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Chinese agents miffed by B.C.’s new tax

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Ephraim Vecina | 17 Aug 2016, 08:15 AM Agree 0
Buyers who might have been interested in getting a home in B.C. would be scared off instead, says a Vancouver-based agent
  • Moe | 17 Aug 2016, 11:15 AM Agree 0
    The biggest issue is that investors who trusted the liberal free enterprise system will think twice about bringing their money to our shores. You cannot make drastic tax increases and announce it few days before the new measures are implemented. What about buyers who made offers to buy and will close at a date beyond the new date for implementing the new tax increase.
    A lot of the deals would collapse because buyers did not predict a sudden huge increase in the price of the property they are buying.

    How can a foreigner trust Canada if they feel that Canada wants to punish them because they want to invest in a safe "heaven country". Canada is not the only choice in the free world. Bad and alarming precedent .
    • MFenn | 17 Aug 2016, 11:23 AM Agree 0
      Exactly; it's like putting Diefenbaker in charge of the Bank of Canada all over again; absolutely nothing learned in 60s years about hazarding the international reputation of Canada's sound markets and money for the sake of inward-looking and self-defeating nationalist gestures.
    • can | 18 Aug 2016, 10:21 PM Agree 0
      Canadians cannot afford it..... do not know how the money is coming here .... should limit the % age of foreign investment to control real estate price ... if cannot afford , do not buy .. let Canadians to buy for their living
    • MFenn | 13 Sep 2016, 10:04 PM Agree 0
      Even from the delicate point of view of people who fear for job security and house buying power, driving away investors and entrepreneurs makes absolutely no sense. Neither Diefenbaker ranting against foreign investors and Bay Street over 50 years ago, nor the hapless bungling of Walter Gordon actually worked to stimulate the Canadian market, and similar idea won't work now, either.
  • 15is toolow | 17 Aug 2016, 11:17 AM Agree 0
    Should be 20%
    • love canada | 18 Aug 2016, 10:25 PM Agree 0
      you are right ... i think Canadian slow to understand many issues in world affecting canadians life in present and future... like terrorism, refugee burden, real estate skyrocketing price due to foreign money( in future less Canadian have their own home and paying rent to foreigners)
    • MFenn | 15 Sep 2016, 11:01 PM Agree 0
      But neither Diefenbaker ranting against foreign investors and Bay Street over 50 years ago, nor the hapless bungling of Walter Gordon actually worked to stimulate the Canadian market, and similar ideas won't work now, either. Even from the delicate point of view of people who fear for job security and house buying power, driving away investors and entrepreneurs makes absolutely no sense. You can't expect the market to give more rewards for less investment, simply because of the landed/citizenship status of the buyer; it's not how markets work. But the market does respect competitiveness.
  • MFenn | 17 Aug 2016, 11:19 AM Agree 0
    This excellent but grim article is spot on accurate. It's 'political'. It's a 'tragedy'. It's a 'disaster'. Exactly.
    It seems to be driven by deliberately manipulated racial-specific ill-feeling, and it's a measure which will not relieve those whom the politicians claim to be wanting to help.
    It sounds like "Deutschen! Wehrt Euch!" all over again. How ironic in a province which prides itself as being so progressive!
  • 15is Toolow | 17 Aug 2016, 11:24 AM Agree 0
    Mr. Li...You mention 40 sales.
    How much money have you made?
    40 X's the average Vancouver price...
    Maybe your spoiled!
    Try working in a town where the average house is $250,000. AND you have too carry it for 3 months til it sells.
    You have had too much of a good thing too long. And at the cost and loss of a first time Canadian born buyer.
    • MFenn | 17 Aug 2016, 11:28 AM Agree 0
      So you think your nativist Canadian neighbour ought to sell you a house for less than the market says it's worth?
    • cannnnnnn | 18 Aug 2016, 10:30 PM Agree 0
      the price increased bcz of foreign investment Mr. Li , because you showed your client and nice projection of doubling the money in near future.. also made life of Canadian middle class buyer miserable to own home!!
      tax should be more than 15% distributing in over few years ... if price of house goes high --should be paid immediately for appreciation ....How is this idea ..will give little relaxation...
  • 15is Toolow | 17 Aug 2016, 11:31 AM Agree 0
    Foreign investors are driving up the prices. The first time Canadian buyer is forced out of the market. How in anyones wildest imagination can one conclude thats good for a first time buyer, or anyone starting out.
    And the Canadian buyer has to buy with a weak dollar on top of this insanity.
    Just because your income might decrease.
    Try getting your head around those Canadians starting out.
    Im sticking with 20%
    • MFenn | 17 Aug 2016, 11:42 AM Agree 0
      It is baffling how supposedly insulating Canadians from the market would increase market confidence in Canada's economy. A Diefenbaker-style twilight property market 'fortress' does not look good to potential investors. So many of Canada's economic indicators are good. This, on the other hand, is disastrous. Canada needs immigrants and investors. This - driven by racial-specific ill-feeling - says: "Go away! We nativists have less confidence in Canada's economy than you do!" It's a disaster.
    • Dave | 14 Sep 2016, 03:59 PM Agree 0
      May be 10% up front and 10 % on a declining rate when sold (say 2% a year) start counting from following calendar year, to discourage short term flipping.
      Our banks are also partly to blame because they are loose on lending to foreigners, and tight for us locals here.
    • MFenn | 16 Sep 2016, 10:08 AM Agree 0
      Let's hope developers won't have to bear the consequences of your proposed actions, Dave. In some cases they can't even get the finance to fund new condo developments until 80% of their units are sold, pre-construction. This why they absolutely need to sell these units; this is why they absolutely need investment. It's populist politicians who pander to short sightedness that threaten to drive away investment. 50 or more years ago, Diefenbaker railing against foreign investors and Bay Street didn't achieve anything worthwhile, and it won't now, either. Vancouver could be turned into another Singapore success story; or, by the short-sighted actions of politicians lacking vision beyond Burrard's Inlet (the attitude of some of them cries: "Investors, go to Calgary! go to Toronto!"), it could indulge in driving investment away instead.
  • Market Brace for Impact! | 17 Aug 2016, 11:40 AM Agree 0
    Tax should have been 'Grandfathered' at minimum (for existing, firm sales agreements) PLUS they should have raised exemption limit on PTT for First-time buyers 'Canadian Residents' to off-set FB tax....though I suppose they are unclear at this point how much tax revenue they will actually loose as a result of the drop in FB sales.

