhaps B.C. didn’t want all the attention they were getting, as they decided to help China and Canadians out by adding another tax to your total when buying in B.C.  The Greater Vancouver Real Estate Board revealed the number of homes being sold had dropped significantly and prices had stalled since it came into effect.  See below:

In the end, China coming in to sue for recovery of money will show some foreign investors that if they would like to own property in Canada, they should do it with their own money.  A wee ocean isn’t that much to cross to get back a few million.  The changes to mortgage loan values, as well as the vacancy tax starting in January for Vancouver, all help Canadians such as you and I buy and keep our properties.  Canadians who had to work for their millions and mansions. Right on China, Right on B.C.

Now that’s the Cats’ Meow in Real Estate.