Canada's 'housing bubble' deemed close to bursting

[someone123]

Originally Posted by FarmerHaight

There are so many ways to be deceptive with titles. Pay a Canadian to buy it for you, use a Canadian holding company as a shield, etc.

Well if you pay a Canadian to buy it for you and the Canadian goes on the title the Canadian owns the property. If anybody wants to give me cash in exchange for me buying property for myself I am willing to accept gifts.

In BC you are expected to report beneficial ownership.

Originally Posted by FarmerHaight

Can you explain paying no tax on capital gains if this foreigner doesn't live in Canada? I find a hard time the CRA would allow them to designate the property as their principal residence if they spend as little time here as you say.

Some people allegedly lie about it. I can't remember for the Meng et al. case but I think part of it was that it wasn't clear they were in Canada much even though they at times had PR. Maybe this is something that has been tightened up. Another part of the story is companies that put pumpkins out in front of the empty principal residences and so on.

[FarmerHaight]

Originally Posted by ssiguy

No business needs to own housing.

Plenty of business own homes for very logical reasons. You may not roll your personal residence into a corporation, but if you are a landlord there are a number of reasons to incorporate including tax deferral and limited liability. And those are just the benefits for a small-scale landlord.

I don't know how many restrictions you plan on putting these home purchases, when your whole plan is to get the government to donate the land and get out of the way.

Originally Posted by ssiguy

Low cost rentals only reinforce inequality due to renting being money out the window while buying for roughly the same amount per month helps create wealth for these buyers.

How does it create wealth if you're capped at 4% returns every year? With that low return and the risk of the housing market, you should either purchase a five-year GIC and half your interest rate, or invest in the S&P 500 and double it.

[FarmerHaight]

Originally Posted by someone123

Some people allegedly lie about it. I can't remember for the Meng et al. case but I think part of it was that it wasn't clear they were in Canada much even though they at times had PR. Maybe this is something that has been tightened up. Another part of the story is companies that put pumpkins out in front of the empty principal residences and so on.

Then that is a problem for the CRA to handle, because the intent of the ITA is to fully tax people on capital gains realized on homes they don't live in. And depending on where the owners lives, there may be double taxation if there isn't a tax treaty between that country and Canada.

[SpongeG]

Originally Posted by Al Ski

Right, I know that a (very) few people can make money on YouTube by spewing nonsense to vapid dumbasses but..

That doesn't really address the broader issue of housing affordability, does it?

of course not but it explains how a woman can pay cash for two units in Detroit or how a sorry girl can afford a semi-detached home in a Toronto neighbourhood. The other sorry girl lives somewhere more remote.

[SpongeG]

Originally Posted by lio45

One could say the exact same of Detroit vs more typically desirable American cities.



I wouldn't automatically call anyone who buys a $50k Detroit condo/Saint John condo/Hines Creek house "desperate". Very possible that they have lots more investments than you and travel/enjoy life more than you do

I've been to Hines Creek it's pretty much a craphole. It's about an hour to any decent grocery store, the town doesn't have any restaurants. I like living where I do its been home most of my life and I have no plans to leave.

[lio45]

Originally Posted by MolsonExport

were you making several hundred dollars per hour?

No. Real estate was cheaper back then.

[ssiguy]

As I clearly stated earlier, such moves would NOT take effect for a year since becoming law. This allows businesses and people to sell their homes and not have to do so in a panic mode. In today's market that is MORE than enough time to sell their homes at fair market price and diversify their portfolios.

Businesses do not need to own homes. They can certainly own buildings for housing rentals/commercial etc but there is no reason why they need to own individual units themselves.

The answers are there but it requires imagination, forethought, and most of all political will. I begrudgingly voted Liberal only because I didn't like the alternatives and I really like our local Liberal MP but in terms of housing policy, they have the worst of any of the parties. Despite all the spending announcements, Canadians looking for affordable housing couldn't have gotten a worse government.

[FarmerHaight]

Originally Posted by ssiguy

Businesses do not need to own homes. They can certainly own buildings for housing rentals/commercial etc but there is no reason why they need to own individual units themselves.

Some businesses own units so that they can house temporary foreign workers. Some businesses are single shareholder entities that allow them to defer taxes, enabling them to re-invest profits in capital expenditures. Some businesses own a dozen units in a building and rent them out.

I don't think it would be possible to distinguish between owning a duplex and renting out the units, and owing the individual units.

[whatnext]

Originally Posted by FarmerHaight

There are so many ways to be deceptive with titles. Pay a Canadian to buy it for you, use a Canadian holding company as a shield, etc. I will also repeat the issues with defining "foreigners". Is it only foreign-born? What about ex-pats? What about someone who is a Canadian citizen who is a deemed non-resident for income tax purposes?

Can you explain paying no tax on capital gains if this foreigner doesn't live in Canada? I find a hard time the CRA would allow them to designate the property as their principal residence if they spend as little time here as you say. I also didn't know people who rented basement suites pay property tax.

