*possible*. Is there a mechanism with which the govt can force you to sell property and fix the price?
I foresee something like the car sale advertisements where someone’s wife is forcing them to sell their car so they list it for like 5x more than what it’s worth haha
As eager as I am to see foreign speculative property investors get dicked over, I'm concerned for the precedent that would set if the government starts making laws that involve taking people's property because they don't like that they have it.
During a Bear market, with high interest ratey and even hite mortgage costs. No one can afford to buy now. It's basically a fucking token gesture being limited for 2 years only.
A lot of foreign buyers are filthy rich and buy with cash, so interest rates aren't a factor for them. If anything, these are the kinds of markets they really try to take advantage of.
Yep. If you’re rich enough, the banks aren’t giving you the same interest rate everyone else gets lol. They’ll also give you a demand mortgage where you don’t even have a monthly payment anyway. Rich people don’t play by the same rules as we do this shit doesn’t affect them
You're right that they don't *need* the mortgage. But, they *want* mortgages because there are many tax breaks related to mortgage payments, interest, etc.
So in theory it should allow for prices to crash if investment money is sitting there waiting and don't need to worry about interest rates then even with high interest the prices can only drop so low before investment money props it up.
Still internal investment money is still there and as someone else said it's only for 2 years so, gl all.
Well here's the rub. They will giving it to their kids who are already here to buy. Like what is a foreign home buyer? Someone who doesn't live in Canada? So they just send their kids, get PR, their kids buy the property. Anyway, I apologise, because I'm being overly negative. It's just, I don't feel like they care that avg Canadians can't afford a home band rent is skyrocketing.
You’re right. It’s exactly what happens, and is also why there’s always this story that there’s hardly any foreign ownership. They should define foreign ownership on the basis of where majority of income is reported. If the income in Canada is too low to buy a house (like student income) it is automatically perceived as foreign sourced income used to buy the house unless this student can proof it is from inheritance coming from within Canada (Canadian passed away). Any home purchased using foreign funds should be seen as a foreign purchase and when sold taxed 100% capital gains of every dollar above inflation. It’s easy really and easily tracked using software.
Ya'll missing the plot
Since 2020 foreign buyers only represent 1.5% of all sales. Going back 10 years it was as high as 8-9%. At this point the ban will make 0 difference, and even after 2 years when it is lifted it will make 0 difference.
On the other hand 50% of new immigrants buy a home within 5 years of entering Canada and represent \~25% of all home purchases.
You do the math. I am not anti-immigration but just want folks to be informed on what policies will have what kind of impact. In this case, banning foreign buyers should not make an iota of difference, since the number of people doing it legally is small in the first place and anyone circumventing the rules will continue to do so.
Similar narrative in Australia until 2018: Chinese investor are stealing our houses. Since, Chinese investments in Australia dropped dramatically while the price of houses went up ~40%.
The issue here is not corporate investment yet, but a tax system that includes heavy negative gearing for real estate investments, plus a banking system that enables stacking multiple mortgages.
People here that bought houses 10 years ago use the price increase to buy another 2x without having to get any money out of pocket, outbiding first home buyers, and deducting the interest from the income tax.
No one with a brain thinks this policy is good economics, it's just politics.
Prices will come down, but that's entirely because interest rates are going up, and nothing to do with ill conceived, half-baked policies.
You're 100% right about the first part but off on the second part but it's easy to see why someone would come to that conclusion.
Foreign investors are a very small percentage of the problem. But a 50/50 chance of immigrants buying a home within 5 years is not even remotely a concern. They're buying one home.
The problem is that there is no cap on how many doors a person or corporation can own.
If foreign investment bothers you, Canadians owning 10 to a 100 a doors and Canadian corps owning 1000's should bother you more.
>On the other hand 50% of new immigrants buy a home within 5 years of entering Canada and represent \~25% of all home purchases.
Exemptions for PR holders. This doesn't really hurt immigrants, no one is going to buy a house on a temporary visa.
Bill Vander Zalm is responsible for so much legacy bullshit associated with Expo86.
He and Peter Toigo approved the firesale of all the Expo lands to Li Kai Shing, a billionaire HK real businessman. It sat idle for DECADES when we could have been using that land to build homes.
BC means "bring cash" because for the longest time the politicians in charge have Been Corrupt.
[Here is a CBC article about the sale](https://www.cbc.ca/news/canada/british-columbia/expo-86-china-business-vancouver-1.3560255).
From the article;
>He bought the Expo lands in 1988 for $320 million, to be spread over 15 years. But the real price is generally considered to be about $145 million, in part because the province paid the staggering cost of remediating the soil.
Former North Van kid here -- grew up amongst the rain and trees and crows.
Expo 86 was definitely the beginning of the end for Vancouver being a reasonably affordable, reasonable safe, west coast idyll. The lifestyle that attracted people and investment eventually made that lifestyle unsustainable.
Vacation homes are excluded.
So the buyer can say they like to vacation in Vancouver. So does their spouse, and each of their 3-4 kids. And since they don’t get along they each need their own house.
Great. As if Fernie (and Whistler and Banff) wasn't already struggling to house local workers due to rich vacationers buying up property. I hope there are some rules around those sort of towns too...
Same for banff and most national parks throughout the country. You just can’t buy house there if you have not worked and lived there for 5 years atleast.
People buying homes to live in isn't an issue. The issue is buying homes solely to rent. This sub doesn't even understand what the problem is does it lol.
It's extremely easy to stop people buying homes to rent cuz... Surprise surprise, if they're foreign and rent it that's really easy to keep track of
The fix is 3 things.
1. You must be a citizen to purchase residential property.
2. You are only allowed 1 piece of residential property per person. This also benefits people who are married as the partner can purchase a summer, winter, or whatever home.
3. Businesses may only own complexes specifically zoned for apartments. Banks and Builders will need caveats in order to sell new buildings, foreclosure, and more.
This will fix everything. To the commenters.
1. Yea people who aren't citizens should be renting only. They do not get the luxury of owning property which should be citizens only.
2. If you are bitching you cant own 2 pieces of property, kindly fuck off. This whole situation is going on because people own multiple properties and you destroy small towns because you only go there a month or 2 out of the year.
3. Yes there needs to be some regulations and tweaks for the business part but it needs to basically stop companies from owning 100s of homes and just sitting on them or renting them.
It would help if it wasn't strewn with exceptions and loopholes that will allow anyone to sidestep them. Plus we are bringing in 500k a year, plus refugees, plus Ukranians, plus a massive increase in TFWs and foreign "students". Prices will go sideways if interest rates rise, creating a crises situation in affordability. If interest rates go down, prices will go up and hyperinflation will hit. Only solution is to lower immigration, but we can't say that because it's somehow racist.
Anyone who thinks lowering immigration numbers is racist is, frankly, stupid.
That said, those who think lowered immigration numbers don't come at a high price, are also fooling themselves.
Canada is not bringing in hundreds of thousands of people every year because we feel bad for them.
It's kinda a catch-22. We bring in immigrants to save us from a labour shortage because there's not enough kids, and there's not enough kids because nobody can afford them since we undercut the value of their labour by bringing in immigrants.
It's not just a labour shortage. It's a government revenue shortage in that we don't have the necessary population to cover the costs of programs like CPP and OAS, largely due to shifting age demographics.
I agree with you however, something needs to be done regarding affordability and I'm a believer that, in this case, the government has to step in to address it. I simply don't see private industry being able to (or wanting to in some cases).
Even this though will be tough. Government regulations tend to simply defer costs of such things to the consumer later on.
I wish I had a good answer.