    Any new tax should have been set at a Federal level as other areas; Whistler, Fraser Valley, BC Interior and Toronto should get set for market surge! The Province/Feds should get ready for a class action challenge through NAFTA (Lawyers are gathering).

    Maybe they should have adopted measures similar to other countries which limit the number of properties/year Foreign buyers can purchase? Ironically, I understand even China/Hong Kong have such a policy?!

    Interested to see GVRD sales numbers (Sept 1) post tax...Get Ready!
    • MFenn | 17 Aug 2016, 11:59 AM Agree 0
      It's all very well to expect the Federal Government to counter Quebec nationalists' attempts to drive away investment (just look at how 'successful' these attempts have been when you see seemingly 2 out of 3 commercial properties around Trudeau-Dorval airport boarded up 'A LOUER'). And then to expect the Federal Government to help one particular Anglophone province to drive away investors also.
  • Vancouver Realtor | 17 Aug 2016, 01:12 PM Agree 0
    I appreciate reading all the comments made regarding the new foreign buyer
    property tax. I would agree with the comment the tax was imposed too quickly
    and will affect many sellers and buyers who already entered into a binding contract
    and if they cannot adjust the completion date ahead of the August 2nd implementation
    of the tax transactions could collapse with a domino affect that will cause a other
    transactions that sellers entered into on the strength of their own home selling.

    In regards to Mr. Jack Ii's comments I noticed in his comments his concerns
    are self servicing. I did not read any concern about the local people who have been
    eliminated from ever buying a home in Vancouver. The new tax affects 'everyone'
    so take a broader view and not focus on one group of people who are driving up
    the home prices in Vancouver.

    In regards to Ms. Liu Fei's comments I would say she is another 'self' servicing advocate for one specific group of people.
    I do not detect any concern about the local population.

    I do not agree with the reader who suggested the tax should be 20%
    however I agree the tax should be 15% - Mr. Li and Ms. Fei should consider
    how other countries control foreign home buyers. Can a non-citizen of China
    own real estate?....nope. Go to Taiwan...can a 'foreigner' buy real estate or own
    a business without a local partner?....nope. How about Australia? Fiji? USA? Mexico?
    Nope!...This is not a 'racial' issue it is an economic issue.
    I do not blame the Chinese for taking their money out of their country...a
    country where the government controls 'everything' and can change monetary
    policy over night, control their banks, freedoms, etc. I would probably do the same
    thing so let's drop the racial BS If it was Europeans or Americans we would be taking
    the same steps to curb the rise.....this tax is going to 'hurt' everyone. However,
    it should have been implemented years had to happen.

    We adjusted to the Property Transfer Tax, GST, HST and again the GST.
    I have no empathy for foreign buyers. They have the money and they know their
    investment is secure.

    • MFenn | 17 Aug 2016, 02:08 PM Agree 0
      ...but as you know very well, the word "foreign" in Vancouver real estate discourse is so very often a euphemism for "Chinese". This 15% tax is driven by populist politics, not by a widely consulted consensus that such a measure will actually help those for whom it is purportedly being introduced.

