July 25, 2016

BC’s new tax on foreign buyers doesn’t address root cause of real estate crisis

Christopher WilsonRebel Commentator
 

The BC Legislature is re-convening for a summer session to deal with the issue of real estate prices and affordability in the province. They plan to enact some additional changes on top of those previously announced in the budget, including an additional 15% tax on foreign buyers of residential real estate in Greater Vancouver.

But will a 15% tax be enough to deter some of these ultra wealthy investors who often outbid locals by offering 15% over the asking price?

And how about the Quebec Immigrant Investment program that sees wealthy applicants accepted by Quebec’s immigration system, but then settling in British Columbia instead, putting stress on hard-working taxpayers.

Then there are buyers who may be legitimate dual citizens, but are buying here, then paying the majority of their taxes elsewhere.

Some say the number one issue isn’t foreign money and illegality, it is supply. Those people have a point. We have to be prepared to start building at market prices instead of just approving high end luxury towers and mansions for the ultra wealthy.

While I think today is a good start, the pressure is now on and the market is now far beyond reach for the vast majority of British Columbians, so something has to be done to try to stabilize prices.

Comments
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commented 2016-07-26 14:48:30 -0400
I actually find the new direction of the BC Liberals rather scary. Last week they announced no longer will Real estate be self regulated. The BC government will now regulate – never a good thing.
commented 2016-07-26 04:13:06 -0400
KARAN SINGH… Excellent commentary on the implications for the “host society”… “Apart from the uncontrolled immigration of wealthy individuals from undeveloped & developing countries also leaves a very negative effect on host society. As we all know people from these countries usually create wealth by unscrupulous means, for them principles & values in life have little meaning, they bring the same zero values, crooked principles & corrupt practices to Canada and teach their children the unethical values to live with. So what we are actually doing is not only hurting the current generation but destroying the future of coming generation too.”… Well said!… It is the height of naivete to believe that these international entrepreneurs have any allegiance to the country where they park their money other than their immediate families… They are NOT going to sing O Canada other than when it suits them…
commented 2016-07-26 02:50:02 -0400
This is just another example of how UNSOPHISTICATED Canadian politicians really are and how fucking stupid Canadian voters really are.

Canadian voters keep choosing lefties and keep taking it up the ass in return for some “socialist utopia” that doesn’t exist, nor will it ever exist.
commented 2016-07-26 02:21:50 -0400
So what is the rebel coming to? Complaining about the consequences of wealth disparity? I guess that is okay, as long as it justifies xenophobia and taking a stance against immigration.