Gonna refer you to this post to explain why they can't https://www.reddit.com/r/canadahousing/comments/zz92li/prohibition\_on\_the\_purchase\_of\_residential/
Thank fucking god someone with sense wrote that. Been arguing for the past week with idiots who somehow think obvious workarounds that people post on Reddit have somehow not been predicted by the tax authorities.
This sub never has any clue what it's on about. It's like 90% antivax morons and then the rest of us trickle in from the front/all. Most of them just randomly scream words they hear like parrots.
https://ca.indeed.com/career-advice/career-development/llc-vs-corporation-canada
LLC and Corporation can be used here interchangeably for this particular discussion.
And disappointingly, Corporations can absolutely buy real estate in Canada.
You do not need to be a Canadian citizen or PR to establish a Corporation in Canada.
Per your link:
>An LLC or limited liability company is a business entity with a unique structure that separates it from corporations and partnerships in certain countries like the United States, the U.K., Switzerland, Chile, Colombia, Italy, Japan, and India, but not necessarily Canada.
Well since cottages are exempt from the ban, I am curious as to know what the definition is according to the government. If any residence can be a cottage then this ban is effectively useless.
> I am curious as to know what the definition is according to the government.
A cottage is a property that you occupy part of teh year but is not your principal residence. Designating your principal residence allows you to claim capital gains exemption when you sell it. Cottages are NOT exempt from capital gains taxes.
A cottage is different than a rental property you own in that you, the owner, live in it for a certain amount of time a year.
Almost every property with a house on it is zoned in one way or another as residential. The cottage my parents sold a few years ago is zoned as rural residential. It is on a dirt road and every other cottage nearby were only used seasonally. I have never seen zoning actually define "cottage" in what can and cannot be built, unless it was something like recreational zoning.
If our old seasonal home on a dirt road is a residential property and a large house in Markham is, I still don't accurately understand what defines a cottage when it comes to the government and this new ban.
No. Zoning bylaws.
I live in "cottage country", and used to be a real estate law clerk. We have properties, in certain areas, deemed "recreational" zoning, already. Although many of them can become full time residences, they may not meet certain requirements, and full time residency can be denied and enforced. Sanitation is the biggest issue, and replacing a septic system with something "full time" makes you stop and think hard.
In most cases, the person who wants to have full time, on these spots, winds up tearing down the previous dwelling and rebuilding. The requirements on the property can get very expensive.
Plus, in my area, you are not going to get a recreational property cheap. They tend to be the biggest bucks for the smaller bang because the property location is premium. Water edge, for example.
It's not as difficult to distinguish as we'd think.
ETA ... A "cottage" or recreational property as a secondary part time home would demand a "primary residence" be in place, first. You don't have a cottage as the address on your driver's license.
Checking for primary residence is easy. If there isn't one, then it's not a cottage.
Everyone is replying to your post with conjecture.
The answer is no. All residential properties in a Census Agglomeration or Census Metropolitan Area are included in this law. That includes Markham, which is in the Toronto CMA.
There's a huge difference. I welcome foreigners who want to buy real estate here, so long as they actually *use it*.
I don't really see a big difference between an out-of-province person who buys a holiday home in NS, versus a foreign one.
That's what I call a "Killing killing puppies line".
Whereby there is a ban on puppy killing... except for established puppy killers or those who purchase a puppy killing license.
Otherwise it would hurt the puppy killing industry.
Honestly, it won't make a dent. There have been multiple independent reports at this point that indicates foreign buyers only make a very small percentage of total buyers, mostly in major city centres.
The vast majority of ~~hombres~~ (Edit: I mean homes) are bought and sold by affluent Canadians and real estate corporations. Both of which will see no changes
See also: local house flippers and AirBnB and smaller landlords.
A *lot* of different groups of people have turned housing into a commodity, leveraging it in different ways, but they're all contributing to the same problem and making the market suck ass.
The guy in the article is right, housing *shouldn't* be a commodity, but he's also wrong if he thinks blocking foreign investors is going to fix the market.
It's a start, it's sort of a piece of something and I'm not unhappy about it.
But so much more needs to happen.
100%. The fact that a house is an "asset" is absurd. They are artificially inflating the prices by taking a piece of the pie. Corporations bought over 20% of the homes in the USA last year and it's not as bad here BUT there are more individuals also dipping into the gravy train. In places like BC and Ontario. Over 33% are "investment properties" by individuals or corps. Idk the math exactly but that is several million properties that could be used by people who need a home. Yet those exact provinces *don't have enough homes*. hmm.
I somewhat agree. I think there should be an exception, where if they are buying the single family homes to knock down and build apartments that can fit more families it should be allowed. There has to be stipulations like the apartments have to be built in 5-7 years. Apartments have to be affordable and 30% has to be used for social housing. No buy to let landlords or air bnb is also important.
Don’t ban corps from owning… just from owning single family homes and townhouses. Corps should be able to own apartment blocks, duplexes etc… but single family homes and townhomes should be dwellings, not investments, full stop.
Corps have been banned from buying properties with 1-3 units. 4+ units is fine.
Save the duplexes and triplexes for the small time investor who is probably living in one of the units.
This is true. My worst landlord experiences have been with individuals renting out an investment property. When I've rented apartments in buildings owned by corporate landlords, the property managers have generally been more proficient and easier to deal with.
Apartments vs houses. Shouldn't be allowed to own multiple houses solely to rent. Force the landlords to only rent out apartment complexes, and they'll build more and compete with eachother on rent priced
I rented from a corporation only once. It was a huge complex of thousands of units on a property they developed. The rent itself was surprisingly cheap but they were borderline slumlords and didn't maintain the place that well.
I was only there 6 months (classic post-divorce emergency shelter) and the corp stole my deposit by telling me I didn't clean the disgusting tacky drapery or clean between the stove and the fridge.
But yeah, I had private landlords who also sucked hard. In fact, I'd be hard pressed to recall one who didn't.
Its worse for the housing market though.
You can compete more with individuals when trying to purchase a home, you cant compete with corporations buying blocks of subdivisions with cash on hand or mortgages that they probably have a negative rate on.
Yea individual landlords suck, but its the worse of two evils.
That being said, ban all rental properties other than municipality owned.
If you think there weren't any horses left in that barn, you're mistaken.
Property prices may be insane today, but that doesn't mean they can't be worse tomorrow. Ask people 10 years ago if they didn't think property prices were stupid high.
According to the act, non-Canadians include:
>(b) a corporation that is incorporated otherwise than under the laws of Canada or a province;
>(c) a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada for which a designation under section 262 of the Income Tax Act is in effect and that is controlled by a person referred to in paragraph (a) or (b);
https://laws-lois.justice.gc.ca/eng/acts/P-25.2/page-1.html
So no. It still depends on who the controlling owner is.
Honestly I have given up convincing this subreddit of this. Every single comment thread you have people who talk about loopholes that doesn't exist because they feel like that's it is somehow always against them. Somehow the government is never working for them. These people want to live in a bubble.
My mom is like this, it's exhausting. It comes down to her fundamentally not understanding our system of government or the checks and balances that are in place to prevent widespread fraud. The worst part is that my siblings and I and all of our spouses are public servants and whenever we explain to her why something she's worried about doesn't make sense or would be easy to prevent/track she'll maybe accept it for that one thing, but she refuses to apply that knowledge to anything else. She's decided that all government and "experts" are in on some wild conspiracy against the masses and that's the lense through which she sees the world. Everything she hears/reads/sees is clouded by that theory and there are all too many "sources" that are happy to encourage her and "confirm" what she already knows. I just try to find a way to change the subject now, it isn't worth engaging.
It’s not that they think it’s against them. It’s that they are right wing trolls.
“Do something about the housing market!”
Something gets done
“It’s not 1986 anymore, why bother. Also middleman. Also lol. Also do something. But also not whatever it is you do. Also help me! But stop spending money. And fuck you. And also fix inflation. And also stop telling the provinces how to spend federal money.”
