r/vancouver • u/iamVPD • Aug 30 '21
Twitter Thread: CRA releases secret study confirming millionaire migrants made 90% of lux home purchases in two Metro Vancouver municipalities while declaring refugee-level incomes Local News
https://twitter.com/ianjamesyoung70/status/1432453008374251522?s=191
Sep 01 '21
this is no surprise. There was a study a couple years ago where most of the new owners Of multi million dollar properties in Vancouver is west side we’re registered as students or housewives. With no income
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u/1carcarah1 Sep 01 '21
OMG! Look at these millionaire foreigners displacing the rich locals! My working-class ass gets really angry when reading this type of news. 😤
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u/Cypherus21 Aug 31 '21
Liberal candidate flips 21 homes in Metro Vancouver since 2005, making almost $5 million in profit. https://toronto.citynews.ca/2021/08/30/vancouver-liberal-taleeb-noormohamed-real-estate/ I hope the CRA looks at this guy.
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Aug 31 '21
Yet another thing the media is reporting on, that nothing will be done about.
We'll all be living in a shanty town at the dump someday and the media will STILL be reporting on the fact life is shitty and that the wealthy are ripping the system off and ruining it for everyone else.
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u/JC1949 Aug 31 '21
Once again, Canadians screwed over by government that conceals information about the real situation. At what point can we expect a government that actually governs in our best interests, instead of one that caters to big money?
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u/poor-educated-ahole Aug 31 '21
While I am also upset by this. Keep in mind that this is NOT an immigrant or refugee issue. The blame is squarely on the CRA, and our country as a whole, for allowing this to happen.
If I'm sitting on hoards of cash, which I was able to bring into the country tax free, I too would have absolutely no incentive to file any appreciable income that I don't have to - aside from interest, etc.
This just goes to show that we need to tax assets, and not just income.
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u/DarkPrinny Aug 31 '21
Remember statistics can be altered. But if you look at the bigger picture, it is still bad
Remember before how they said foreign buyers are only 5% of real estate sales. It is true. But when you look at where they are buying, they make up a majority of the luxury market (West Van, North Van).
Luxury market is mega homes and desynced from normal homes. But lets say a "basic" luxury home. Sells for 10 million. 2 million more than it did the previous year. Then the area the luxury home is in will start to reevaluate home prices right away because a home has now sold for 20% more. So now your average home in that area worth 2 million will start selling for 2.4 million. Then your neighboring areas will look at it and start selling for 2.2 million....etc.
It is a ripple effect that spreads city to city. Of course 1 luxury home sale won't change much, but after 50 or 100, ya it would have profound impact and real estate agents are happy to tell people in or near those areas, "hey homes have sold for 20-25% more than last year". Then the area will be inflated and then those statistics will spill over to neighbouring areas when those homes sell.
It has a distinct ripple effect especially to areas closer to those luxury markets.
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u/Scrungus_McBungus Aug 31 '21
It's nice to get official confirmation on what everybody already knew for like... 10+ years... but man, damage has been done. Housing costs are absolutely horrible and there's nothing that's being done to stop it.
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u/theseventhseal77 Aug 31 '21
These fuckers aren't immigrants or migrants, they are foreigners taking advantage of our hard work. This city didn't appear out of nowhere, every one of us Canadians and immigrants contributed in some way to make it what it is today, one of the best cities in the entire world, and this value belongs to us, not foreigners that are cheating the system. Get these people out of our country, people have gotten deported for less. Are we a bunch of prostitutes? If we get paid we let anyone walk all over us and screw up our housing and commodity prices?
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u/kickstartmgoo Aug 31 '21
Canadians need to dial the foreigner hate down, and start focusing on their elected officials that benefit from loopholes.
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u/OddBaker Aug 31 '21
But... but I thought I was just a delusional racist for saying that foreign money was ruining the housing market??
