BC Introduces New 15% Foreign Buyers Tax - Update: Student Files Class Action Lawsuit

[DonLever]

from CKNW:

 

Quote

 

Premier Christy Clark and her government are going further than many expected in addressing the housing affordability crisis in Metro Vancouver.

The government is bringing in an additional property transfer tax of 15 per cent to apply to foreign nationals who buy homes in Metro Vancouver.

Finance Minister Mike de Jong introduced the new property transfer tax as part of new legislation introduced today, including

• Creating new measures to help make home ownership more affordable,
• Establishing a fund for market housing and rental initiatives,
• Strengthening consumer protection,
• and giving the City of Vancouver the tools it requested to increase rental property supply.

That new property transfer tax takes effect as of August 2nd.

NDP leader John Horgan says this is something new from the Clark government, and clearly recognition the matter can no longer be ignored.

 

From CKNW:

 

It’s the first legal challenge of the B.C. Liberals foreign buyer tax – a class-action lawsuit has been filed in B.C. Supreme Court.

Lawyer Luciana Brasil alleges the tax discriminates against foreign buyers and violates over 30 international treaties.

“And those treaties include provisions that say contracting countries are not to give their citizens or nationals any treatment that is more favourable than those of the other countries. These persons just because of their nationality are now having to get a treatment that is less favourable than a Canadian buying the exact same property.”

 

Brasil says the lead plaintiff is a Chinese University student who is forced to pay $84,000 in additional tax.

She bought a $560,000 dollar home in Langley and could lose her down payment if she doesn’t come up with the additional tax.

“The province here chose to impose the tax based on nationality and country of origin, and that’s essentially an area of federal jurisdiction so they shouldn’t have been able to do that

 

 

[grandmaster]

Doesn't go far enough. The buyers have lots of money so make it a harder hit. 50% would be a good starting point. 

[taxi]

5 minutes ago, grandmaster said:

Doesn't go far enough. The buyers have lots of money so make it a harder hit. 50% would be a good starting point. 

15% is a lot....

 

It pretty much kills a ROI for anyone planning to flip in the short term. Keep in mind we are talking about a tax on the value of the home, not just the profit. So a 50% tax would mean that someone would pay $500k on a 1 mil purchase. 

 

The bigger issue is the difficulty with enforcing this. That being said, this creates some serious incentive for the government to after people. Hopefully, they also include some stiff penalties for people who get caught evading.

[Warhippy]

Man...the amount of "students" in BC and resident "caretakers" is about to skyrocket 

 

Look at the fine print.  The loopholes to avoid this are so big you could drive Clarks ego through it towing Trump's self involvement 

[trek]

How will they determine foreign money purchasing property via shell companies registered in Canada? Only the dumb foreign investors are using their personal names/citizenship to register property.

 

Also, they should require proof of employment and audit income tax filings. I.e. no students owning million dollar mansions.

[Warhippy]

5 minutes ago, trek said:

How will they determine foreign money purchasing property via shell companies registered in Canada? Only the dumb foreign investors are using their personal names/citizenship to register property.

 

Also, they should require proof of employment and audit income tax filings. I.e. no students owning million dollar mansions.

Exactly.

 

But none of those issues are addressed so it's just lip service 

[taxi]

14 minutes ago, trek said:

How will they determine foreign money purchasing property via shell companies registered in Canada? Only the dumb foreign investors are using their personal names/citizenship to register property.

 

Also, they should require proof of employment and audit income tax filings. I.e. no students owning million dollar mansions.

The whole "shell corporation" thing isn't that big of an issue. The tax applies to "foreign corporations":

• Quote

  is incorporated in Canada but is controlled in whole or in part by a foreign national or other foreign corporation, unless the shares of the corporation are listed on a Canadian stock exchange

So the bigger issue here is determining who actually owns the corporation, but having a "shell" in itself won't help you.

 

[grandmaster]

24 minutes ago, taxi said:

15% is a lot....

 

It pretty much kills a ROI for anyone planning to flip in the short term. Keep in mind we are talking about a tax on the value of the home, not just the profit. So a 50% tax would mean that someone would pay $500k on a 1 mil purchase. 

 

The bigger issue is the difficulty with enforcing this. That being said, this creates some serious incentive for the government to after people. Hopefully, they also include some stiff penalties for people who get caught evading.