      Realtor associations should not allow their members both to identify themselves as such and then to stir up anti-foreigner feeling. The illusion that somehow a sound property market is one where housing is sold for less than its market value, if the buyer supposedly fulfills nativist criteria, is exactly this: a illusion.
    • A.Aspros | 18 Aug 2016, 06:40 PM Agree 0
      I AGREE

      It good that a the tax should be at least 15%. to any foreign investors, no matter where they live.

      My concern is that you will have all these homes to people that do not live here and empty; and not looked after. If they love t0 get a piece of our beautiful country, then let them come and enjoy what we have; and we get to know who they are!
    • Walk up | 18 Aug 2016, 10:41 PM Agree 0
      Don't they feel fresh air ( culture freedom use of system for foreigner )than china here.... do not hesitate to pay something back to this nice country.... let there Juice for Canadians and next generation!!! thanks to province at least they wake up!!! when Kathleen Wynn will wake up--does she have any interest not applying tax!!! We need jobs and earning people/immigrants who can own home and pay tax to us .. NOt a investor who juice the system
    • MFenn | 13 Sep 2016, 09:43 PM Agree 0
      So you really think that the dwindling numbers of Torontonian nativists who think the market is for their exclusive benefit would actually be better served by driving away investors? You really think your nativist Canadian neighbour ought to sell you a house for less than the market says it's worth? When more than half of people from Toronto originate from someplace other than Toronto, to try to introduce 'nativists first' tax scheme would be high inappropriate, to say the least. And even from the delicate point of view of people who fear for job security and house buying power, driving away investors and entrepreneurs makes absolutely no sense, either. Politicians who indulge such fantasies are being utterly irresponsible. And remember: even when concerns are manipulatively expressed regarding property owners who spend more than 6 months out of Canada, they - through property taxes - still have to pay for schools that their families don't even use.
  • Al | 17 Aug 2016, 02:08 PM Agree 0
    Hi every one, unfortunately most of comments from Real Estate agents are based on their personal interest of making millions of $ in a short time from these foreign investor, they don't think about the local family who can not afford to by a condo in Vancouver, even the people with very high professional job and high salary like Doctors, engineers they can't afford to buy a home in Vancouver, please open your eyes to the future of your children and grand children people, 15% tax wasn't a solution it was bad, reach people with tons of money from out side don't care a bout the 15% tax, the solution is band on number of properties the foreign investor can by in Canada like most other free country around the world, wakes up people.
    • MFenn | 17 Aug 2016, 02:16 PM Agree 0
      Why it should be regarded as somehow preferable for investors to have less confidence in Canada's economy and property market is hard to understand. Why would my neighbour sell me a house for less than its market value? The whole idea - driven by anti-foreigner feeling (in Vancouver, a euphemism for "Chinese") that there are supposedly two property markets in Canada, is illusory.
    • Dave | 14 Sep 2016, 03:54 PM Agree 0
      The local professional cannot buy these homes are partly due to our banks' 2-tier financing system. Strict on us Canadians (based on income qualification) and loose on the foreigners (based on equity). Its the Federal Government lending policy imposed on banks back-fire !
    • MFenn | 14 Sep 2016, 11:55 PM Agree 0
      ...but do you see that this is absolutely why developers need to sell a huge proportion of their pre-construction condo units, because finance is so strict? What you - 'Dave' - elsewhere propose is imposing draconian taxes on pre-construction condo purchases, while here you seem to arguing for financing to be looser and easier? You can't have it both ways. The populist politicians who want to impose draconian curbs on pre-construction condo unit purchase seem not to have figured how the system works, partly because of the very steep financing restrictions which developers face.
  • Hey...US. buyers also taxed! | 17 Aug 2016, 02:20 PM Agree 0
    Hey...what about our good neighbours / investors from the good old USA?

    Let me be the advocate for this somewhat 'forgotten group'.

    I recently had a US. client purchase a pre-sale in Van only to find a week later of the 15% FB tax!

    BTW - 'NO', they have not (as Foreigners) nor have I (as a Vancouver Realtor) cried racism/anti-investment as of yet!

    I suppose US. buyers will have the best case under the NAFTA agreement? Curious to see how that sorts itself out.

    In the meantime, I suppose we'll be working on assigning contract in next year or so...something that we may seeing a lot more of!

