Yes, we are currently being fucked.
Our homeless problem is spiraling out of control and foreign buyers come in and hoover up desperately needed housing units and inflate an already ridiculously overpriced market.
It's a huge problem.
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Vancouver implements 15% tax on price of homes for foreign buyers.
- Thread starter freeofgreed
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Our homeless problem is spiraling out of control and foreign buyers come in and hoover up desperately needed housing units and inflate an already ridiculously overpriced market.
It's a huge problem.
If I remember correctly, income verification isn't a requirement for foreign buyers -- which is absurd if you think about it.
For what it's worth, banks require a large downpayment to mitigate the risk, but there are loopholes around that too.
http://www.theglobeandmail.com/real...s-favour-foreign-home-buyers/article31869946/
Bitmap Frogs
Mr. Community
Popping a bubble is a smart move.
Fucking bubbles can fuck up your economy for decades.
Fucking bubbles can fuck up your economy for decades.
The Hamburglar
Banned
Same shit has happened in London. London council/local government doesn't give a shit though and is more than happy that housing/renting market is insane.
ProfessorMoran
Member
It's not even for investment purposes per se, they're taking money out China and simply parking it in real estate, prices are out of whack, there are all kinds of ways to circumvent our anti money laundering system we have in place and we don't really know whether the funds are legit.
A bit heavy-handed but needed in the short-term. I'd rather we implement systems that rewards buyers for living at the property long-term. Flipping, idling or renting without constant renovation should be hit with high taxes rather than punishing possible legitimate foreign buyers.
ProfessorMoran
Member
Mainland Chinese are basically getting around the capital control system in China easily these days through dummy corporation that facilitate fund transfers that they don't even have to send funds through the banking system.
The problem isn't investing in properties, it's foreign capital which we have no way of verifying origin and legitimacy, and foreigners (including those holding PR cards) having right to own over citizens.
No, it's not. Foreign buyers weren't the cause of the problem, hugely restrictive zoning laws were. Something like >90% of Vancouver is zoned as single-dwelling residential.
It's a stock-standard supply issue being blamed on the Chinese.
It's exactly investment, they wouldn't buy houses unless it was a relatively safe way to keep money off-shore. If houses depreciated in value (which they should, living should be cheap, buying should be expensive) then they wouldn't be worthwhile investments unless you actually live in it. If the Chinese want to actually live there then nobody should say that's not legitimate ownership.
For the short time I lived there, Vancouver real estate bubble is the very definition of insanity. People working full degree-requiring jobs cannot afford to leave their childhood home, nor can their parents leave it to them because they can't afford to leave the house they live in right now.
Add in the way everyone there covers their ears and eyes and pretends the DTES doesn't exist, the way nobody cares about each other there outside of whatever activity they do with you, and the city is very much "fuck you, got mine".
It's gotten even worse where landlords started evicting people solely to AirBnB their apartment for more money.
Add in the way everyone there covers their ears and eyes and pretends the DTES doesn't exist, the way nobody cares about each other there outside of whatever activity they do with you, and the city is very much "fuck you, got mine".
It's gotten even worse where landlords started evicting people solely to AirBnB their apartment for more money.
TBH if you're moving to Vancouver and buying a home you are at least upper middle class.
I think this tax is only in the actual city of Vancouver, not the suburbs. It isn't cheap anywhere, but I'm sure most families looking at buying a home in this market can make do living 20-40 minutes outside of downtown.
It will make foreign investors think twice. You will be paying 15% more to buy, but now the other foreign investor that would have made you money is ALSO paying 15%.
Basically 30% premium if you were gaming the system.
ProfessorMoran
Member
The Chinese can't live here when they're not citizens.
entremet
Member
It seems there are some very attractive cities to the global elite.
We really need more cities, however, city development is very organic.
Let's not forget that major infrastructure of the big cities were built before Unions and basically exploitation. Major infrastructure will take much longer to due better working conditions.
ProfessorMoran
Member
When Markham prices are driven over a million we have a problem, it's still the fucking boonies and people are even buying houses just to have an address to send their kids to Pierre Trudeau which makes no sense.
