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I live in Vancouver and have been following this closely. This proposal is disappointing. The better solution imho is to tax based on where the owners file th

by kareemm 10y ago

I live in Vancouver and have been following this closely. This proposal is disappointing. The better solution imho is to tax based on where the owners file their taxes[1], not based on whether the buyer is a citizen or permanent resident. Reasons: citizenship is for sale through the Quebec Immigrant Investor Program[2] so if you're wealthy, you can effectively bypass this tax. If you can't, using a relative as a proxy buyer will let you bypass the tax. And preventing non-permanent residents from buying means any immigrants who come to Canada but aren't PRs will pay this tax. These seem like the exact kind of people you don't want to disincentivize from buying - people who are willing to take a risk to come to Vancouver, but aren't rich enough to just buy their way in. Taxing people based on where they file their taxes makes a lot more sense to me - if you're paying taxes in Canada, you're not using Vancouver housing strictly as an asset class which is what should be discouraged in order to have a healthy, diverse city of people who own where they live. 1- http://www.theprovince.com/business/proposed+could+high+cost+housing+residents/11659651/story.html http://www.theprovince.com/business/proposed+could+high+cost... 2- http://www.immigration-quebec.gouv.qc.ca/en/immigrate-settle/businesspeople/applying-business-immigrant/three-programs/investors/ http://www.immigration-quebec.gouv.qc.ca/en/immigrate-settle...

Tiktaalik 10y ago
This policy affects foreign persons, but the issue is really foreign capital. As you say this does nothing regarding the issue of persons buying citizenship via the QIIP and coming over to BC, which is what the vast majority of people using the QIIP do. I have no idea what the process would be, but a real step forward would be to for the Federal government to work to end the QIIP, though I recognize this would probably open a can of worms and raise a bunch of new issues with Quebec.
- kareemm 10y ago
  > I have no idea what the process would be, but a real step forward would be to for the Federal government to work to end the QIIP, though I recognize this would probably open a can of worms and raise a bunch of new issues with Quebec. According to Ian Young the Feds can end the QIIP[1]: Although Quebec is in charge of choosing its immigrants, Federal authorities actually issue their certificates of permanent residency, and decide the speed at which to do so. According to Vancouver immigration lawyer Richard Kurland, there is no doubt that “the feds have the legal right, pure and simple, to cancel the program”. “This is not about a constitutional or legal barrier. There is neither,” he said. 1 - http://www.scmp.com/news/world/united-states-canada/article/1983336/one-point-plan-tackle-vancouvers-housing http://www.scmp.com/news/world/united-states-canada/article/...
  - redthrowaway 10y ago
    They have the legal right, but it would be politically awkward, and I'm not sure Trudeau is looking to annoy his base in Quebec to serve the interests of British Columbians, who have never been a part of the LPC's base and only recently elected more than a couple Liberal MPs. Similarly, it's well within the Federal Govt's rights to mandate free trade within Canada, but they only had the political willpower to suggest provinces work together to reduce barriers.
    - allengeorge 10y ago
      Any idea why that is? I've often wondered why they don't just mandate it - I don't see the massive political fallout from mandating free trade in goods and services within Canada...
      - redthrowaway 10y ago
        Because all of the protectionism in Canada is in support of local interests: dairy farmers, brewers, etc. Remove the trade barriers, and the crappy ones will die. That's a much bigger deal politically than the win from efficient firms doing better and prices going down. The federal government just has no real incentive, short of it actually being in the nation's best interest, to force internal free trade. They would have to expend significant political capital to do so.
awqrre 10y ago
You can't also use a relative as a proxy buyer to avoid the "where the owner file his taxes" requirement?
kstenerud 10y ago
Your proposed solution doesn't solve the problems you brought up. Someone willing to take a risk to come to Vancouver will have last filed last year's taxes in a foreign country, and will still be subject to the land transfer tax. Plus, it still won't stop the use of relatives as proxies. A tax based on previous tax location is effectively an immigration tax against home buyers. I'm already being bit by the existing home transfer tax because I've only been back in Canada for 6 months, and so I'm disqualified for tax relief on my home; the exact opposite of what the tax law was intended to accomplish. With your proposed law, I'd be hit with the new tax as well.
- kareemm 10y ago
  If you waited a year to file your taxes in Canada before buying you'd avoid the tax. If you read the article above about taxing based on where you file, the economists who proposed the tax propose it as an annual tax. So if you bought before you filed in Canada, you'd only pay in the first year. Subsequent years you'd file in Canada and be exempt from the tax.
  - Grishnakh 10y ago
    Another thing they could do is make it refundable: if you actually move in and start filing taxes there, then you get the first one (where you were taxed because the previous tax filing was out-of-province) refunded to you the next year.
  - kstenerud 10y ago
    Once again: Why should immigrants be penalized?