So lets make it simple: No Foreign Buyers. Period.

Those immigrating can rent until they qualify. Renting is good enough for millions of Canadian, so why not them?

If people feel that this hits cottagers etc unfairly, we can do as the Swiss do:

...Foreigners may only buy a residential property in a touristic area. So unless you are Swiss, or hold a Swiss Residence Permit, you cannot buy a property in Geneva, Basel, Zurich, Zug or any of the other cities in Switzerland. Foreigners are allowed to buy chalets and apartments in most Swiss ski resorts as these are in tourist areas.

Foreigners are able to buy in ski resorts in Cantons Bern, Graubünden, Obwalden, Uri, Vaud & Valais....

https://www.investorsinproperty.com/news...rty-in-switzerland-what-you-need-to-know

[rofina]

Originally Posted by rofina

All these ideas are not wrong, but can be achieved much more easily and much more practical way.

2 classes of land.

Freehold - this is what we have today. Subject to zoning, etc, but otherwise yours to build and take risks with. Up zone, rezone, do whatever

Freehold 2.0 - Land that contains housing for income verified locals only. These units are for local housing only. The units appreciation is linked to the cost of building the unit at time of delivery, and the appreciation on the unit is capped to inflation rate only.

This land would be released for free by Cities, Provinces, Feds, to the bidder than can propose the best value project. So for example, if Westbank wants to promise delivering 300 units and a community center for $400 million great. But Concord says it can deliver 350 units and a community center for $380 million. Deliver that.

This housing remains in the local alternate stock for its lifespan. Cannot be rezoned. Cannot be flipped. Cannot be used for profit otherwise.

Then open the gates for foreign investment, let it run wild. Tax the living 🞵🞵🞵🞵 out of it and fund the above scheme.

Who cares if foreign money want to spend $3000 a sq/ft on condos? We can build an infinite amount of condos. Sell them and reap profit.

I'm going to gratuitously quote my self, but all the discussion proceeding this post is not necessary should this Freehold 2.0 be implemented instead. It addresses all those concerns automatically.

[Wigs]

Originally Posted by lio45

No. Real estate was cheaper back then.

we demand a Toronto Star article on "Millennial Money" lio edition

[MolsonExport]

Back in the eighties, I tried buying a condo tower, but alas, my McDonald's manager salary didn't yield enough cash flow.

[FarmerHaight]

Originally Posted by whatnext

So lets make it simple: No Foreign Buyers. Period.

You still didn't define foreign.

[JHikka]

Originally Posted by FarmerHaight

You still didn't define foreign.

And as you've already pointed out there are easy ways to get around that, anyway.

[WarrenC12]

Originally Posted by MolsonExport

Back in the eighties, I tried buying a condo tower, but alas, my McDonald's manager salary didn't yield enough cash flow.

You should see today's tuition costs for Hamburger University!

[whatnext]

Originally Posted by FarmerHaight

You still didn't define foreign.

No Canadian citizenship. As much as I'd like to block Canadians of Convenience from buying that would be difficult, unless you required five years of Canadian tax returns in order to purchase.

[rofina]

Originally Posted by MolsonExport

Back in the eighties, I tried buying a condo tower, but alas, my McDonald's manager salary didn't yield enough cash flow.

I know an appliance repair man that bought a entire block of houses in Vancouver in the mid 80's.

Despite this being another one of your snide and facetious posts, this was possible in the early 00's, 90's and 80's, particularly for motivated folks with no kids.

If I knew then what I know now, I would be sitting on a tower or two as well.

0down/40 years in 2009 and you got phone digits in your bank account today.

[FarmerHaight]

Originally Posted by whatnext

No Canadian citizenship. As much as I'd like to block Canadians of Convenience from buying that would be difficult, unless you required five years of Canadian tax returns in order to purchase.

I don't see why a Canadian-born person who has spent their entire life in the United States or Europe or Asia is any more qualified to purchase a home than an immigrant family who have lived here for years and never plan to leave.

For every malicious foreign billionaire you ban from buying a home, you will punish thousands of other families who work and pay taxes in Canada, and who have already faced an uphill battle to get to this country. Wealth creation through property ownership is just as important for these people as born citizens, but your proposal would alienate foreign-born individuals.

I am perfectly happy to have a family from Malaysia purchase a home in Brooks, Alberta while they work 12-hour shifts processing steaks for you and me.

[WarrenC12]

whatnext is a west side Vancouver NIMBY with mild racist overtones, focusing mainly on China.

That should clear up a lot.

[whatnext]

Originally Posted by WarrenC12

whatnext is a west side Vancouver NIMBY with mild racist overtones, focusing mainly on China.

That should clear up a lot.

Why do you think non-Canadians should be able to own property in Canada, especially when the common refrain here is we are in a housing crisis and there's not enough supply? If we didn't have enough food supply, would you advocate shipping the little we had to foreign countries?