Visas and naturalization exist.
ryutaro's mama
Member
I was gonna buy a house in Surrey and commute to Seattle everyday.
ProfessorMoran
Member
Then they shouldn't hand them out like candy, which they are right now, not just to mainland Chinese mind you. It's too easy to become a Canadian citizen.
There's a lack of oversight when it comes to foreign capital flooding in which isn't checked for legitimacy, and foreign ownership of domestic property.
It's not mostly regular Canadians buying to invest here, when you have people sending their kids here to house sit million dollar homes paying $20k to go to public schools, that's not normal.
Coalition-PezRadar
Director of Community, The Coalition
Vancouver also pushed people throwing numerous properties on Air BnB under biz taxes. Now you can only have one. It literally opened up a thousand long term rental units.
I don't agree that it is tainted simply by being over $50k. There are many ways to move funds out legitimately and I know many people that are slowly building up overseas savings by using the $50k limit each year. A family can move money out within that limit and get a lot of money out within a couple of years. If they sell a house to a foreigner they can asked to be paid in an offshore account, if they work for a foreign company they can ask to be paid into an overseas account, and if they get stock options from that foreign company the stock gains from sales go into a foreign account.
Because of the wealth disparity between subsistence farmers and those that work in the city, its likely that 0.01%, which is 13 million people probably isn't far off the mark (my rough guess would be 0.5, given the size of the overseas Chinese community), but I think you have a misunderstanding of the urban population.
I am a foreigner that lives and work in Beijing and the small 100 square meter apartment that I rent from a regular Chinese guy would go for over USD 1 million on the market here. The price per square meter where I am is about $12000/square meter, and there are places even more expensive. The Beijing average is about $6700/square meter--when you compare it to Vancouver, which ranges from $500-$2000/square meter, Vancouver is cheap to the average Beijinger, it doesn't take "people connected to the communist party at the highest levels" to want to invest or move to a cheaper area with a higher quality of living. I see ads all the time regarding investing or moving overseas, including touts on the street passing out flyers for buying overseas property. The phenomenon is way too widespread, and Chinese urbanites are too rich off of Chinese property, for it to realistically be simply corrupt party officials.
From my personal experience, I work in a law firm in China where the people I work with and for have salaries ranging from $100,000 to $1.4 million (based on their years of work). There are also people I know working in investment banking, consulting, hedge funds, and also people that have started up successful restaurant chains, etc. There is plenty of legitimate wealth earned without being "people connected to the communist party at the highest levels, who got ownership of state industry at key moments".
If they were simply looking for Chinese guides to property investment, it is fairly easy to find them everywhere. The reason why many pick these specific cities is because they want to live there--that's why there's an existing Chinese community in the first place, because Chinese wanted to move there. If it is just cash looking for security, there are many more places that are more secure and anonymous.
First off, I think the article exaggerates and gets many things wrong. I do not hear of Shanghai foreigners paying taxes to Beijing instead of Shanghai--Beijing actually makes you pay roughly $200 more in taxes for social insurance, while Shanghai exempts foreigners from the tax.
Even then, I don't think it is as bad as it sounds:
That means that the restriction applies to all non-Shanghai families, which would include Beijingers and other Chinese from outside of Shanghai as well as foreigners. Again, it is more restrictive for non-Shanghai Chinese, as they need to live in Shanghai longer than 1-year to buy a property, but the cities are removing the 1-year limit already.
http://www.ibtimes.com/china-relaxe...ore-real-estate-attempt-boost-slowing-2072571
https://www.thebeijinger.com/blog/2016/02/17/working-foreigners-may-now-buy-property-beijing
But for non-Shanghai Chinese wanting to buy in Shanghai, the rules are tightening:
http://www.shanghaidaily.com/busine...ghtening-policy-for-home-market/shdaily.shtml
There are stories of people entering into partnerships to streamline the process of getting in, but not looking at what they are agreeing to. As someone that works everyday to help foreign companies invest in China, I think your statement is overblown. China is the largest or second largest market for everything from iPhones, American cars, American fast food, etc. There are lots of foreign companies investing into China.