by kareemm 10y ago

Tiktaalik 10y ago

This policy affects foreign persons, but the issue is really foreign capital. As you say this does nothing regarding the issue of persons buying citizenship via the QIIP and coming over to BC, which is what the vast majority of people using the QIIP do. I have no idea what the process would be, but a real step forward would be to for the Federal government to work to end the QIIP, though I recognize this would probably open a can of worms and raise a bunch of new issues with Quebec.

kareemm 10y ago
> I have no idea what the process would be, but a real step forward would be to for the Federal government to work to end the QIIP, though I recognize this would probably open a can of worms and raise a bunch of new issues with Quebec. According to Ian Young the Feds can end the QIIP[1]: Although Quebec is in charge of choosing its immigrants, Federal authorities actually issue their certificates of permanent residency, and decide the speed at which to do so. According to Vancouver immigration lawyer Richard Kurland, there is no doubt that “the feds have the legal right, pure and simple, to cancel the program”. “This is not about a constitutional or legal barrier. There is neither,” he said. 1 - http://www.scmp.com/news/world/united-states-canada/article/1983336/one-point-plan-tackle-vancouvers-housing http://www.scmp.com/news/world/united-states-canada/article/...
- redthrowaway 10y ago
  They have the legal right, but it would be politically awkward, and I'm not sure Trudeau is looking to annoy his base in Quebec to serve the interests of British Columbians, who have never been a part of the LPC's base and only recently elected more than a couple Liberal MPs. Similarly, it's well within the Federal Govt's rights to mandate free trade within Canada, but they only had the political willpower to suggest provinces work together to reduce barriers.
  - allengeorge 10y ago
    Any idea why that is? I've often wondered why they don't just mandate it - I don't see the massive political fallout from mandating free trade in goods and services within Canada...
    - redthrowaway 10y ago
      Because all of the protectionism in Canada is in support of local interests: dairy farmers, brewers, etc. Remove the trade barriers, and the crappy ones will die. That's a much bigger deal politically than the win from efficient firms doing better and prices going down. The federal government just has no real incentive, short of it actually being in the nation's best interest, to force internal free trade. They would have to expend significant political capital to do so.

awqrre 10y ago

You can't also use a relative as a proxy buyer to avoid the "where the owner file his taxes" requirement?

kstenerud 10y ago

Your proposed solution doesn't solve the problems you brought up. Someone willing to take a risk to come to Vancouver will have last filed last year's taxes in a foreign country, and will still be subject to the land transfer tax. Plus, it still won't stop the use of relatives as proxies. A tax based on previous tax location is effectively an immigration tax against home buyers. I'm already being bit by the existing home transfer tax because I've only been back in Canada for 6 months, and so I'm disqualified for tax relief on my home; the exact opposite of what the tax law was intended to accomplish. With your proposed law, I'd be hit with the new tax as well.

kareemm 10y ago
If you waited a year to file your taxes in Canada before buying you'd avoid the tax. If you read the article above about taxing based on where you file, the economists who proposed the tax propose it as an annual tax. So if you bought before you filed in Canada, you'd only pay in the first year. Subsequent years you'd file in Canada and be exempt from the tax.
- Grishnakh 10y ago
  Another thing they could do is make it refundable: if you actually move in and start filing taxes there, then you get the first one (where you were taxed because the previous tax filing was out-of-province) refunded to you the next year.
- kstenerud 10y ago
  Once again: Why should immigrants be penalized?