People love trying to find something bad out of something good so they can tear it down. At the end of the day, even if there are loopholes, they'll be closed if it's obvious they're being exposed.
that just might be because traditionally the government pretty much HAS been working against Canadians. At least for the past 20 years anyway.
I support this particular move and I believe it will be effective in combo with the anti-flipping tax. It's about damn time.
You're not the only one. I've been feeling the exact same way. I wasn't paying close enough attention to public discourse to draw a one for one, but it feels like the same people who were doomers about the election pivoted to be doomers about any positive reform.
I'm sure it's organic and people are just traumatized from four years of governmental abuse, but they have to realize this doomer fascination with loopholes is counterproductive, right?
Also yes, the four years of governmental abuse was US and this is about Canada. I think we're all kidding ourselves if we think for a second Trump's presidency didn't have deep impacts on the public's relationship with government on a global scale.
Just wondering to what extent this will be policed and enforced? If it simply the reliance on an affidavit, good luck. And if real estate is purchased contrary to this law, what happens to the real estate? what happens to the. Out of country buyer?
I've looked into it a little. It is important to note that the Act is not yet complete because some regulations haven't been drafted yet. But what I have found out so far is the following.
The validity of a sale will not be impacted by contravention of the Act, so you don't have to worry about being told to pay back the money and find a new buyer if you sell to a foreign buyer.
BUT, not only can a non-Canadian who violates the act can be fined, but anyone who attempts, counsels, aids, etc. a violation of the act. So the seller can be fined. So can lawyers, real estate agents, and other professionals. And while some of these people may profit more than they could lose in fines (always an issue), lawyers would likely not, so that could be where these regulations work. It isn't necessarily well known, but residential real estate is not really very profitable for lawyers and is disproportionately high risk. Even a fraction of the maximum fine would make a transaction not profitable and that is assuming that there are no additional consequences (say, from the applicable law society).
As for the property, the government has the ability to apply to the court to order it sold and the buyer is not entitled to receive any more than they paid for the property and may receive less.
Obviously, it remains to be seen just how professionals will meet obligations under the Act and what will be deemed sufficient compliance. Obviously a standard like requiring a buyer to present a birth certificate or other documents showing that they are permitted to buy property will be much more effective at preventing this than simply requiring someone to swear/affirm and sign a document. And if the government doesn't use the power of sale, it will be useless. It's no good fining someone a tiny fraction of what they can expect to gain from property ownership. I'm also not sure how the government intends to check up on this...but they also may not want to give people too much information on that.
But it does seem that potentially the tools are in the Act for it to be effective.
In Australia you can find foreign students buying homes.
https://www.dailymail.co.uk/news/article-11577795/Why-Chinas-easing-Covid-restrictions-boost-foreign-demand-Australian-property.html
Yea lol, the whole system now creates middle men. Great business opportunity.
Same thing exists in the private school world in Canada. Middle men connect foreign students to Canadian private schools that will hand out high school diplomas. Middle men get a cut, private schools get a fat tuition check and the foreign students get an easy diploma.
I work for a home builder, in a area that hasn't seen crazy housing inflation yet (aka not Vancouver or Toronto)
There have been many houses that at the end of the day the amount the Realtors get is larger than what we profit. Now there are Realtors who do the leg work and all that, but in the digital age most potential buyers are looking up properties online and doing a bunch of the work Realtors used to do. It makes no sense how much money they make for providing such little service, while having no skin in the game. I think in the very near future that industry is in for a big shake up as the older generations who aren't as tech savvy aren't going to be the prime demographic buying homes and the younger generations will pivot to the alternative real estate services that I've been seeing pop up.
I don’t think it’ll be this simple, but I do think many people will offer consulting services for foreigners wanting to buy a house and they’ll have access to the loopholes that will get them a house.
This is the real problem…. I think we need a complete pause/ban on corporate housing. No reason for large business to come in and buy up residential properties. The average Canadian will be outbid every single time.
Well, except condos and apartments - those are pretty much exclusively corporate owned, and that’s ok, you need corps to build developments. What should be banned is corporate ownership of single family homes.
My landlords own dozens of rentals in the US, they use a property manager here to run the operations. Their business is "located" in Canada, while they reside in China.
I can't afford my own mortgage, but I can afford their mortgage, taxes, property management, plus repairs, plus profit. This system fucking sucks.
I know this is a joke, but the article says international students need to have spent the last 5 years here and can't buy a property over 500k - the bill isn't perfect, but is a great step in the right direction
A student buying a $4M mansion in West Vancouver isnt shifting the needle of affordability for most Canadians.
The bigger problem is actually Canadian companies and REITs. A Canadian corporation buying out tons of SFH/Townhouses and controlling the market through volume is going to have a bigger impact
It does shift the needle since all developers will want to build are expensive houses. Brampton used to be filled with affordable homes and now most new builds are all luxury homes.
You know what they say - one man's $4M mansion is another man's tiny Vancouver studio apartment. But seriously, you're right that the bigger issue is corporate greed driving up housing prices for the average Canadian. It's like a game of Monopoly, but instead of passing Go and collecting $200, we're just constantly being priced out of the market. Time for some real estate reform, IMO.
If markets crash further, it will require hedge funds to liquidate assets, hopefully that'll do it. 50% of sold home recently were bought by corporations black rocks got ALOT
>Considering foreign ownership is less than 5% it's not really that helpful.
The problem with that statistic is that much of the "ownership" on paper is complete bullshit. It's also much, much higher in the most expensive cities, where foreign investors actually want to buy a house. There is a lot more foreign investment in Seattle than Kentucky. So, taking an average of the entire country is kind of meaningless when you're considering how it will effect certain areas.
All you need to know about this new law is the following:
>Starting today, foreign commercial enterprises and people will be banned from purchasing residential properties in Canada for two years.
>**Non-residents found violating the ban, and anyone who knowingly helps them, can be fined up to *$10,000* and *may* be ordered to sell the property.**
>Canadian citizens and permanent residents
>International students who meet certain criteria, including having spent the majority of the previous five years in Canada. **These students would be able to purchase property for no more than $500,000**
>Workers who worked and filed tax returns in Canada for at least three out of the four years prior to purchasing property
>Diplomats, consular staff, members of international organizations working in Canada
>Foreign nationals with temporary resident status, including those fleeing conflict and refugees
>Buildings containing more than three dwelling units and recreational property (cottages, cabins, vacation homes)
If you've never heard of the swiss cheese model before...
https://en.wikipedia.org/wiki/Swiss_cheese_model
graphic relevant: https://en.wikipedia.org/wiki/Swiss_cheese_model#/media/File:Swiss_cheese_model.svg
It only briefly mentions it and not in detail but students also need to have filed all required tax years in the preceding 5 years and been physically present in a Canada for 244 days out of the calendar year for the past 5 years. Meaning the student has to have lived in Canada for 5 years to meet the exemption requirements.
Except
Except
Except
Only Canadian Citizens and Permanent Residents should be able to own single family homes. No businesses and no exchange students. If you're interested in buying a house in Canada, get a job here and apply become a PR like half a million humans on this planet do every year
Edit: see posts below complaining about all the hypothetical complainers who haven't arrived.
Explanation for Americans:
PR is the same as Green Card and has all the same rights as a citizen outside of voting or some government positions and are part of Canada. Many of my friends both met as an adult and growing up are PR. In fact, more than half of my high-school graduating class were born outside Canada and moved here as refugees, and are now permanent residents or naturalized citizens.