And even then rich speculators will just use their kids to hold property.
9 students own 57 million dollars worth of property in Vancouver with no legally traceable income stream
navii
My fantasy is that my girlfriend was actually a young high school girl.
Cheers mate!
There is absolutely a massive issue with the zoning and it is a huge contributor to the housing bubble. There is also a huge issue with ultra low rates getting people over-approved for large mortgages.
The fact is though the prices of housing have gone over the max that the local economy can support due to the influx of foreign home buyers. The number of homes that are left vacant is also very high, not reported in the stats and causing reported vacancies to plummet.
To fix:
Tax foreign homebuyers, or even make it illegal. Require positive proof, which should help with corporation shells. Make capital gains tax exemptions due to primary residence invalid unless it has been primary for at least 2 years to break flippers. Require that primary be declared each year on taxes to prevent double dipping. Aggressively rezone for multi-family residential (despite nimby whining) that includes a high proportion of three bedroom units (against developer whining). Ensure that family facilities (daycare, schools) are in place. Streamline approval process to spike supply hard.
Boom. Foreign homebuyer issue solved, bringing this to within the constraints of the local economic output. Flipper issue solved. Supply demand issue solved. Vacancy tax is nice but really hard to implement.
Emperor_Uriel
Member
This has to be implemented all across the US, and fast! New Yorkers can't afford to live in the city or Westchester anymore, and Californians are being similarly priced out from SF and the suburbs of LA.
We're already falling prey to our own nation's 1%. The last thing we need is the 1% of every other nation rushing in to fuck us over.
We're already falling prey to our own nation's 1%. The last thing we need is the 1% of every other nation rushing in to fuck us over.
Are they permanent residents? Or just on visas, I think there should be a distinction, the latter should not be allowed. I just think if it's restricted to only citizens, that it's too restrictive.
They can't be a resident as they are required to provide where the money came from. I would assume they are on visas.
â Narayan
Member
Essentially my thoughts. It's nice to hear that some effort is starting towards resolving this problem, though. The US could do with something similar as well.
entremet
Member
We can afford to rent, just not own.
Buying a home is not a right. The American Dream really developed a sense of entitlement in us.
I am not sure how I feel about this tax. My family immigrated here many years ago so this tax probably would have made it significantly more expansive for my family to purchase a home before immigrating then. We went through normal immigration and not investor-type which means we didn't get PR until years later. They should have implemented an empty-home tax instead because that's the big problem here. The rich people can probably transfer money to their friends or relatives in Canada and avoid this tax most likely. Now I am reading about thousands of construction jobs and other indirectly related jobs that will be lost because of this.
diablos991
Can’t stump the diablos
The tax needs to be larger. (At least double)
Hope to see a large tax come stateside on these foreign investors.
Wrong. Foreign capital has been a major influence.
I'm not going to argue that Vancouver doesn't have a lot of single family detached housing, but there has been plenty of studies, reporting and data that points to foreign capital being a major influencer on property valuations. Read the Globe and Mail, especially articles from Kathy Tomlinson, for more on this. As soon as the BC government started collecting data they found that there were double digits of sales going to foreign investors, which doesn't even count permanent residents and so doesn't fully capture the full impact of foreign capital. This is why they enacted the tax. The scope was significantly more than they expected.
While there still plenty of restrictive SFH areas in Vancouver the City has been slowly unwinding this, rezoning Marpole and Norquay for higher densities. Vancouver has never let up on building condos and there are still plenty under construction. If you factor in the surrounding cities of Burnaby, Richmond and Coquitlam, then you really get a sense of the large amounts of supply that is appearing. There are regional targets based on population growth and Vancouver has easily exceeded those each year. This is not like San Francisco where they are not building anything. Metro Vancouver is building a lot. The problem is that there's a speculative housing bubble, many of these units aren't hitting the rental market and affordable housing isn't being created.