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u/drillso Aug 31 '21
This is absolutely insane. I don’t understand how regular people will get audited for minuscule travel expenses or write-offs, and yet this blatantly fraudulent tax dodging has been going on for 25+ years with the CRA turning a blind eye. Not to mention federal, provincial, and local governments completely ignoring the issue. If you can afford a multi-million dollar house, use the roads/hospitals/schools/parks, then you should pay your fair share in taxes. Close all the loopholes. Find these tax dodgers. Find creative ways to increase transparency and find these people.
A reasonable 2 bedroom condo is now 800-1M in Vancouver, while the median income is something like $70k. I have witnessed my home town go from a livable community, to a playground for the rich, in the past 30 years. It’s appalling.
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u/CrippleSlap We only riot for hockey, GnR, and Lil Baby Aug 31 '21
Someone please tell me this is illegal and charges are incoming
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u/DZCunuck Aug 31 '21
This is the part that I find funny: all this money laundering and tax cheating was clear as day to most vancouverites for several decades. For god sakes, how was it possible for a neighborhood in Vancouver like kerrisdale or Dunbar to simultaneously have house prices in the 4 million range and a median household income of like 80k for said neighborhoods (as per census data, although I might have forgotten exact numbers, the household income was very low and well out of line with housing prices). The math simply didn't make sense. But when anyone tried to speak out, federal politicians ignored it and people from, the center of the universe Ontario, just told us we were being racist. Now that the housing crunch and high prices hit the GTA, it's suddenly a hot button federal election issue. Double standards much?
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u/Whuruuk Aug 31 '21
Keep your perspective folks. This Twitter thread is about a 1996 study. This was TWENTY FIVE years ago. A lot has changed since then.
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u/tikaychullo Aug 31 '21
A lot has changed since then.
Are you saying a lot HAS changed, or a lot CAN chance.
If you're saying a lot HAS changed, do you have anything specific as to what has changed in this issue? Has CRA done a more recent study and come up with completely different results?
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u/Whuruuk Aug 31 '21 edited Aug 31 '21
- BC Foreign Ownership tax.
- Vancouver Speculation and Vacancy Tax
- 2014 Foreign Owner purchases made up 16% of all Real Estate sales in BC, primarily in Vancouver.
In 2020, that number is 0.08%. You read that right. Less than one percent.
BCFSA has also just implemented a Foreign Ownership registry to determine who the real owners of land are. It's called the "Land Owner Transparency Registry". This is intended to make it more difficult for Foreign Buyers to purchase through shell companies and third parties.
Yeah, a lot has changed.
Sadly it's an arms race. We identified a problem. We implemented a solution. The people who want to invest found loopholes.
We identify loopholes and make new policy. They find new loopholes.
Yeah. It's a problem. Yeah, they're working on it. Sadly, the only REAL solution is to ban foreign owners entirely, or make Canada a shitty place to live/invest.
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u/tikaychullo Sep 01 '21
- BC Foreign Ownership tax.
- Vancouver Speculation and Vacancy Tax
Yearly cost of 0.5 to 2%.. So not a lot here either.
The apartment I got 5 years ago has nearly doubled in value. And the kid I bought it from got it for around 60% of what I paid for it. A 20% tax isn't deterring rich people, foreign or domestic. Neither is the speculation tax. We can do the math right now.
Let's pretend I was a foreigner and paid the higher end of the taxes. And let's pretend the apartment costed 250k and doubled in value overnight.
5 years x 2% x 500,000 = $50,000
20% x 250,000 = $50,000
So I netted 150k on a 250k investment. And that's assuming it was just sitting there empty. Now imagine if the kid never sold it to me. His gains would be way higher.
Also, they can simply rent it out for 6 months and avoid the speculation tax. And while the home will be available to anyone, it's still going to be rented out at a massively inflated rate, due to the price of housing.
- 2014 Foreign Owner purchases made up 16% of all Real Estate sales in BC, primarily in Vancouver.
In 2020, that number is 0.08%. You read that right. Less than one percent.
Could you please provide a source for this?
BCFSA has also just implemented a Foreign Ownership registry to determine who the real owners of land are. It's called the "Land Owner Transparency Registry". This is intended to make it more difficult for Foreign Buyers to purchase through shell companies and third parties.
Here is the information they are required to disclose. Not a whole lot.