    Anyone interested in Gorgeous 1 bedroom, 660 sq. ft., Hot Brentwood area (Burnaby)? (2018 completion)

    • MFenn | 17 Aug 2016, 02:28 PM Agree 0
      It's all very well to take the benefits of NAFTA and then tell American buyers and investors effectively to go away! As you strongly imply, this 15% tax is completely against the idea of NAFTA.
  • love canada | 18 Aug 2016, 10:15 PM Agree 0
    IT IS NOTHING WRONG . THEY SHOULD ALSO START IN ONTARIO TOO. DO YOU WANT ALL CANADIAN NEXT GENERATION WILL LIVE ON RENTAL PROPERTIES AND PAY RENT TO FOREIGNER .....Do not say Canada is good only and blame , they want to make money so it is not for their need it is for business intense.... and if you think canada is good and economy will be good why have to worry for 15% as real estate property price has gone almost double in last few years.. just pay the tax and wait for another 5 years it will be compensated by appreciation...
    • MFenn | 13 Sep 2016, 09:31 PM Agree 0
      This 15% tax on "foreigners: (euphemism for Chinese) says: "Investors go away! We proponents of twilight nativism have less confidence in the Canadian market than you do." The illusion that somehow a sound property market is one where housing is sold for less than its market value, if the buyer supposedly fulfills nativist criteria, is exactly this: a illusion.
  • hi | 18 Aug 2016, 10:49 PM Agree 0
  • MFenn | 19 Aug 2016, 12:45 AM Agree 0
    To take up some points raised:

    One supposed property market for foreigners and another supposed property market for Canadians is an illusion. Investors comparatively have some confidence in Canada and this is a good thing, not a bad thing. This confidence needs to be respected and enhanced; the last thing needed is to drive investors away. Driving investors away is what this draconian, unconsulted tax measure does. "Drive investors away and feel better" is not going to make Canada's economy stronger.

    And it's an illusion to think that - Diefenbaker style - saying "Go away Bay Street and overseas investors" will make the property market and Canada's economy stronger. It's illusory populism which didn't work for Dief - for all his nationalist huffing and puffing - and it's not going to work now.

    To all the supposedly professional realtors who were complaining about Chinese buyers before the 15% tax was introduced in BC - and yes many did, there's no denying it - and to all the supposedly professional realtors who have subsequently gloated about the discomfort of Chinese buyers since the 15% tax had been introduced - and yes many did, there's no denying it - it's not your role to stir up racial specific hostility to a particular demographic of buyers. I think measures need to be taken by realtor associations to curb this unprofessional behaviour.

    And with over half of Torontonians originating from someplace other than Canada, how can it be possibly right for backward-looking nativism to be introduced into the Toronto property market?
  • Kris Kooblall | 01 Sep 2016, 09:25 AM Agree 0
    Housing is an economic good that is purchased by Canadian families to live and raise their families. Where else are they expected to live, if not in proximity to their work and their lives?

    Canadian families pay taxes in the form of the HST that drives revenue for our government to provide essential services.

    On average Canadian families pay in excess of $30,000.00 per year in direct (applied at time of transaction) and hidden taxes( re-applied after the transaction) and Canadian families are not complaining.

    Our taxes drives the funding of essential services that sustains our high standard of living.

    Many foreigners purchase Canadian prime residential real estate not only for investment and other extraneous purposes; however, specifically aimed as a step in the door and entry and access to Canadian life.

    Wherein lies the incentives and benefits to Canadians for foreigners to have unqualified access to prime residential properties?

    That foreigners invest here by purchasing prime real estate and crowding out Canadians purchasing Canadian real estate for their families to live in.

    We are simply shooting ourselves in the foot and very soon we may not have the use of our feet.

  • MFenn | 07 Sep 2016, 07:48 AM Agree 0
    With the establishment of a new bank which specializes in the mortgage market among Chinese buyers, it underlines how deeply unsatisfactory it is for the authorities in Vancouver to have targeted "foreign" - which, in terms of local euphemisms, means Chinese - buyers with a 15% tax:

    The new bank is headed not by a caricature of a supposed "foreign" launderer - beloved of those who use stereotypes to aid scaremongering - but by the former head of Scotiabank's mortgage division. The message from the new bank seems to be: "investors are welcome", while local politicians seem to be saying, "Investors go away!"
  • Dave | 14 Sep 2016, 03:45 PM Agree 0
    May be 10% up front and 10 % on a declining rate when sold (say 2% a year) start counting from following calendar year, to discourage short term flipping
    • MFenn | 14 Sep 2016, 11:45 PM Agree 0
      ...but don't you know that in Canada now sometimes developers have to sell up to 80% of their units at the pre-construction because some lenders just won't even finance projects unless 80% of units have been sold?
      So the developers absolutely need plenty pre-construction buyers: this is how the system works now in Canada; it's not like in the US, where banks are willing to take on more risk and where condo often lie unsold. Taking draconian tax measures which would threaten to cause many condo projects to grind to a halt would be a case of politicians shooting themselves in the foot. In investment terms, it would be like saying: 'Let's dig a hole in the ground and put the crown jewels in it, so that no one is offended'. It's just not how the Canadian condo market works.
      See for example:
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