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How the new foreigner tax is affecting Canadian homeowners

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Real Estate Professional | 17 Aug 2016, 10:02 AM Agree 0
Cardboard moving boxes are piled about the living room of an otherwise half-packed house nestled on a tree-lined residential street in a quiet Vancouver-area suburb - a scene frozen in time that the home's owners blame on British Columbia's controversial new tax on foreign buyers
  • BC Resident | 17 Aug 2016, 11:38 AM Agree 0
    Another example of how the BC Government is putting Families First...... NOT
  • CV Mortgages | 17 Aug 2016, 11:55 AM Agree 0
    The market is still hot. If the sale falls through, re-list the home and sell it to someone else. Private companies can bridge the financing for a little bit. Just contact your mortgage broker!
  • Clarence | 17 Aug 2016, 11:58 AM Agree 0
    I am certain that the courts in BC will be quite busy, for years to come, as a result of this poorly thought out legislation.
    This program (new tax) should have been effective only on deals that were not firm (unconditional) as at August 2/16.
    All agreements that went unconditional after that date, the parties were aware of the new tax.
    Many innocent people will have their credit ratings damaged and be in the same position as the case outlined above.
    I can't see how the tax being effective on firm deals prior to August 2nd would have made any difference in circumventing the housing issue it was supposed to relieve.
    In my opinion, the BC government should have to stand good for any costs (legal or otherwise) associated with their misguided inflexibility.
    I am also sure that it is within their power to correct this effective date.
  • Cathie B at Remax South Shore Realty | 17 Aug 2016, 11:58 AM Agree 0
    Send the foreign buyers to Nova Scotia. We have a number of foreign land owners here and co-exist quite well. We also have lots of listings to choose from here on the South Shore.
  • Just a thought | 17 Aug 2016, 01:18 PM Agree 0
    To the person who said the market is hot and just re-list, that is far from the truth. As a real estate agent I can tell you the market has changed dramatically. Just wait for the August stats to come out, in sure it will paint a picture of decreased sales volume and likely a price drop month over month. Banks are not lending on these bridge financing deals, and if so, it can be extremely costly. A retroactive tax puts governments first, families last. I would hate to get a call from the restaurant I ate at last night to say I owe more money because they put in a new tax overnight. Same situation. Not only is this tax punitive, it's going to have adverse affects on the people we really need, skilled workers who want to put up roots in the lower mainland and pay taxes. Why would any skilled worker want to come here and buy a home when likely their entire first years income would have to be put towards a tax on purchasing a new home. What should have been done? I think we should have treated homes like the investments they've become. If the home is your primary residence than fine, but and sell as you wish. However, if you don't pay income taxes in Canada than the sales proceeds should be taxed as a capital gain. Fairly easy to implement with checking with revenue Canada. On the sale lawyers would just hold back xx% until Revenue Canada can verify whether or not you have to pay capital gains tax.
  • Nick | 17 Aug 2016, 09:34 PM Agree 0
    First of all, we must assume that the government's action is only to suppress the hot realty market in the future and not to penalize the buyers nor the sellers.
    Then why didn't the government announce the new tax system half year earlier and I think over 99% of the buyers and sellers won't be affected because most of the closing dates are within such a period of time except the Pre-construction properties. In such cases the buyers should be allowed to assume their contracts to local buyers without paying the extra tax.
    If buyers had known earlier that they could not afford the tax, they could have chosen not to buy a property instead of losing all the deposit after entering a firm offer and getting nothing. For the sellers, on the other hand, they might not have the necessary money to close the deal for their new home and so on . . . .
    So the Buyers, the Sellers and the Government of B.C. are ALL in a lose-lose-lose situation.
    The worst scenario is that, in the future, no investors in the world would trust the B.C. government in ALL Respects. Who knows that after they have entered into any agreement for the investment in B.C. and, all of a sudden, the government changes the law overnight and charge them 100% for the tax ?
    In Toronto, maybe one day the government copies similar act from B.C. cause they also want to get more income in the name of suppressing the hot realty market.
    For buyers who want to sell their homes at the same time in order to get the necessary money for closing the new home, to play save, I think they should ask the Realty Agent to put a conditional clause in the offer, saying that the offer is conditional upon the buyer has sold their property, otherwise the offer is null and void.
  • Alister MacLean CCIM | 18 Aug 2016, 11:09 AM Agree 0
    The foreign purchase tax will not as Housing Minister Rich Coleman states "address the issue of supply & demand".
    Adding Tax Penalties on buyers will do nothing to helping affordability or supply, the tax only causes a knock on effect shifting demand towards a lower price portion of the market as buyers adjust to meet their new tax penalty.
    The Tax does absolutely nothing to solving the problem of lack of supply.
    The housing supply problem is to a great degree a government induced issue in the first place - the cause and effect - arising from over restrictive regulation in planning and zoning, excessive costs and charges to get approvals, and skyrocketing development fees that ultimately affects the new build street price. In essence the government has caused the base cost to construct affordable new housing an impossibility for developers to cash flow! The results of their excessive taxes and charges and short shortsightedness have led to the current lack of supply!
    Instead of increasing taxes, all levels of government need to re-examine their development policies, they need to drastically reduce pre-construction charges and red tape, and start providing proper development incentives to increase the new housing supply to the market. Mindlessly taxing home resales to fill government coffers is not a solution.
  • Russia lives in Canada | 19 Aug 2016, 03:46 PM Agree 0
    It's a xenophobic tax. Period. I though we lived in a free market. When is it fair to tax one group more than others?
  • judy | 29 Aug 2016, 03:32 PM Agree 0
    So now foreign buyers have been "disaffected", local buyers are hoping for "bargain", and sellers are stymied. Nothing like ruining a perfectly good "Free Market" in a Democracy with government-made "Un-Certainty"! This is the kind of move the NDP usually make.....
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