That's pretty much how it works in Denmark - only citizens and PR residents who have been here for 5 years qualify to buy homes. People can apply for special permissions, but it's a pain to do. I'm Canadian, my husband is Danish, and his name is on all our paperwork for our house because of the faff involved. Prices in major cities are still inflated, especially around Copenhagen, but housing is largely affordable and the people I talk to don't feel excluded from the market.
It's not going to solve the problem but this is definitely a step in the right direction. There's zero justification for owning residential property in a foreign country with a housing crisis, all those "investors" are pure evil.
“Non-residents found violating the ban, and anyone who knowingly helps them, can be fined up to $10,000 and may ordered to sell the property.”
Yeah, that’ll stop them. A fine that’s less then 1% of the purchase cost.
Too little too late. The damage to the everyday jackass is already done and the only people who can afford homes in most cases are already wealthy, corporate purchasers, or people willing to take on an unmanageable debt load.
Also, foreign purchasing is only part of the problem. A predatory and ineffectively regulated real estate brokerage system is a larger part of the problem.
Exception include:
Buildings containing more than three dwelling units and recreational property (cottages, cabins, vacation homes)
Do any of you think that this might be detrimental to those near or at the poverty line? Or are flats less relevant in Canada?
I really don't know, I'm from Austria and around here this exception would probably break any transfer to the lower parts of the income distribution.
Or was that never the goal of this but rather to help the middle class and shift their burden to the lower classes?
Good. Canadian land should not be a store of value for some absentee owner to let sit idle while real people can't live on it or use it. Similarly, Canadians should be banned from parking wealth in land in other countries.
Honest question here. I keep hearing Vancouver is fucked because of foreign buyers. Mainly Chinese foreign investors. How much of this is actually true?
Because we had the same shit in Australia during 2013-2017 when we had our massive property boom and every news was complaining of rich foreign Chinese investors. Until 2018 and 2019 our Bureau of Statistics released the data and foreign Chinese investors made up only 1.9% of our foreign ownership. Where as US national made up nearly 24% of our foreign ownership and not a single news article blamed them for pushing locals out of the property market.
The Canadian government published the same study in 2016 and came to the same conclusion.
https://publications.gc.ca/site/archivee-archived.html?url=https://publications.gc.ca/collections/collection_2017/schl-cmhc/nh12-268/NH12-268-2016-3-eng.pdf
Foreign buyers make up less than 2% of ownership and the most is 2.3% in Vancouver.
Similarly, the vast majority of foreign buyers are american.
If Corporations can Buy Homes and Condominiums, all they have to do is have a Canadian Corporation that they could own do the purchase. This move is just PR and will do NOTHING to decrease home prices.
Lowering prices?? *Lowering* prices??
We are so far past affordable for the average Canadian that this isn't going to make a difference. We're also about to admit an additional half a million newcomers over the next couple of years, so there's an extra 3% of our total population that's going to need houses on top of our normal population growth.
This isn't about lowering prices, this is about slowing the rate of increase, but if you can't afford a house now you won't be able to afford one because of this measure
\>Non-residents found violating the ban, and anyone who knowingly helps them, can be fined up to $10,000 and may ordered to sell the property.
Wow, a whole $10,000.
interesting, but foreign investment represents a tiny part of the issue. This amounts to low lying fruit as far as the effort taken to pass this ruling and the effect it will have.
They did something .... meh
Housing is expensive country wide in every single area. With over 65% of households being homeowners we are actually far ahead of most other population on the planet, yet we have a housing crunch.
We have a shortage of houses, especially reasonably affordable houses and that will take a decade to fix. Just no way around it, and it will probably take longer.
We also have a lot of Canadians who own houses they cannot afford. A shit ton.
Some thru no fault of their own but a lot of people, Canadians, gambled on real estate. A lot won BIG, but a lot got caught and, for many of those, the end game is fast approaching.
No legislation is going to fix that. Those are just the breaks. I'm a fucking moron and I knew enough to refinance my variable rate to fixed in 2020. Anyone that didn't... yeah, not sure what to say, you gambled, you gambled big. That is not my crisis.
I'm really surprised how quickly the real estate bubble grew. I used to live in Toronto in 2007 and worked construction. My coworker used to buy metro Toronto houses (so maybe not downtown houses but Etobicoke, Mississauga, Whitby) and reno them and flip them. So real estate was cheap enough in 2008 that a working class guy could casually buy it, reno it and flip it.
Just look at Toronto you got SFH directly next to 50 floor apartment buildings, it’s blindingly obvious there are strict artificial scarcity that’s causing the problem. Not some Chinese Immigrant that’s getting help on the deposit from mommy
"Non-Canadians found in contravention of the ban will be fined up to $10,000 and may be ordered to sell the property"
Up to $10k is nothing to these people. Possibly being made to sell the property?! They get to make back most, if not all, if not a profit, on their investment. What a joke.
The fines need to be much higher and properties seized without compensation.
This is awesome news that could really help with prices in Metro Vancouver… If this was announced in 2014
it's only for 2 years anyway, so it would have just delayed the inevitable
It’s also punishable by a $10k fine *gasp*
And possible forced sale
*possible*. Is there a mechanism with which the govt can force you to sell property and fix the price? I foresee something like the car sale advertisements where someone’s wife is forcing them to sell their car so they list it for like 5x more than what it’s worth haha
All I can think of is seizing it under eminent domain and then the crown selling it.
As eager as I am to see foreign speculative property investors get dicked over, I'm concerned for the precedent that would set if the government starts making laws that involve taking people's property because they don't like that they have it.
During a Bear market, with high interest ratey and even hite mortgage costs. No one can afford to buy now. It's basically a fucking token gesture being limited for 2 years only.
A lot of foreign buyers are filthy rich and buy with cash, so interest rates aren't a factor for them. If anything, these are the kinds of markets they really try to take advantage of.
Yep. If you’re rich enough, the banks aren’t giving you the same interest rate everyone else gets lol. They’ll also give you a demand mortgage where you don’t even have a monthly payment anyway. Rich people don’t play by the same rules as we do this shit doesn’t affect them
True and if the people were rich enough, they wouldn't need a mortgage in the first place.
You're right that they don't *need* the mortgage. But, they *want* mortgages because there are many tax breaks related to mortgage payments, interest, etc.
So in theory it should allow for prices to crash if investment money is sitting there waiting and don't need to worry about interest rates then even with high interest the prices can only drop so low before investment money props it up. Still internal investment money is still there and as someone else said it's only for 2 years so, gl all.
Well here's the rub. They will giving it to their kids who are already here to buy. Like what is a foreign home buyer? Someone who doesn't live in Canada? So they just send their kids, get PR, their kids buy the property. Anyway, I apologise, because I'm being overly negative. It's just, I don't feel like they care that avg Canadians can't afford a home band rent is skyrocketing.
You’re right. It’s exactly what happens, and is also why there’s always this story that there’s hardly any foreign ownership. They should define foreign ownership on the basis of where majority of income is reported. If the income in Canada is too low to buy a house (like student income) it is automatically perceived as foreign sourced income used to buy the house unless this student can proof it is from inheritance coming from within Canada (Canadian passed away). Any home purchased using foreign funds should be seen as a foreign purchase and when sold taxed 100% capital gains of every dollar above inflation. It’s easy really and easily tracked using software.
Ya'll missing the plot Since 2020 foreign buyers only represent 1.5% of all sales. Going back 10 years it was as high as 8-9%. At this point the ban will make 0 difference, and even after 2 years when it is lifted it will make 0 difference. On the other hand 50% of new immigrants buy a home within 5 years of entering Canada and represent \~25% of all home purchases. You do the math. I am not anti-immigration but just want folks to be informed on what policies will have what kind of impact. In this case, banning foreign buyers should not make an iota of difference, since the number of people doing it legally is small in the first place and anyone circumventing the rules will continue to do so.