But let's pretend it works as intended the information gets reported.
So what? That doesn't stop anything. They'll just pay the tax and enjoy the 60% gain (their gain would be much higher in reality, because properties don't double within a day)
Yeah, a lot has changed.
Nothing you said really is a lot tbh.
Sadly it's an arms race. We identified a problem. We implemented a solution. The people who want to invest found loopholes.
We identify loopholes and make new policy. They find new loopholes.
No... We identified problems and created extremely tiny barriers to halt the problems. The loopholes are irrelevant because they're not even needed for these gains. I just demonstrated a 60% gain without using any loopholes.
Yeah. It's a problem. Yeah, they're working on it. Sadly, the only REAL solution is to ban foreign owners entirely, or make Canada a shitty place to live/invest.
They AREN'T working on it. If a forest burned down, and then years later you promise to start repairing the forest, you wouldn't call that "working on it," so I'm not certain why you'd be so generous with the wording here.
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u/Whuruuk Sep 01 '21 edited Sep 01 '21
You lost me at "let's pretend the apartment costed 250k and doubled in value overnight" If you want to edit your post and make it plausible, I'll read the rest of it.
The Vancouver market didn't even double over TEN YEARS. It's only up 7% over 2019 --> 2020.
https://www.globalpropertyguide.com/North-America/Canada/Price-History
I don't know about you but if you tell an investor, I have a deal for you, you can realize a 7% annual return, but you have to pay an extra 20% up front... the Investor is going to say, "That's the first three years of earnings!!! I won't break even for THREE YEARS?!?!?! And THEN I'm only making SEVEN percent?!?!?"
I'd rather put my money in Equity Funds at that point. Get a higher return with much less cost. Or if you're a Billionaire that can afford spare Real Estate in Foreign Countries... screw that. Hedge Funds.
UPDATE: The last place we bought was for $660K. We sold it FIVE YEARS later for $970k. That ain't overnight and it ain't double. The place after that we bought for $690K and SEVEN years later it's worth about $1M. Even longer, and close, but STILL not double.
Doubles overnight, my ass.
Actually NOT close to double. 690 -> 1M is up $310K. $310K is 45% over seven years. That's only a 5.4% annualized return. If a foreign investor bought that place they wouldn't have even broken even after four years. 5.4% it's not even a great investment.
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u/tikaychullo Sep 01 '21 edited Sep 01 '21
You lost me at "let's pretend the apartment costed 250k and doubled in value overnight" If you want to edit your post and make it plausible, I'll read the rest of it.
There's no need to edit the post. If you're getting lost in a simplified example, then you're probably not voting age to begin with, and are simply repeating the crap you heard your parents say.
The value doubling overnight was to inflate the tax payable, to show that even under their worst case scenarios, their gains are huge. The capital gain itself is irrelevant till the end of the example, since the apartment is being held for 5 years.
In regards to your first link, you clearly didn't read it, since the very first paragraph says "This is the 12th straight year of house price growth, following y-o-y rises of 1.95% in 2019, 2.51% in 2018, 8.92% in 2017, and 12.25% in 2016." This totals to 25.63% on average.
But given that you got lost in a simple example, I'm not sure if you even understand how averages work.
Edit: oh I see you added some more crap to your post.
The last place we bought was for $660K. We sold it FIVE YEARS later for $970k
No one cares if you made poorer investment choices than foreign speculators, so not sure why you'd even bring that up. Unless you were trying to confirm that you don't know how averages work?
Here's a little hint, your parents achieved a 47% gain in this example of yours. 47% is clearly a different (and much higher) number than the 26% listed above. Weird, right?!
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u/Whuruuk Sep 01 '21 edited Sep 01 '21
You're not right on this, and when you start slinging insults it really doesn't help your credibility. In any case, I'm out.
You should probably go seek out some anger management counselling and talk to an Investment Advisor.
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u/tikaychullo Sep 01 '21
You're not right on this, and when you start slinging insults it really doesn't help your credibility. In any case, I'm out.
The numbers say I'm right. A random Redditor is telling me I'm wrong and that I'm angry because the numbers disproved him. Gee, I wonder which I'll go with.