I do think it's a problem that Vancouver has focused too strongly on small bachelor condos instead of family oriented townhouses and condos, which has exacerbated some supply problems, but this is not the dominant issue that drove up prices 30% in one year.
It is unlikely that such a tax would past constitutional muster.
In the past, California implemented laws against Japanese and Chinese people from owning land, and it was struck down by the California Supreme Court, decades later, as a violation of the 14th Amendment:
http://encyclopedia.densho.org/Fujii v. California/
A Supreme Court case briefly touched on the issue, but did not specifically rule on the issue because the case involved the foreigner using his US citizen relative to purchase the land and the court ruled that it violated the citizen's rights, but declined to rule on whether the foreigner's rights were violated (though some judges' concurrences imply that they would rule in such a way):
https://en.wikipedia.org/wiki/Oyama_v._California
Zoe
Member
Those laws targeted a specific set of people. This is for all foreigners, indiscriminately.
No, they didn't. The laws did not mention Japanese or Chinese, but it affected them because Federal laws did not permit them to have citizenship:
http://law.justia.com/cases/california/supreme-court/2d/38/718.html
Targeting all foreigners indiscriminately is still discrimination under the 14th Amendment:
There are also commerce clause issues, I would believe, since under the commerce clause, a state is not allowed to "regulate Commerce with foreign Nations, and among the several States"--California and its municipalities could not charge an extra tax for non-Californians (such as Texans), nor non-Americans.
Also, the Civil Rights Act of 1964 specifically prohibits states from discriminating based on national origin. More specifically, the 1968 CRA, also known as the Fair Housing Act, outlawed "Discrimination based on race, color, religion or national origin in the terms, conditions or privilege of the sale or rental of a dwelling": https://en.wikipedia.org/wiki/Fair_Housing_Act
TAJ
Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.
I knew someone from Taiwan who was a 25yo with a lower-middle class income and had >$40 million (in early '00s dollars) in LA area real estate in their name.
Heavy-handed would be banning sales to foreign buyers outright, like Mexico. This is the middle ground.
Heavy-handed would be banning sales to foreign buyers outright, like Mexico. This is the middle ground.
ProfessorMoran
Member
Your family probably got their house for less than 100k if it's many years ago, the foreigner real estate bidding wars are pushing houses to the millions. They're now going for houses over the million dollar range.
ProfessorMoran
Member
Foreigners aren't citizens and aren't protected under the constitution.
Incorrect. It is long established law that they receive certain Constitutional protections if they are under the jurisdiction of the US or its states.
Look at Section 1 of the 14th Amendment. The first two provisions are regarding citizens. The next are for any persons.
And the case regarding Guantanamo detainees established that detainees have certain Constitutional rights because the US has jurisdiction over Guantanamo Bay:
https://en.wikipedia.org/wiki/Rasul_v._Bush
That's a pretty selfish way of looking at it...
The real estate (and asset) market world wide is over inflated, at some point it is going to burst. Foreign investors have the least to lose, they walk away and it is the citizens that are left with HUGE mortgages that they can't afford, which means they walk away since interest rates go up..its a huge spiral and the banks and citizens are left holding the ball.
Not to mention that it is the young couples that are losing out, if they can't afford the security of owning their own house they delay having kids so they can save to buy one..and the house prices keep going up so they keep saving (or they borrow a huge amount and when the bubble bursts they lose everything)
Who do you think will be paying for the government services while you're retired? The kids of tomorrow...and if the population is being suppressed due to over inflated house prices..what happens next?
It is obviously more complicated than what I've outlined but there is a good reason for what Canada has done and it is more than just a selfish out look on being able to sell your house for more in the future than what it is worth today (signs point to that not being the case anyway...as the biggest generation, the baby boomers die/sell off and there aren't enough younger generationals to have the demand needed to increase house prices for the future)
Yeah I think my parents did get a house around 100k. But why should these well-intentioned immigrants have to pay extra 15% to buy a place to move in? That's why I think some tax on empty homes would make more sense since that targets more of those investor-type people and leave the rest of us alone.
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