Chris, you sound like the Ku Klux Klan complaining about the Jews owning everything. I bet Ezra the Jew must be really happy with your work.
commented 2016-07-26 01:57:33 -0400
Yeah take some of that laundered money, as far as i know that makes you part of the criminal enterprise. And lower house costs will mean nothing in Vancouver or other cities run by socialists , they will tax the hell out of the homes anyways, if you cannot afford the house you cannot afford the taxes they will charge you.
commented 2016-07-26 00:19:56 -0400
Addendum:
As Christopher Wilson has mentioned in one of his earlier report that taxes on new construction are too high in Lower Mainland therefore further raising the prices of real estate.
That’s not true, a vacant lot or a lot with 50-60 years old standing house is selling for almost the same price as a new constructed house on the same size lot. Moreover, in many cases the wealthy buyers have torn down houses which were merely 5-10 years old & in perfect condition, and constructed new structures according to their liking. So high taxes on new construction are hardly a deterrent to these wealthy buyers.
We need to stop this influx to bring the real estate prices to its real level.
commented 2016-07-26 00:11:40 -0400
The BC government doesn’t give a flying monkey about vacancy rates or foreign nationals. They see a problem and see how they can profit from it. Foreign nationals buying up property? We want our cut! It’s government extortion.
commented 2016-07-26 00:11:11 -0400
The buyers who willingly pays 20-25% above asking price wouldn’t have any reluctance in paying 15% tax. It’s their ill-gotten wealth which they want to invest anywhere outside China and what better place than Canada which bend over backward to accommodate people of other cultures, wealthy or parasites all are welcome.
It’s not about the old economic equation of ‘demand & supply’. 20 years ago there was a sort of an equilibrium, supply was tad higher than demand keeping the real estate affordable for locals, especially young couples who want to live & start their families here, because they had roots in this community. All this changed after 2000 when Canada almost doubled it’s immigration to around 300K per year (add another 350K of TFW & Students to that, after all they would also need some place to stay).
Even if we increase the supply by 100% it won’t solve the current problem for one simple reason; Chinese, Indians & Koreans (and other new immigrants from developing countries) with deep pockets have enough money to buy anything at any cost whatever comes in the market. The locals would still be kept out of the housing market.
On the other hand more supply is going to increase the population density exponentially further straining the already stretched infrastructure. Look at our roads & transit system it’s already running over it’s full capacity. In fact the Lower Mainland traffic is rated as the worst in North America.
Apart from the uncontrolled immigration of wealthy individuals from undeveloped & developing countries also leaves a very negative effect on host society. As we all know people from these countries usually create wealth by unscrupulous means, for them principles & values in life have little meaning, they bring the same zero values, crooked principles & corrupt practices to Canada and teach their children the unethical values to live with. So what we are actually doing is not only hurting the current generation but destroying the future of coming generation too.
Suggesting people to move to the interior or north may not be a very practical idea. Why should we encourage people who have roots in this city to move & make way for foreigners, who have little inclination of adopting Canadian culture.
commented 2016-07-25 23:19:31 -0400
The Chinese have become so adept at buying up our farm land—-that we don’t even notice. We are too busy sending planes to import Muslims that want to kill us.
Thank YOU —-Justin.
commented 2016-07-25 23:02:24 -0400
It was pretty stark!! The green line went straight down, and the purple line went straight up at the same time. That’s market supply. So what incentives did she announce for builders to start building? A cut in
Developer Fees? A cut in Land Transfer Tax perhaps? (if they keep the prices below a threshold)
commented 2016-07-25 22:21:17 -0400
The Clark legislation is a joke for multi millionaire and billionaire Chinese investors who seek to shelter or launder their money. A more effective law would be to outlaw Chinese investment in any real estate in BC (and for that matter Canada) unless the buyer occupies it THEMSELVES. The 15% is an abject joke.
How about finding out if its dirty money to start with?
commented 2016-07-25 21:36:18 -0400
I don’t disagree, David and Maurice. I just don’t think Clark’s vacancy tax will hurt do anything to solve the demographic discrepancy in the lower mainland. Seems to me immigration policy could go a long way to mitigating that particular problem.
The rental and affordable housing problem has to be addressed also but I don’t believe this tax is the way. It won’t just penalize foreign buyers, and not everyone who has a house in Vancouver is rich. Bottom line though is the government is in effect telling people what they should do with their own property. They do enough of that already. Besides how are they going to enforce it? Bylaw officers who come around and peer in your windows?
commented 2016-07-25 21:17:22 -0400