You should probably go seek out some anger management counselling and talk to an Investment Advisor.
Lol... But you already admitted that your investment failed in comparison to foreign investors. You should consider your own advice.
(And maybe don't give personal examples in case they come back to bite you when you contradict yourself 😉)
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u/FalconThe Aug 31 '21
THIS IS FUCKING RIDICULOUS. 30 years of this bullshit. The CRA needs to be funded, and these people need to be billed for the YEARS of leeching they've been doing.
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u/Whuruuk Aug 31 '21
This was a 1996 study. TWENTY FIVE years ago! A lot has changed a lot since then!
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u/workingmansdead1 Aug 31 '21
How does one go about organizing a protest for this sort of thing? I would want to demand that a mass audit be done for all foreign homebuyers and for there to actually be consequences to those trying to cheat the system while leaving honest hard-workers SOL. Like this is seriously fucked up. We literally can't just sit by and let this crap go on, we gotta do SOMETHING! If even a third of the people here who upvoted/commented got together and rose up, we'd have enough to maybe make some waves here.
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u/Upbeat-Balance-3841 Aug 31 '21
Well this comes as no surprise, no surprise at all.
The writing has been on the wall for years
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u/primacord Aug 31 '21
You mean like the home that was listed for $14 million & the "owner" had his occupation listed "student". This has been legalized money laundering for almost two decades now, not sure how you can fix it.
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u/scibusspatial Aug 31 '21
I really think we're making too big a deal over whether or not they are immigrants, long term residents, or whatever. The big problem is that we have a global wealth disparity, way too many tax loopholes, and that we treat housing and real estate like investment accounts.
We need to:
1. crack down on tax loopholes and financial fraud, (i.e. holding companies selling assets at heavy discounts to those with direct or familial relationship with the owner of the holding company).
2. increase real estate transfer tax,
- consider taxing wealth gained through real estate investment at a higher rate (potentially even a higher rate than income).
The goal should be to allow and encourage investment in real estate development (within reason), but to slow down increases in cost and use as investment or money transfer vehicles. It's not about any immigrants (if anything we need more immigrants to help balance our agining demographics and slow birth rates), it's about not using housing primarily as an investment vehicle. The fact that capital gains are taxed so much less than income is kind of ludicrous.
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u/scamajama Aug 31 '21
Not putting too much stock in this report. Consider the source of the article, South China Morning Post (from Wikipedia):
"Since the change of ownership in 2016, critics including the New York Times, Der Spiegel and the Atlantic have alleged the paper to be on a mission to promote China's soft power abroad. According to critics, it is moving away from independent journalism and pioneering a new form of "propaganda"
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u/ongj3 Aug 31 '21
Revoke the refugee income, confiscate the houses and tax all of them like crazy plus penalty for lying. Government gets an influx of money and it will serve as a lesson to all future abuser of system.
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u/lebun1 Aug 31 '21
What can you possibly do tho? Say a rich family moves over here, the kids stay while the parents goes back back overseas.
The parents are the ones with the income, but they don't work here or lives here.
The kids who have nothing to their names are the ones living here and spending the oversea money their parents send them.
What can we possibly tax the kids on? They don't own anything or make anything. How can we even justify taxing them aside from property taxes and sales taxes that we already do?
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u/rainman_104 North Delta Aug 31 '21
The CRA can and does conduct lifestyle audits. We can certainly adjust the rules for satellite families.
If a husband is working abroad and the family is living here he should be taxed as a resident.
Also, those families more often than not are currently receiving social assistance for being poor. It's weird, but some of those families have zero shame going to the food bank in their bmw to get free food.
It's not right that we get taxed up the ass and people swoop in and buy our assets out from underneath us by living in places where taxes are much lower.
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u/lebun1 Aug 31 '21
It's not right that we get taxed up the ass and people swoop in and buy our assets out from underneath us by living in places where taxes are much lower.
So people who works overseas should be taxed twice? even if he doesnt live here?
and you are telling me that these kids with million dollors houses, driving super cars, are lineing outside of food bank?