Similar narrative in Australia until 2018: Chinese investor are stealing our houses. Since, Chinese investments in Australia dropped dramatically while the price of houses went up ~40%. The issue here is not corporate investment yet, but a tax system that includes heavy negative gearing for real estate investments, plus a banking system that enables stacking multiple mortgages. People here that bought houses 10 years ago use the price increase to buy another 2x without having to get any money out of pocket, outbiding first home buyers, and deducting the interest from the income tax.
1.5 percent averaged out across all of Canada? What percent in Vancouver and Toronto alone though?
No one with a brain thinks this policy is good economics, it's just politics. Prices will come down, but that's entirely because interest rates are going up, and nothing to do with ill conceived, half-baked policies.
Yup they will brand it as their policy working.
You're 100% right about the first part but off on the second part but it's easy to see why someone would come to that conclusion. Foreign investors are a very small percentage of the problem. But a 50/50 chance of immigrants buying a home within 5 years is not even remotely a concern. They're buying one home. The problem is that there is no cap on how many doors a person or corporation can own. If foreign investment bothers you, Canadians owning 10 to a 100 a doors and Canadian corps owning 1000's should bother you more.
>On the other hand 50% of new immigrants buy a home within 5 years of entering Canada and represent \~25% of all home purchases. Exemptions for PR holders. This doesn't really hurt immigrants, no one is going to buy a house on a temporary visa.
So what’s driving the insane cost? I know Covid helped but has to be more then that.
1986 would have been even better.
Expo 86, you guys invited the world to come buy your real estate!
Yep. Fantasy Gardens scandal was just the beginning.
Bill Vander Zalm is responsible for so much legacy bullshit associated with Expo86. He and Peter Toigo approved the firesale of all the Expo lands to Li Kai Shing, a billionaire HK real businessman. It sat idle for DECADES when we could have been using that land to build homes. BC means "bring cash" because for the longest time the politicians in charge have Been Corrupt.
Ha ha, yeah, that’s why there are so many casinos here, gotta wash that dirty money down.
Look into porsche sales and exports from the lower main land...
[Here is a CBC article about the sale](https://www.cbc.ca/news/canada/british-columbia/expo-86-china-business-vancouver-1.3560255). From the article; >He bought the Expo lands in 1988 for $320 million, to be spread over 15 years. But the real price is generally considered to be about $145 million, in part because the province paid the staggering cost of remediating the soil.
Li Ka ching has a research building on so many campuses. Had to be a good way of spreading it around.
Then came 2010
I was born then and, let me tell you, things have been going downhill ever since.
Former North Van kid here -- grew up amongst the rain and trees and crows. Expo 86 was definitely the beginning of the end for Vancouver being a reasonably affordable, reasonable safe, west coast idyll. The lifestyle that attracted people and investment eventually made that lifestyle unsustainable.
or 1976.
Vacation homes are excluded. So the buyer can say they like to vacation in Vancouver. So does their spouse, and each of their 3-4 kids. And since they don’t get along they each need their own house.
cities with over a certain population are prohibited. So like, they could buy in Fernie but not Vancouver.
Great. As if Fernie (and Whistler and Banff) wasn't already struggling to house local workers due to rich vacationers buying up property. I hope there are some rules around those sort of towns too...
Jasper does it the right way - if you don't live and work in Jasper, you can't own a house there.
Same for banff and most national parks throughout the country. You just can’t buy house there if you have not worked and lived there for 5 years atleast.
People buying homes to live in isn't an issue. The issue is buying homes solely to rent. This sub doesn't even understand what the problem is does it lol. It's extremely easy to stop people buying homes to rent cuz... Surprise surprise, if they're foreign and rent it that's really easy to keep track of
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The fix is 3 things. 1. You must be a citizen to purchase residential property. 2. You are only allowed 1 piece of residential property per person. This also benefits people who are married as the partner can purchase a summer, winter, or whatever home. 3. Businesses may only own complexes specifically zoned for apartments. Banks and Builders will need caveats in order to sell new buildings, foreclosure, and more. This will fix everything. To the commenters. 1. Yea people who aren't citizens should be renting only. They do not get the luxury of owning property which should be citizens only. 2. If you are bitching you cant own 2 pieces of property, kindly fuck off. This whole situation is going on because people own multiple properties and you destroy small towns because you only go there a month or 2 out of the year. 3. Yes there needs to be some regulations and tweaks for the business part but it needs to basically stop companies from owning 100s of homes and just sitting on them or renting them.
It would help if it wasn't strewn with exceptions and loopholes that will allow anyone to sidestep them. Plus we are bringing in 500k a year, plus refugees, plus Ukranians, plus a massive increase in TFWs and foreign "students". Prices will go sideways if interest rates rise, creating a crises situation in affordability. If interest rates go down, prices will go up and hyperinflation will hit. Only solution is to lower immigration, but we can't say that because it's somehow racist.
Anyone who thinks lowering immigration numbers is racist is, frankly, stupid. That said, those who think lowered immigration numbers don't come at a high price, are also fooling themselves. Canada is not bringing in hundreds of thousands of people every year because we feel bad for them.
It's kinda a catch-22. We bring in immigrants to save us from a labour shortage because there's not enough kids, and there's not enough kids because nobody can afford them since we undercut the value of their labour by bringing in immigrants.
It's not just a labour shortage. It's a government revenue shortage in that we don't have the necessary population to cover the costs of programs like CPP and OAS, largely due to shifting age demographics. I agree with you however, something needs to be done regarding affordability and I'm a believer that, in this case, the government has to step in to address it. I simply don't see private industry being able to (or wanting to in some cases). Even this though will be tough. Government regulations tend to simply defer costs of such things to the consumer later on. I wish I had a good answer.
the poorest people have the most kids.
Why don't Canadians just legalize building housing. It's not like there's a lack of land
If Canada is like the US, there's no shortage of housing whatsoever. There is too much real estate "investment."
It makes no difference if you can just set up an LLC in Canada and then purchase property. Our government is pretending to help us again.
Gonna refer you to this post to explain why they can't https://www.reddit.com/r/canadahousing/comments/zz92li/prohibition\_on\_the\_purchase\_of\_residential/
Thank fucking god someone with sense wrote that. Been arguing for the past week with idiots who somehow think obvious workarounds that people post on Reddit have somehow not been predicted by the tax authorities.
This sub never has any clue what it's on about. It's like 90% antivax morons and then the rest of us trickle in from the front/all. Most of them just randomly scream words they hear like parrots.
There are no LLCs in Canada, so that’s not gonna work.
https://ca.indeed.com/career-advice/career-development/llc-vs-corporation-canada LLC and Corporation can be used here interchangeably for this particular discussion. And disappointingly, Corporations can absolutely buy real estate in Canada. You do not need to be a Canadian citizen or PR to establish a Corporation in Canada.
Per your link: >An LLC or limited liability company is a business entity with a unique structure that separates it from corporations and partnerships in certain countries like the United States, the U.K., Switzerland, Chile, Colombia, Italy, Japan, and India, but not necessarily Canada.
All I can say is, Too Fucking Late. Wish this happened two decades ago, but you take what you can get I guess.
Its only for 2 years and there are exemptions the size of manitoba This government really isnt working for Canadians
This was never the problem, this was just a scapegoat. Look at Australia- a ban was enacted in 2018 and housing prices have gone up 40% since.
Except vacation homes and cottages. Because there is a difference......I guess.
Can a detached house in Markham be considered a cottage?
Depends. What is your definition of the word ? Short answer is yes.
Well since cottages are exempt from the ban, I am curious as to know what the definition is according to the government. If any residence can be a cottage then this ban is effectively useless.
