Vacant Home Tax
Vancouver implements new Vacant Home Tax to free up 25000 homes for rent.
I would think rest Canadian cities will follow.:argue2: http://www.greaterfool.ca/2017/11/08/too-late-4/ http://r.search.yahoo.com/_ylt=AwrSb...ORojMh0yYJm2E- |
You paid for a property and you pay property tax on it. Why on earth should the government care what you use your property for. Sounds like Soviet Russia.
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Is this really a measure to get more housing available or a veiled tax grab? The people who can afford to leave a home vacant in high rent districts can afford more taxes. This will do nothing to help the housing crisis, but will give the government’s more money to continue their anti business crusade. |
I applaud this as it is designed to get rid of forgiven owners who are over inflating the value of homes in Va and TO. Chinese billionaires have been scooping up property and then just sitting on it because they know the value will rise when the he market is so strong because of there purchases. Regular residents can't afford a place to live all because some wealthy person in another country is playing games.
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Foreigners are doing the leg work, driving up the prices. Roll the dice, throw down some of your own cash, buy a house and wait for the dollars to roll in. After all it’s easy.
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We got the same problem here in Canmore, but if you can afford a weekend home here you could afford any kind of tax. If you own a yacht do you really care how much it costs to fuel it up.
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And they're not all filthy rich. Many struggled and sacrificed to be able to own a place in their paradise, (most being a small condo). Why penalize them for their efforts? Some are very wealthy and they've built their McMansions. But many have taken risks, hard work and sacrifice to achieve their wealth. Why penalize them for their success? ..... because that's the Canadian way. |
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Once the Chinese zero in on Alberta it will become more obvious for you |
Not sure if that's the best way to address the problem, but there is certainly a problem that needs to be addressed. Maybe a 50% tax on foreign ownership of property and use the money to build public housing. Make the money raised go to the issue, not into government general revenues.
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Another reason; a great number of houses/condo's are rented out and the proceeds of rental are never claimed as income. In CRA's eyes this will be a godsend, the implications of this will mean countless millions now being claimed and paid on. |
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Buying votes is lucrative apparently. |
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They aren't talking about vacation or rental homes the target is houses and condos bought by foreign conglomerates that buy dozens of dwellings then board them up no utilities are ever connected to them, In Toronto they estimate there could be as many as 65,000 driving prices up and making it unaffordable for most average people and causing as housing/rental shortage. It will eventually lead to the "bubble burst" everybody's been talking about for years
Vancouver demanded that B.C. amend that city's charter to allow it to impose a first-in-North-America vacancy tax that will go fully into effect in 2018. Homeowners are getting mailed notices warning them that they will have to make a declaration about the occupation of their property in 2017 by February of next year. If their property was not occupied by the owners or family and if it was not rented for at least six months in 2017, they will have to pay an additional 1 per cent of their home's assessed value in property tax. https://beta.theglobeandmail.com/new...beandmail.com& |
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How do you know this is dirty money? |
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Also it's not clear to me how your boogeyman can be held responsible for taxes enacted by the provinces. |
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https://beta.theglobeandmail.com/rea...beandmail.com& |
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Most likely the assessed value for property taxes is years behind the actual value, so the 1% is an even smaller part of the overall investment. Politicians pandering to the stupid while actually doing nothing. |
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But the net effects are: (1) house prices have risen by a factor of 3 or 4 in the past 5 years, with most of the increase over the past 2 years (2) these foreign buyers were rushing to beat the currency controls being enacted by the Chinese government, and getting their money out any way they could - I don't know how much got filtered through casinos, likely not enough to buy houses, but also by currency runners known to exist in Hong Kong, by overt "investments" in businesses offshore from mainland China, which are sometimes shell companies, etc. Myriads of ways (3) My sons both make good money, and have saved well into the 6 figures each - enough to buy a typical home ca$h in many parts of the country, but to buy even a small, pre-war 2 or 3 bedroom bungalow in southern Ontario pretty much anywhere, not just in the city, they'd be assuming mortgages of $500 thou, $600 thou, maybe more, which carries for an amount even they, with their decent incomes, would find hard to handle. To top it off, several of the homes purchased up until a foreign/offshore buyer's tax of 15% was enacted April 2017 (see http://business.financialpost.com/pe...o-cool-housing) are still sitting empty, with the owners still hoping that the market will recover enough to offload their investment to non-foreign-owners. That ain't happening thus far. Toronto (City of) is also looking at a vacant housing tax, and good on 'em. I sincerely hope none of the young people in Alberta are ever forced into perpetual renting instead of home ownership due to the same situation. "Think of the children", to paraphrase, but in a real sense. O.N.G. |
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I bet most would feel different if they could invest in tropical properties and then have those investments penalized for no other reason than being foreign. Sad world we reside in. |
Simple to avoid the tax, rent out to an absentee tenant for exactly the value of your property taxes. No net income so no profit to tax by the gubmint. How can you hold a landlord responsible for a tenant to be present? I see a business here, I will be your absentee tenant for a very small fee.
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If they really wanted to improve things they would have put a moratorium on foreign investment and looked at ways to close up all the loopholes and multitude of "work around's" for that inflow. Instead they bring in a change that just happens to bring in more tax dollars while hardly nipping a the edge of the problem.
When you consider where most of the foreign money is going (hugely expensive houses) 1% is likely inconsequential to their decision. This is about moving money out of unstable dictatorships where money could be confiscated in a heartbeat rather than moving it for the big investment gains. If they get the RE gains then great but just having their assets tied up in a safe haven is really what they are after...even if there is a cost. Kinda like laundering money. 70% legit safe money is better than 100% illiquid funds subject to confiscation. Are they going to be worried about bothering with managing a rental because of 1% cost? They are likely to see a bigger hit by letting renters in. Not like renters tend to look after other peoples stuff very well. |
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If the average home in Vancouver > $1,000,000.00 then vacancy tax a 1% > $10,000.00. Wow. |
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