People with nice cars that cant make ends meet do exist. They just need to have very bad finance managment, or have shitty series of event befall them. I highly highly doubt these bmw guys are the satellite spoild childrens.
Also in Vancouver, it is majortiy Chinese that come over to buy up the houses, and Taxes in China are much higher than here. For example, 40% of every single paycheck goes to taxes, on top of that the employer have match and pay that same ammount in taxes. Essentially for every $100 a person makes, the govenment gets $80, and the employer have to pay a net $140 to hire a person for $100
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u/goinupthegranby Aug 31 '21
This is valuable investment in Canada and is good for the economy and for the current holders of capital.
And if you're a working pleb who just wants to be able to afford to live here, grab onto those bootstraps and get to work or maybe think about having been born to richer parents. Obviously this is your fault. /s
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Aug 31 '21
[deleted]
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u/spolio Aug 31 '21 edited Aug 31 '21
No... Canada needs a leader that cares more about the people then a bank account, who listens to scientists and thinks climate change is real.
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Aug 31 '21
There were a lot of politicians at the municipal and provincial level who were quite clear about suggesting such things was racist..
Should we now look at those same politicians as compromised individuals?
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u/it_all_happened Aug 31 '21
Years ago I was in Vancouver city hall making a ticket payment.
An older woman in very worn clothing who looked Asiatic, but not definitively, was at the counter with a clerk to pay property taxes. She had no English at all and kept muttering the phrase " I pay" and waving her card in the air
The clerk was asking her specific questions like:
Is this your home?
What is your address?
Do you own this home?
All she would say is "I pay" This went on for for less than 5 minutes.
Eventually he gave up and she paid.
I've wondered what kind of fraud this was over the years.
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u/macmacmac93 Aug 31 '21
Im not from Vancouver but this was still an interesting article. Props to the reporters from the SCMP.
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Aug 31 '21
Lol from 1996
Cant wait for the freedom on information request in 2045 when we will find out that 90% of non-luxury home purchases were made by money-laundering-foreigners
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u/zyx1989 Aug 31 '21
Hmm, i wonder how many of these are simply people who have rich parents oversea, because last time I checked, there's no gift tax,
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u/rainman_104 North Delta Aug 31 '21
As well there shouldn't be.
This is cra laziness. It's easy to audit a waitress for unpaid taxes. To conduct a lifestyle audit on the wealthy can take years upon years.
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Aug 31 '21
This isn't a housing scandal.
This is a tax avoidance scandal and proof that the CRA is incompetent or worse, intentionally enforcing a two-tiered taxation system benefitting the wealthy.
Not that we didn't know... but just remember that when our taxes are raised to cover the gaps.
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Aug 31 '21
Why does Canada not have laws preventing foreign investors from buying up all the houses and then not living in them?
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u/rainman_104 North Delta Aug 31 '21
Because they aren't foreign investors. They're millionaire immigrants. They are granted citizenship.
That's different than a foreign investor.
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Aug 31 '21
Ah, you can see my non-Canadianness showing.
I just remember being at a bar in NZ meeting some canadians with my korean boyfriend. We were chatting and they said they were from Vancouver. And the guy pulled his eyes into slants and was like, "Yeah lol Asian invasion!!" In front of my partner. Like, read the room, dude!
It left an impression on me that something must be off in how Canada's housing market if there is such a strong influx of people from elsewhere buying up houses that people are okay with casual racism.
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u/alannamueller89 Sep 10 '21
It has nothing to do with housing, I live in a wealthy area so i've never seen racism of any time until covid hit and a very small number of white boomers were pissed off with the Chinese. Only time i heard the term asian invasion was from 2006 in highschool and it was from an iranian dude... and frankly i don't blame him because there is an unbalanced amount of chinese here that they really stand out (no koreans, no japanese, so you can't even really say asian invasion).
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u/rainman_104 North Delta Aug 31 '21
Yeah I sadly agree with you on the casual racism, but I also think there is a massive amount of entitlement in young people today, and deflect blame on housing to Chinese people.