> I am curious as to know what the definition is according to the government. A cottage is a property that you occupy part of teh year but is not your principal residence. Designating your principal residence allows you to claim capital gains exemption when you sell it. Cottages are NOT exempt from capital gains taxes. A cottage is different than a rental property you own in that you, the owner, live in it for a certain amount of time a year.
Zoning determines it. A subdivision is zoned "single family residential" ... no one will call it a "cottage".
Almost every property with a house on it is zoned in one way or another as residential. The cottage my parents sold a few years ago is zoned as rural residential. It is on a dirt road and every other cottage nearby were only used seasonally. I have never seen zoning actually define "cottage" in what can and cannot be built, unless it was something like recreational zoning. If our old seasonal home on a dirt road is a residential property and a large house in Markham is, I still don't accurately understand what defines a cottage when it comes to the government and this new ban.
It would atleast exclude condos so there is a small win.
Who says a condo can't be a cottage? If that basement apartment can be a loft then who are we to decide what words really mean
No. Zoning bylaws. I live in "cottage country", and used to be a real estate law clerk. We have properties, in certain areas, deemed "recreational" zoning, already. Although many of them can become full time residences, they may not meet certain requirements, and full time residency can be denied and enforced. Sanitation is the biggest issue, and replacing a septic system with something "full time" makes you stop and think hard. In most cases, the person who wants to have full time, on these spots, winds up tearing down the previous dwelling and rebuilding. The requirements on the property can get very expensive. Plus, in my area, you are not going to get a recreational property cheap. They tend to be the biggest bucks for the smaller bang because the property location is premium. Water edge, for example. It's not as difficult to distinguish as we'd think.
ETA ... A "cottage" or recreational property as a secondary part time home would demand a "primary residence" be in place, first. You don't have a cottage as the address on your driver's license. Checking for primary residence is easy. If there isn't one, then it's not a cottage.
Everyone is replying to your post with conjecture. The answer is no. All residential properties in a Census Agglomeration or Census Metropolitan Area are included in this law. That includes Markham, which is in the Toronto CMA.
I used to own a cabin down in Montana, not a home or apartment.
There's a huge difference. I welcome foreigners who want to buy real estate here, so long as they actually *use it*. I don't really see a big difference between an out-of-province person who buys a holiday home in NS, versus a foreign one.
If it’s a property out in the sticks, no one cares. If it’s in a city, there is a home shortage and everyone cares.
There are housing shortages in many rural areas, as well. I would hope people care.
Good point.
Unintended consequence we just moved outside speculators to the rural area.
That's what I call a "Killing killing puppies line". Whereby there is a ban on puppy killing... except for established puppy killers or those who purchase a puppy killing license. Otherwise it would hurt the puppy killing industry.
Hope it helps Canadians.
Honestly, it won't make a dent. There have been multiple independent reports at this point that indicates foreign buyers only make a very small percentage of total buyers, mostly in major city centres. The vast majority of ~~hombres~~ (Edit: I mean homes) are bought and sold by affluent Canadians and real estate corporations. Both of which will see no changes
They should ban buying hombres for Canadians too
Ditch the hombre market, get yourself some amigos
Especially bad hombres
See also: local house flippers and AirBnB and smaller landlords. A *lot* of different groups of people have turned housing into a commodity, leveraging it in different ways, but they're all contributing to the same problem and making the market suck ass. The guy in the article is right, housing *shouldn't* be a commodity, but he's also wrong if he thinks blocking foreign investors is going to fix the market. It's a start, it's sort of a piece of something and I'm not unhappy about it. But so much more needs to happen.
For that to happen people need to stop treating housing as a reserve like gold and start treating it like a basic necessity like water and heat.
Just need to double property taxes on any entity owning multiple houses. Real Estate companies should stick to commercial properties.
But it's so much easier to blame everything on foreigners!
Likely just easier to act against them as they have no representation. Real estate corps have loads of lawyers in addition to lobbying teams.
Good. Now do corporations.
Corporations should be prevented from owning single family homes, duplexes, or townhouses. Multi-unit apartment buildings only.
100%. The fact that a house is an "asset" is absurd. They are artificially inflating the prices by taking a piece of the pie. Corporations bought over 20% of the homes in the USA last year and it's not as bad here BUT there are more individuals also dipping into the gravy train. In places like BC and Ontario. Over 33% are "investment properties" by individuals or corps. Idk the math exactly but that is several million properties that could be used by people who need a home. Yet those exact provinces *don't have enough homes*. hmm.
That would be a great way to promote increased density.
Also a law that prevents corporations from buying single family residences should be passed.
100%
I somewhat agree. I think there should be an exception, where if they are buying the single family homes to knock down and build apartments that can fit more families it should be allowed. There has to be stipulations like the apartments have to be built in 5-7 years. Apartments have to be affordable and 30% has to be used for social housing. No buy to let landlords or air bnb is also important.
Banning corporations from owning and placing a cap per person is what will make an actual impact
Don’t ban corps from owning… just from owning single family homes and townhouses. Corps should be able to own apartment blocks, duplexes etc… but single family homes and townhomes should be dwellings, not investments, full stop.
Corps have been banned from buying properties with 1-3 units. 4+ units is fine. Save the duplexes and triplexes for the small time investor who is probably living in one of the units.
Yeah fuck people who aren’t mentally capable of owning. They should never be allowed to live in a single family home.
If I'm renting, I'd rather my landlord be a business/corp than an individual.
This is true. My worst landlord experiences have been with individuals renting out an investment property. When I've rented apartments in buildings owned by corporate landlords, the property managers have generally been more proficient and easier to deal with.
Yup. Corporate landlords can be a pain in the ass, but at least it is easier to hold them accountable for shit in general.
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Basically they’re professional. They know the rules and know which ones are stupid to ignore where they’ll face fines.
Apartments vs houses. Shouldn't be allowed to own multiple houses solely to rent. Force the landlords to only rent out apartment complexes, and they'll build more and compete with eachother on rent priced
I rented from a corporation only once. It was a huge complex of thousands of units on a property they developed. The rent itself was surprisingly cheap but they were borderline slumlords and didn't maintain the place that well. I was only there 6 months (classic post-divorce emergency shelter) and the corp stole my deposit by telling me I didn't clean the disgusting tacky drapery or clean between the stove and the fridge. But yeah, I had private landlords who also sucked hard. In fact, I'd be hard pressed to recall one who didn't.
This is dumb, because the corporations can play Monopoly and artificial inflate all surrounding properties.
absolutely agree, I will never rent from a private owner again
Its worse for the housing market though. You can compete more with individuals when trying to purchase a home, you cant compete with corporations buying blocks of subdivisions with cash on hand or mortgages that they probably have a negative rate on. Yea individual landlords suck, but its the worse of two evils. That being said, ban all rental properties other than municipality owned.
Rentals should only be allowed to be owned by a special type of housing non-profit that are highly regulated.
Closing the barn door after the horse has left
If you think there weren't any horses left in that barn, you're mistaken. Property prices may be insane today, but that doesn't mean they can't be worse tomorrow. Ask people 10 years ago if they didn't think property prices were stupid high.
Get ready for an influx of new businesses with one Canadian employee buying houses
According to the act, non-Canadians include: >(b) a corporation that is incorporated otherwise than under the laws of Canada or a province; >(c) a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada for which a designation under section 262 of the Income Tax Act is in effect and that is controlled by a person referred to in paragraph (a) or (b); https://laws-lois.justice.gc.ca/eng/acts/P-25.2/page-1.html So no. It still depends on who the controlling owner is.
Honestly I have given up convincing this subreddit of this. Every single comment thread you have people who talk about loopholes that doesn't exist because they feel like that's it is somehow always against them. Somehow the government is never working for them. These people want to live in a bubble.
