4 ms·
Too little, too late. If a foreign buyer can afford a $2m house, they can afford the $300k of extra tax. Also, many of the properties bought by immigrants are
by JanSolo 10y ago
Too little, too late. If a foreign buyer can afford a $2m house, they can afford the $300k of extra tax.
Also, many of the properties bought by immigrants are actually owned by syndicates who are based in Canada and therefore do not have to pay the tax.
- jethro_tell 10y agoPerhaps, but it makes it a bad investment. Or less of an investment at any rate.
- selectodude 10y agoThey're not investing. They're getting their money out of China. A loss is still a gain for them.
- quantumhobbit 10y agoWhat is the main motivation for getting the money out of China? Are they hiding the money from the Chinese government? Trying to leave China or planning for political instability? I don't understand why all this money seems to be pouring into just a few oversold cities instead of more diversified assets.
- Daishiman 10y agoCapital controls. Their investment opportunities in China are limited as long as they have their money there.
- drzaiusapelord 10y agoChina has more capital controls in place now to control outward money flow. I suspect a $300k tax that you may never get back is going to be a big demotivator to investing in Canada.
- thomas11 10y agoSo why does it need to be Vancouver where prices are already very high? Why not buy in another city that's more reasonable?
- emptybits 10y agoVancouverite here. I applaud this as a reasonable question. I understand why immigrating to Vancouver from China makes sense. It has great climate, is postcard attractive, easy China-YVR flights, has a dominant Chinese culture already with lots of Mandarin spoken and Chinese writing/advertisements, and it's generally very welcoming and embracing of Chinese. But for the investor only, who doesn't plan to live here ... it's a little harder to understand "why only Vancouver?" Some insight ... Vancouver has become very familiar to Chinese investors, so it's a known and well-researched entity to Chinese. Ask a friend, "where should I move my money?" and "Vancouver!" is a respectable answer. There is also now a large marketing machine that straddles China and Vancouver, whereby new and old Vancouver real estate deals are (sometimes exclusively) marketed directly to China. Systems like this (right or wrong) take time to develop and now have momentum. In short ... familiarity, habit, and support systems. Also, if an investor (or, often, their children) wants to spend any time at all living in their investment ... Vancouver tips the scales for the reasons in the first paragraph.
- hackerboos 10y agoBecause Vancouver's real estate is appreciating faster than nearly every other city in North America [1]. Not only are you washing money, you are likely going to see huge returns on your investment. 23% in a year would pay for this tax with a tidy profit at the end. [1] - http://www.cbc.ca/news/canada/british-columbia/new-figures-show-massive-growth-in-metro-vancouver-real-estate-prices-1.3524888 http://www.cbc.ca/news/canada/british-columbia/new-figures-s...
- boznz 10y agoWhats the point, there is always a loophole for the speculators
- kazinator 10y agoA foreign buyer is also considering the future performance of the $2M. If they believe that this new property transfer tax will cool the market such that the $2M will not grow (or maybe even shrink), they might look elsewhere. The tax is a heavy burden attached to a property. Whenever that property changes hands, the government takes a slice, and now that slice is a whopping 15% if the buyer is a foreigner. If a foreigner is is willing to pay 1,150,000 for your property, you're only getting 1,000,000. The money is sucked out of value of the transaction; it's neither the buyer's money nor the seller's money; it's both!