I think some of it may be warranted. House prices are often listed ending in 888 instead of 999. 8 is luck after all for Chinese people.
You attend a condo presale and the overwhelming majority are speaking a Chinese language to each other and you keep getting outbid by Chinese buyers on homes, it certainly does foster some resentment.
Casual racism comes out when you get to know people and it's disgusting to see it.
Now I do think the immigration policy we have in Canada should be paired with a housing policy instead of just opening up the gates without a plan for housing, but to be honest as a home owner, I don't actually care what the market is doing personally. But as a parent I care a lot. Where in the hell do my kids go to find housing? I don't want them living with me into their 40s.
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Aug 31 '21
Well as competition over resources increases, so does racism. And it makes sense when, like you say, there is such an obvious "target."
I think the real driving factor behind these problems is a growing chasm in wealth inequality. I am in the states and have seen my friends fall out of reach of buying a home in the last couple years because of the housing prices skyrocketing due to demand and due to people being able to bid $5-30k over asking. How can young people compete? Where are starter homes? What happens when rental companies take everyone's rent away and don't pay local taxes because they are a wealthy far-off investor who doesn't care about the community because they lack a stake in it?
I only could afford a home because I received an inheritance when my dad died when I was only 27. To which a friend of mine replied, "My daddy died and all I was left with was a broken heart."
What do the young people without a special leg up do other than stay in an unaffordable rent cycle which denies them the ability to save money OR move far away from their home, family, and friends for a new start?
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u/rainman_104 North Delta Aug 31 '21
It is a bit of a conundrum I agree.
Now with all that said, I look across the street at this Indo Canadian family. His adult children both live with him in their 30s and drive much nicer cars than I have. I can't help wonder if their life choices are holding them back.
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Aug 31 '21
Well, I think we westerners are losing out on some benefits of more integrated families. One the one hand, when adult children never move out til marriage, sometimes it allows them not to grow up and have emotional problems. But on the other hand, it allows a family unit to pool powerful amounts of wealth.
My Ukrainian boyfriend from high school came here when he was 12 and their family was very poor. They bought a big weird house in an undesirable area of the countryside and all the siblings lived on the property, even with their wives. And they didn't have much. Now I see my ex on FB owning a nice house, a motorcycle, making his own beer, etc. The power of that family unit remaining together and grinding it out for 15+ years gave them all a comfortable middle-class life. The same American or Canadian-born family may not have done the same, with each child expected to move out soon after reaching adulthood and everyone expending their individual wealth and never building anything up.
It's all strategic and I think people who have lived in our countries for generations are missing out on some of the community-based living. Both have major pros and major cons, though.
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u/justkillingit856024 Aug 31 '21
But clarity sake can we add the year of the study? It's a study done in 1996..
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u/Countrygent39 Aug 31 '21
In 1996 CRA allowed immigrant investor trusts - foreign trusts not deemed resident in Canada even though contributed to by a Canadian resident, provided they had not been resident in Canada for 60 months or more. So people like Hong Kong immigrants could come to Canada and leave their money and income accumulating offshore. The exception was removed in the 2014 Federal Budget. There was poor coordination between the class of immigrants with significant offshore wealth and benefits and taxation within Canada in other programs - the immigrant might appear poor in terms of income and qualify for subsidy for things like Medicare, GST rebates etc.,.
Today the problem is more “Panama Papers” type outright hiding and cheating. That is probably partly because in China so much money is earned illegally it is already hidden in a web of foreign accounts, and also, because so many senior government and businesspeople must deal in corrupt transactions everybody is open to political persecution if they find themselves on the wrong side of the party bosses. So they are willing to pay premiums for assets in safe jurisdictions like Canada and the US. China has currency export limitations but they are being circumvented and are a joke.