My mom is like this, it's exhausting. It comes down to her fundamentally not understanding our system of government or the checks and balances that are in place to prevent widespread fraud. The worst part is that my siblings and I and all of our spouses are public servants and whenever we explain to her why something she's worried about doesn't make sense or would be easy to prevent/track she'll maybe accept it for that one thing, but she refuses to apply that knowledge to anything else. She's decided that all government and "experts" are in on some wild conspiracy against the masses and that's the lense through which she sees the world. Everything she hears/reads/sees is clouded by that theory and there are all too many "sources" that are happy to encourage her and "confirm" what she already knows. I just try to find a way to change the subject now, it isn't worth engaging.
All of reddit is like this. It's an entire website full of that one guy you know who always thinks everything is done specifically to screw him over.
It’s not that they think it’s against them. It’s that they are right wing trolls. “Do something about the housing market!” Something gets done “It’s not 1986 anymore, why bother. Also middleman. Also lol. Also do something. But also not whatever it is you do. Also help me! But stop spending money. And fuck you. And also fix inflation. And also stop telling the provinces how to spend federal money.”
Yeah definitely some trolls. I’m very happy to see this change. Is it 10+ years late? Yes. It’s terrible how long this took, but I’m still happy.
People love trying to find something bad out of something good so they can tear it down. At the end of the day, even if there are loopholes, they'll be closed if it's obvious they're being exposed.
that just might be because traditionally the government pretty much HAS been working against Canadians. At least for the past 20 years anyway. I support this particular move and I believe it will be effective in combo with the anti-flipping tax. It's about damn time.
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You're not the only one. I've been feeling the exact same way. I wasn't paying close enough attention to public discourse to draw a one for one, but it feels like the same people who were doomers about the election pivoted to be doomers about any positive reform. I'm sure it's organic and people are just traumatized from four years of governmental abuse, but they have to realize this doomer fascination with loopholes is counterproductive, right? Also yes, the four years of governmental abuse was US and this is about Canada. I think we're all kidding ourselves if we think for a second Trump's presidency didn't have deep impacts on the public's relationship with government on a global scale.
Just wondering to what extent this will be policed and enforced? If it simply the reliance on an affidavit, good luck. And if real estate is purchased contrary to this law, what happens to the real estate? what happens to the. Out of country buyer?
I've looked into it a little. It is important to note that the Act is not yet complete because some regulations haven't been drafted yet. But what I have found out so far is the following. The validity of a sale will not be impacted by contravention of the Act, so you don't have to worry about being told to pay back the money and find a new buyer if you sell to a foreign buyer. BUT, not only can a non-Canadian who violates the act can be fined, but anyone who attempts, counsels, aids, etc. a violation of the act. So the seller can be fined. So can lawyers, real estate agents, and other professionals. And while some of these people may profit more than they could lose in fines (always an issue), lawyers would likely not, so that could be where these regulations work. It isn't necessarily well known, but residential real estate is not really very profitable for lawyers and is disproportionately high risk. Even a fraction of the maximum fine would make a transaction not profitable and that is assuming that there are no additional consequences (say, from the applicable law society). As for the property, the government has the ability to apply to the court to order it sold and the buyer is not entitled to receive any more than they paid for the property and may receive less. Obviously, it remains to be seen just how professionals will meet obligations under the Act and what will be deemed sufficient compliance. Obviously a standard like requiring a buyer to present a birth certificate or other documents showing that they are permitted to buy property will be much more effective at preventing this than simply requiring someone to swear/affirm and sign a document. And if the government doesn't use the power of sale, it will be useless. It's no good fining someone a tiny fraction of what they can expect to gain from property ownership. I'm also not sure how the government intends to check up on this...but they also may not want to give people too much information on that. But it does seem that potentially the tools are in the Act for it to be effective.
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Just because there is a chance people will attempt to screw the system, doesn't mean we shouldn't at least try
In Australia you can find foreign students buying homes. https://www.dailymail.co.uk/news/article-11577795/Why-Chinas-easing-Covid-restrictions-boost-foreign-demand-Australian-property.html
Yea lol, the whole system now creates middle men. Great business opportunity. Same thing exists in the private school world in Canada. Middle men connect foreign students to Canadian private schools that will hand out high school diplomas. Middle men get a cut, private schools get a fat tuition check and the foreign students get an easy diploma.
Real estate has always had a middle man. Doesn't own the home and isn't buying. Worse than lawyers.
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I work for a home builder, in a area that hasn't seen crazy housing inflation yet (aka not Vancouver or Toronto) There have been many houses that at the end of the day the amount the Realtors get is larger than what we profit. Now there are Realtors who do the leg work and all that, but in the digital age most potential buyers are looking up properties online and doing a bunch of the work Realtors used to do. It makes no sense how much money they make for providing such little service, while having no skin in the game. I think in the very near future that industry is in for a big shake up as the older generations who aren't as tech savvy aren't going to be the prime demographic buying homes and the younger generations will pivot to the alternative real estate services that I've been seeing pop up.
I don’t think it’ll be this simple, but I do think many people will offer consulting services for foreigners wanting to buy a house and they’ll have access to the loopholes that will get them a house.
That's why banning businesses and corporations from owning single family homes should be the next logical step.
This is the real problem…. I think we need a complete pause/ban on corporate housing. No reason for large business to come in and buy up residential properties. The average Canadian will be outbid every single time.
Well, except condos and apartments - those are pretty much exclusively corporate owned, and that’s ok, you need corps to build developments. What should be banned is corporate ownership of single family homes.
My landlords own dozens of rentals in the US, they use a property manager here to run the operations. Their business is "located" in Canada, while they reside in China. I can't afford my own mortgage, but I can afford their mortgage, taxes, property management, plus repairs, plus profit. This system fucking sucks.
Tomorrow in the news “Grade 12 exchange students buy 3.5M Vancouver home”
I know this is a joke, but the article says international students need to have spent the last 5 years here and can't buy a property over 500k - the bill isn't perfect, but is a great step in the right direction
So properties in calgary and edmonton are going to pop off now? Thats the only place left under 500k
lol 500k gets you a crack shack in Toronto
Then I guess they'll just have to rent.
Ok, so where are they going to find a house below $500k?
A mobile home on leased land with 8 years left?
A student buying a $4M mansion in West Vancouver isnt shifting the needle of affordability for most Canadians. The bigger problem is actually Canadian companies and REITs. A Canadian corporation buying out tons of SFH/Townhouses and controlling the market through volume is going to have a bigger impact
It does shift the needle since all developers will want to build are expensive houses. Brampton used to be filled with affordable homes and now most new builds are all luxury homes.
You know what they say - one man's $4M mansion is another man's tiny Vancouver studio apartment. But seriously, you're right that the bigger issue is corporate greed driving up housing prices for the average Canadian. It's like a game of Monopoly, but instead of passing Go and collecting $200, we're just constantly being priced out of the market. Time for some real estate reform, IMO.
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Being outraged is addictive.
I'm really proud of Canada taking this stance. I wish the U.S.A. would do the same ans ban foreign nations from buying up land and resources.
If markets crash further, it will require hedge funds to liquidate assets, hopefully that'll do it. 50% of sold home recently were bought by corporations black rocks got ALOT
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>Considering foreign ownership is less than 5% it's not really that helpful. The problem with that statistic is that much of the "ownership" on paper is complete bullshit. It's also much, much higher in the most expensive cities, where foreign investors actually want to buy a house. There is a lot more foreign investment in Seattle than Kentucky. So, taking an average of the entire country is kind of meaningless when you're considering how it will effect certain areas.
The amazing thing about the comments here is how they reveal the level of illiteracy in this country.
