Agent supports new tax, but does he believe it will make a difference?

by Justin da Rosa27 Jul 2016
A Canadian agent -- who also operates in Hong Kong -- agrees with the recently announced 15% tax on foreign buyers in British Columbia, and believes a similar tax is coming to Toronto.

“I think it’s a great idea. I do agree with it. But what are they going to do with the 15%? Are they going to use it to offset the land transfer tax for first-time buyers. That’s what they should do,” Omer Quenneville, an agent with Homeward Real Estate, told REP. “That would make it easier for first-time buyers to get into the market. Of course, they won’t; it’s going to go into the general coffers.”

On Monday, British Columbia Finance Minister Mike de Jong announced a 15% land transfer tax for all Vancouver real estate purchased by foreigners.

The additional tax will take effect August 2.

And this type of tax was actually suggested by Quenneville, who is also licensed in Hong Kong, a few years ago.

Speaking to REP sister publication MortgageBrokerNews.ca in February 2014, Quenneville suggested a similar tax requirement currently required of foreigners who purchase Hong Kong real estate.

“It’s called ‘stamp duty’ but it’s basically the same thing [as a land transfer tax]: The way they do it is they charge similar to what the provincial government charges here, about two and a half per cent every time you purchase a piece of property,” Quenneville said at the time. “What gets really interesting is if you do not have a Hong Kong address – in other words a foreign investor – you have to pay an additional, I believe it is, 18 per cent.

“So all these foreign investors who are pushing the market up and making a bundle would have to pay a significantly higher land transfer tax.”

As to what impact Vancouver’s recently announced tax will have, Quenneville argues the current low Canadian dollar will still entice foreign buyers. And he also believes a similar tax will be instituted in Toronto.

“They’re still 10% ahead with the tax; When the dollar was at par, this would have made a big difference,” he said. “Trust me, when [Ontario Premier] Kathleen Wynne gets wind of this, she’ll be slapping it on in Ontario pretty quick.”
 

COMMENTS

  • by Leafs Rule 67 7/27/2016 10:42:22 AM

    As supply and demand always will rule the day this is a bad tax. Also, as with every tax, a legal way around this likely exists for example by placing a Canadian family member or friend on with title and take back a large mortgage to protect the interest this probably goes around the title issue. So this may already be the solution (get legal and tax advice before implementing) . Thus, I hope all vendors of properties ie current and future home owners vote out the government since if it does lower the price then the current home owners get burned by this tax grab. So its bad business, bad tax policy and silly. I hope it doesn't come to Ontario and if Wynne decides to put it on, I hope all home owners vote out the current government and the next government removes this at once. But sad to say, once a tax is imposed most governments are unlikely to reduce the tax as they over spend and need money.

  • by Me 7/27/2016 11:31:00 AM

    While the tax might make sense in Vancouver, where there's limited space, it makes no sense for Toronto. All it will do is slow down sales (economic activity) in the high price neighbourhoods and has nothing to do with the supply problem causing prices to skyrocket across the board. The Greenbelt Act(s), the over-regulation (as noted in the other article), influx of immigrants from small towns, other provinces and abroad among other things. BUT - it will sell well with a disingenuous sales pitch eh? MAKE THE RICH PAY they'll chant - to the screaming hordes of backers!!

    It's subtle but important policy issues like this that causes Socialists to wreck societies. When you add in things like the abuse of the Forfeiture Act - taking the homes of innocent ppl to pay their bills, or the abuse of the Environmental Act to go after innocent companies and chase away 10s of millions in business, to the Regulators over-regulating and even seeking to regulate the private market out of existence, and the humungus debts etc etc - you drive the economy into the ground!

  • by J-Jan 7/27/2016 12:44:58 PM

    I think ...through analysis ... by adding 15% tax to the foreign buyers ... Government (Municipalities) will benefit ... that won't address blow up prices ...Municipality must release the lands that can be built .... this matter has been analyzed and it seems to be the only way to bring the matter under control....hope a petition or form can be created to pressure the municipalities ...

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