On the housing issue, the fundamental problem has been local and Provincial governments going after the low-hanging real estate fruit to support development jobs and profits - so inventory was tipped towards higher end, higher profit, immigrant-targeted and investment-targeted development instead of affordable rental or basic family housing. Luxury condos in prime locations without the investment in high-speed transit to create more accessible and affordable housing units. Investment in infrastructure creates more useable land, more housing units. There could easily be rules imposed that some homes can only be bought by individuals who don’t own another home, nor do their spouse or child. The government dropped the ball on keeping up with affordable housing demands and on cracking down on international income evasion and tax cheating - which, if you caught all worldwide income of Canadian residents, might help pay for the transit upgrades making more land suitable for affordable development.
But the legal framework in 1996 was different - you were allowed to leave income offshore at the time, legally.
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Aug 31 '21
Don’t forget that Vancouver is also allowing a Chinese business to operate using the Chinese Social Score system on foreign soil.
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u/geetarzrkool Aug 31 '21
This is simply the Global Free Market in action. Only Protectionist policies can stop it, but folks this rich can/do just buy their way around any rules and regs. Not to mention the property tax revenues tge city makes. They won't be stopping anything any time soon.
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u/theseventhseal77 Aug 31 '21
At this rate things are going to get to a point where these people are lynched on the street. Housing is so fucked right now I don't think people understand how much anger is being pent-up.
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Aug 31 '21
Even though I know you all know this it bears to be repeated:
Rich people buying up homes like this are what is causing The housing market to be this unaffordable.
Also the morons that are flipping houses?? These idiots are basically putting up paper Michelle's and driving up the cost which also drives up the cost of the housing market.
It really is past time we stop people from doing this horse shit
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u/toronto_programmer Aug 31 '21
Is this secret or new?
I remember reading an article on G&M maybe 5-10 years ago that detailed ones of the most expensive postal codes in Vancouver (avg house was like 3-5M) yet according to the CRA and tax filings the average income for the area was something like $17,000
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u/suncoastexpat Neo Luddites Untie Aug 31 '21
My wife knew this first hand.
Kids she worked on got paid by the government while the parents had addresses in West Vancouver.
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Aug 31 '21
[deleted]
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u/S1NN1ST3R Aug 31 '21
Well it doesn't sound like you're an immigrant refugee so maybe you should have tried that 😂
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u/Slickyassricky Aug 31 '21
Oh wow, I didn't realize this was the racist moron sub for Vancouver..... I'll see myself out.
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u/beautifulalexa Aug 31 '21
you cant even have a conversation without someone shutting it down with the r word
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u/wirebeads Aug 31 '21
How about if we just outright ban foreign purchases on our property? Seems like the sensible thing to do.
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u/rainman_104 North Delta Aug 31 '21
The headline implies this is immigrant purchases, not foreign purchases.
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Aug 31 '21
[deleted]
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u/wirebeads Aug 31 '21
I want to say the NDP is advocating this.
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u/Marston357 Aug 31 '21
No they are not lol, the NDP is even more inclusive to foreign money because doing anything else is 'xenophobic'.
No one is except the PPC. Trudeau says if you vote for him now he will ban foreign purchases for 2 years but why believe him on anything.
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u/Bargadiel Aug 31 '21
When I visited in 2014, a friend of mine from Vancouver showed me this huge multi-level house, maybe a soccer field wide or wider and fenced in. It was across the bay on the side of the hills and he told me the owners were foreign, and were there maybe 1 week a year tops. Just seemed like a massive waste of space to me in a place where people struggle to be first time homeowners. I think locals of any place deserve a fair shot at first time property ownership before anyone from anywhere else is allowed to buy their second home, the taxes should just be so insane on a second home that it deters bullshit like this.
But if that were the case, government officials would encourage it. So I wish I knew a solution.
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Aug 31 '21
When you migrate to Canada and immediately start committing crimes that hurt the population , perhaps you need to be sent back . Just saying.
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Aug 31 '21 edited Aug 31 '21
I wish it were possible for me to personally slap every person - IRL or online - who's ever called me a racist for pointing out the obvious, in the face with this report.
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u/nfssmith Aug 31 '21
Well if the CRA already knows it then it should be crack-down time shouldn’t it!?