Yeah it is a lot. I want it to be that way so we stop all of this. 50% is something a rich foreign buyer will think twice about as opposed to 15. 

[taxi]

I posted this in the other thread but:

 

http://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax

 

http://www2.gov.bc.ca/assets/gov/taxes/property-taxes/property-transfer-tax/forms-publications/is-006-additional-property-transfer-tax-foreign-entities-vancouver.pdf

 

The tax applies to everyone but permanent residents and citizens. Any corporation even partially owned by foreigners is taxed. Putting property in someone else's name does not make you exempt. I see no fine print about "students" and "care-takers". 

[grandmaster]

26 minutes ago, trek said:

How will they determine foreign money purchasing property via shell companies registered in Canada? Only the dumb foreign investors are using their personal names/citizenship to register property.

True. They will get their family to take care of things. 

[taxi]

1 minute ago, grandmaster said:

Yeah it is a lot. I want it to be that way so we stop all of this. 50% is something a rich foreign buyer will think twice about as opposed to 15. 

You don't think a "rich foreigner" will think twice about losing $300k on a 2million dollar purchase? You don't get rich that way.

[DonLever]

There will be always loopholes no matter what legislation is passed.  At least this is a start.

 

Besides, there are other issues besides foreign ownership causing house prices to rise.   Even if there is ban on foreign ownership, prices are not going to drop 50%.

[RRypien37]

34 minutes ago, Warhippy said:

Man...the amount of "students" in BC and resident "caretakers" is about to skyrocket 

 

Look at the fine print.  The loopholes to avoid this are so big you could drive Clarks ego through it towing Trump's self involvement 

This times 100.

 

Just a nice ploy to try to pull a fast one to try to appeal to the masses. 

 

Basically status quo continued. 

[cabinessence]

It still shows that Vancouver is for sale regardless of whether you want to live her and contribute or not. It won't change much. Imagine how any of these alleged homes owned by Canadians are "owned" by a PR who has no intention of getting involved in the community but stays here to help funnel the illegal money coming through. Cue bass solo.

[Tortorella's Rant]

Too late.

[Warhippy]

39 minutes ago, taxi said:

I posted this in the other thread but:

 

http://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax

 

http://www2.gov.bc.ca/assets/gov/taxes/property-taxes/property-transfer-tax/forms-publications/is-006-additional-property-transfer-tax-foreign-entities-vancouver.pdf

 

The tax applies to everyone but permanent residents and citizens. Any corporation even partially owned by foreigners is taxed. Putting property in someone else's name does not make you exempt. I see no fine print about "students" and "care-takers". 

Just wait.  

[Warhippy]

38 minutes ago, taxi said:

You don't think a "rich foreigner" will think twice about losing $300k on a 2million dollar purchase? You don't get rich that way.

You don't think they will get cousin ling ling to sign the purchase agreement to be a 10% owner thus avoiding such legislation?

Come on man...

[taxi]

7 minutes ago, Warhippy said:

You don't think they will get cousin ling ling to sign the purchase agreement to be a 10% owner thus avoiding such legislation?

Come on man...

If you actually read the legislation, even partial foreign ownership is enough. But yes, putting the property in someone else's name is an issue. The legislation does address this though, as holding the property in trust for a foreigner and not disclosing it can lead to up to a $200k fine and 2 years in jail. 

 

How much will the government pursue this? That's another issue.

 

You're comment about "students" and "caretakers" appears to be made up.

[Warhippy]

34 minutes ago, taxi said:

If you actually read the legislation, even partial foreign ownership is enough. But yes, putting the property in someone else's name is an issue. The legislation does address this though, as holding the property in trust for a foreigner and not disclosing it can lead to up to a $200k fine and 2 years in jail. 

 

How much will the government pursue this? That's another issue.

 

You're comment about "students" and "caretakers" appears to be made up.

Incorrect as what you're linking is a literal framework which will be debated reworked and passed.

 

I assure you that there WILL be amendments about it, as well yes people living here WILL in fact be able to help with home purchasing which we already see in very large cases.

 

What IS amusing though is that there is little to no mention of this being pushed forward and hammered home over the last 5 months by Horgan and the NDP.

 

Yet pre-election here comes the Liberal tidbit

[Realtor Rod]

*sigh* Is the BC population this dense to not see what is really happening here  (besides nothing)?

 

She is pandering for votes using the hot button topic of the day.