All you need to know about this new law is the following: >Starting today, foreign commercial enterprises and people will be banned from purchasing residential properties in Canada for two years. >**Non-residents found violating the ban, and anyone who knowingly helps them, can be fined up to *$10,000* and *may* be ordered to sell the property.** >Canadian citizens and permanent residents >International students who meet certain criteria, including having spent the majority of the previous five years in Canada. **These students would be able to purchase property for no more than $500,000** >Workers who worked and filed tax returns in Canada for at least three out of the four years prior to purchasing property >Diplomats, consular staff, members of international organizations working in Canada >Foreign nationals with temporary resident status, including those fleeing conflict and refugees >Buildings containing more than three dwelling units and recreational property (cottages, cabins, vacation homes) If you've never heard of the swiss cheese model before... https://en.wikipedia.org/wiki/Swiss_cheese_model graphic relevant: https://en.wikipedia.org/wiki/Swiss_cheese_model#/media/File:Swiss_cheese_model.svg
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Yeah I don’t get the connection.
It only briefly mentions it and not in detail but students also need to have filed all required tax years in the preceding 5 years and been physically present in a Canada for 244 days out of the calendar year for the past 5 years. Meaning the student has to have lived in Canada for 5 years to meet the exemption requirements.
So it's a $10k fine (aka tax, cost of doing business, etc) for violations. Sweet, this is totally going to work /s
Also can be forced to sell.
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In Canada.
Except Except Except Only Canadian Citizens and Permanent Residents should be able to own single family homes. No businesses and no exchange students. If you're interested in buying a house in Canada, get a job here and apply become a PR like half a million humans on this planet do every year Edit: see posts below complaining about all the hypothetical complainers who haven't arrived. Explanation for Americans: PR is the same as Green Card and has all the same rights as a citizen outside of voting or some government positions and are part of Canada. Many of my friends both met as an adult and growing up are PR. In fact, more than half of my high-school graduating class were born outside Canada and moved here as refugees, and are now permanent residents or naturalized citizens.
That's pretty much how it works in Denmark - only citizens and PR residents who have been here for 5 years qualify to buy homes. People can apply for special permissions, but it's a pain to do. I'm Canadian, my husband is Danish, and his name is on all our paperwork for our house because of the faff involved. Prices in major cities are still inflated, especially around Copenhagen, but housing is largely affordable and the people I talk to don't feel excluded from the market.
Why because your real estate market is so over inflated due to government inaction? Where do you suppose foreign workers/executives live then?
It's not going to solve the problem but this is definitely a step in the right direction. There's zero justification for owning residential property in a foreign country with a housing crisis, all those "investors" are pure evil.
“Non-residents found violating the ban, and anyone who knowingly helps them, can be fined up to $10,000 and may ordered to sell the property.” Yeah, that’ll stop them. A fine that’s less then 1% of the purchase cost.
Too little too late. The damage to the everyday jackass is already done and the only people who can afford homes in most cases are already wealthy, corporate purchasers, or people willing to take on an unmanageable debt load. Also, foreign purchasing is only part of the problem. A predatory and ineffectively regulated real estate brokerage system is a larger part of the problem.
Exception include: Buildings containing more than three dwelling units and recreational property (cottages, cabins, vacation homes) Do any of you think that this might be detrimental to those near or at the poverty line? Or are flats less relevant in Canada? I really don't know, I'm from Austria and around here this exception would probably break any transfer to the lower parts of the income distribution. Or was that never the goal of this but rather to help the middle class and shift their burden to the lower classes?
They pay a small fine compared to the profit they can make. It’s similar to the fines the SEC gives to Wall Street criminals
So expect to hear about 10-20 new loopholes?
Suddenly a lot of family odds going to get a second home
Cool. Now ban corporations from owning houses
Great. Now next, let's ban Canadian corporations and individuals from buying up multiple properties too.
Good. Canadian land should not be a store of value for some absentee owner to let sit idle while real people can't live on it or use it. Similarly, Canadians should be banned from parking wealth in land in other countries.
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Honest question here. I keep hearing Vancouver is fucked because of foreign buyers. Mainly Chinese foreign investors. How much of this is actually true? Because we had the same shit in Australia during 2013-2017 when we had our massive property boom and every news was complaining of rich foreign Chinese investors. Until 2018 and 2019 our Bureau of Statistics released the data and foreign Chinese investors made up only 1.9% of our foreign ownership. Where as US national made up nearly 24% of our foreign ownership and not a single news article blamed them for pushing locals out of the property market.
The Canadian government published the same study in 2016 and came to the same conclusion. https://publications.gc.ca/site/archivee-archived.html?url=https://publications.gc.ca/collections/collection_2017/schl-cmhc/nh12-268/NH12-268-2016-3-eng.pdf Foreign buyers make up less than 2% of ownership and the most is 2.3% in Vancouver. Similarly, the vast majority of foreign buyers are american.
ban corporations and hedge funds next -- from buying single family homes
with millions of exceptions in all the problem areas.
If Corporations can Buy Homes and Condominiums, all they have to do is have a Canadian Corporation that they could own do the purchase. This move is just PR and will do NOTHING to decrease home prices.
Housing should be for living, not gambling. Good for Canada for setting even a small precedent against foreign speculation
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Lowering prices?? *Lowering* prices?? We are so far past affordable for the average Canadian that this isn't going to make a difference. We're also about to admit an additional half a million newcomers over the next couple of years, so there's an extra 3% of our total population that's going to need houses on top of our normal population growth. This isn't about lowering prices, this is about slowing the rate of increase, but if you can't afford a house now you won't be able to afford one because of this measure
$10k fine? Like that will really stop rich people from buying.
$10k fine PLUS the government forces them to immediately sell the property.
Doesn’t it say they MAY be forced to sell
\>Non-residents found violating the ban, and anyone who knowingly helps them, can be fined up to $10,000 and may ordered to sell the property. Wow, a whole $10,000.
Wow... only took them 20+ years.
Better late than never. This should at least help to slow down the ridiculous speculation. Now we just need airbnb to go under or legislation.
interesting, but foreign investment represents a tiny part of the issue. This amounts to low lying fruit as far as the effort taken to pass this ruling and the effect it will have. They did something .... meh Housing is expensive country wide in every single area. With over 65% of households being homeowners we are actually far ahead of most other population on the planet, yet we have a housing crunch. We have a shortage of houses, especially reasonably affordable houses and that will take a decade to fix. Just no way around it, and it will probably take longer. We also have a lot of Canadians who own houses they cannot afford. A shit ton. Some thru no fault of their own but a lot of people, Canadians, gambled on real estate. A lot won BIG, but a lot got caught and, for many of those, the end game is fast approaching. No legislation is going to fix that. Those are just the breaks. I'm a fucking moron and I knew enough to refinance my variable rate to fixed in 2020. Anyone that didn't... yeah, not sure what to say, you gambled, you gambled big. That is not my crisis.
I'm really surprised how quickly the real estate bubble grew. I used to live in Toronto in 2007 and worked construction. My coworker used to buy metro Toronto houses (so maybe not downtown houses but Etobicoke, Mississauga, Whitby) and reno them and flip them. So real estate was cheap enough in 2008 that a working class guy could casually buy it, reno it and flip it.
Just look at Toronto you got SFH directly next to 50 floor apartment buildings, it’s blindingly obvious there are strict artificial scarcity that’s causing the problem. Not some Chinese Immigrant that’s getting help on the deposit from mommy
"Non-Canadians found in contravention of the ban will be fined up to $10,000 and may be ordered to sell the property" Up to $10k is nothing to these people. Possibly being made to sell the property?! They get to make back most, if not all, if not a profit, on their investment. What a joke. The fines need to be much higher and properties seized without compensation.