MAURICE POTVIN; I had the same experience. I felt like a foreigner in my own country. Couldn’t even read the store signs. All in Chinese. When I went in to buy groceries I was stared at like ; what the hell was this white guy doing in here?
The Hong Kong intrusion was a pox on Richmond. They were rude, entitled and racist. Then when Hong Kong went back to China they all flocked back there, The issue we have today in Vancouver is a bunch of Chinese Mafia connected millionaires and billionaires laundering their money at our expense and the Real Estate industry is capitalizing on it . In other words we are being exploited like a third world country.
commented 2016-07-25 20:58:35 -0400
I grew up in Richmond, BC, from the age of 9 until the age of 21, when I moved to the BC northern interior. That was in 1968. About 20 years ago I was watching a news story from my old Jr. high school, R C Palmer Junior High. Among the students, there wasn’t one single Caucasian face (not that I’m Caucasian… I’m Metis). They were mainly Chinese, with smattering of Sikhs. When I was with the BC forest Service, I once had to attend a conference in Richmond. Going for a stroll in downtown Richmond, I was hard pressed to find a single Caucasian face, or one single sign in English. To me it seemed like a foreign country….. far from the place I grew up in. They must have moved in en-mass for a good reason, and it must have cost a lot of money to do so. But they do seem to bring their insular community with them. I think it probably makes the original Caucasian inhabitants feel like strangers in their own land. I don’t believe there’s any nefarious intent, but when a lot of people with a lot of money, who tend to keep to themselves, take over an area, they make the original inhabitants feel cut off from the community, and the rising real estate costs and taxes cut all but the rich out of the housing market. I’m not pointing fingers, I’m just making an observation. I don’t like it, but I guess that’s my problem. It may be a hard sell if one’s roots and employment are there, but the answer may be to move.
commented 2016-07-25 20:37:59 -0400
Changing the city charter so that the they can implement and administer a vacancy tax so that they can meet their goal of meeting rental supply.?
I sure don’t agree with the government penalizing people who own homes, and forcing them to rent them when they go away. How long do you have to be away from your home for them to consider a tax on it? A week a month, 6 months? Maybe they should address the problems they have with affordable housing with zoning changes.
This wealth distribution is bullsht. I don’t like government dictating what people should or can and cannot do with their own property. You can’t even cut a tree on your own property in Vancouver. The city doesn’t need anymore powers. Robertson doesn’t need any help screwing land owners in Vancouver. No added tax on foreign owners isn’t going to deter them investing here. They are still going to buy up most of the high end stuff and leave them empty half the time. Stricter more specific zoning there would make a difference for crying out loud. Bad move Christie.
commented 2016-07-25 19:34:36 -0400
All politicians are ideologues, and they can’t see reason. They stubbornly and wrongly believe that they can westernize people who move here from China and other Eastern portions of the world. The opposite happens. It especially happens because of the irresponsibly large amount of imported people. The Western ethos is being murdered deliberately. It’s becoming perfectly acceptable to do things the Chinese way. Politicians can make a lot of money at that. That money coming in from China is corruption money. They have no qualms about offering large sums over asking because they need a place to put that bad cash. Their kids are driving 200,000 cars and they pay no taxes anywhere. According to Revenue Canada, neighbourhoods with 8 million dollar homes have the highest rate of poverty. You know corruption isn’t paying their share in China either, that’s why they have those homes here. They have a place to run to if China gets pissed at them.
That Chinese money will move out of Vancouver and suffocate the surrounding areas as well. There won’t be a small town for average Joe to run to.
commented 2016-07-25 19:31:16 -0400
Canadian Mongrel… You’re right of course that the problem is Lower Mainland centric, but it is an obvious problem and I await the miracle of building more affordable housing… Perhaps more of those converted steel shipping containers, stacked atop one another?… No joke… And the answer is to “get out of town” and into the B.C. interior or up Vancouver Island… The Alberta license plates in the Okanagan and up and down V.I. attest to that… I have also heard several times that the Lower Mainland influx by the wealthy Chinese has to do with Feng Shui… The Fraser River delta promotes good Feng Shui and hence curses it with overpriced housing…
commented 2016-07-25 19:19:41 -0400
I like Ms Clarke. Two sons now in BC from Alberta due to job opportunities. Have to thank Alberta’s invisible energy minister for the advice of going to BC if you became unemployed in Alberta due to the Non-Democratic Party policies.
commented 2016-07-25 19:13:09 -0400
Sorry Christopher, but your report was very lower mainland centric. There is one heck of a lot of BC beyond the lower mainland that has economy and affordable housing, people just have to move if they want the latter. Many expat Albertans have figured that out.
commented 2016-07-25 19:00:32 -0400
There’s a foreign investment crisis in Hongcouver realestate? This is news?