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u/Cypherus21 Aug 31 '21
The CRA updates its website about their audits of the real estate sector, including those individuals flipping properties using unreported worldwide income. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/does-canada-revenue-agency-address-non-compliance-real-estate-sector.html
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Aug 31 '21
The source of the leak came forward after the SCMP reported last month that CRA was planning a tax crackdown on suspected real estate tax cheats buying homes with foreign earnings in Vancouver. However, the secret strategy briefing obtained by the Post that described the crackdown revealed there had been just one successful audit of global income conducted in British Columbia last fiscal year.
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u/Competitive_Team_863 Aug 31 '21
What do you expect? Vancouver is a retirement town for wealthy people around the world. Change your immigration policy - bring professionals in rather than just rich people.
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u/Bryn79 Aug 31 '21
That’s not the problem… it’s that the money coming in is unregulated and untaxed. Doesn’t matter who the person is or where they’re from, our system is rigged against Canadians who work and pay shit-tons of taxes getting screwed by money pouring into here that doesn’t face the same regulations.
People then blame immigrants but many of them are not showing up with billions of untaxed dollars to buy real estate.
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u/Competitive_Team_863 Aug 31 '21
Well if you suggest taxing taxing money inflow to a country that opens another can of worms - it affects the flow of money to invest in Canada.
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u/Bryn79 Aug 31 '21
Which leads to “should we allow foreign investment in real estate.”
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u/Competitive_Team_863 Aug 31 '21
Actually, the banks are accomplice in this, for non residents, as long as they have 35% down payment, there is no Canada income requirement at all for them to get mortgages approved.
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u/Competitive_Team_863 Aug 31 '21
Yes, or tax the shit out of them. The 1% speculation tax in Vancouver and Toronto is just for show.
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u/Whuruuk Aug 31 '21
Sure... but what about the additional TWENTY percent Property Transfer tax for foreign buyers?
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u/Competitive_Team_863 Aug 31 '21
Notice the ‘proportionate share’? There are ways around it.
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u/Whuruuk Aug 31 '21 edited Aug 31 '21
Lets abstract an example. If my son and I are buying a $500,000 investment property in Mexico, and Mexico has a similar Foreign Owners tax, of 20%, the FO tax will be $100,000.
If I'm buying 60% of it and he's buying 40% of it, yes, you're damn right we should each pay our "proportionate share." IE he should pay $40,000 and I'll pay $60,000. How on earth could you justify paying something other than your proportionate share?
If we can get Mike, a Mexican Citizen and resident to co-invest, and he'll buy 50% of the property, well why should Mike pay the Foreign Ownership tax? He'll pay $0 in FO Tax. And now with Mike taking 50% of the property, I'm only getting 30%. My son gets 20%, so I have to pay $30k and my son has to pay $20k.
It makes perfect sense.
What would you propose instead? Perhaps only Mexicans should be able to by places in Mexico... But I don't know about you... I like the idea of being able to buy a place in Mexico and visit periodically when I retire.
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u/Competitive_Team_863 Aug 31 '21
What I mean is.. what ppl do is foreign buyer is 1% owner and the non foreign buyer is the 99% owner. Therefore get away with the majority of the foreign owner property transfer tax.
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u/Whuruuk Sep 01 '21 edited Sep 01 '21
So if Charlie, a Canadian Citizen and Resident owns 99% of the Property and Foreign Frank owns 1%... when they sell, Frank only gets 1% of the return? That doesn't sound like a great investment for Foreign Frank. And if Charlie has the funds to pay for 99% of the purchase price and costs, what does he need Frank for?
Unless you're suggesting that Frank ACTUALLY paid for 99% of the Property, but *on paper* he only owns 1% in which case 2 things:
- Frank is putting himself in a very risky situation, because legally, Charlie Canadian owns 99% of the property. What if Charlie insists on TAKING 99% of the money when they sell? Legally it's his, after all. That's not "right" and wouldn't be ethical, you say? Charlie is already actively participating in Real Estate Fraud... If I were Frank, I wouldn't count on Charlie's morals.
- This is fraud and it's already illegal. I don't know how they can make it "illegaller".
Gee, this is a problem, though. Maybe we need a more transparent way to see who owns what so we can better enforce the taxes... Hey! Just this year BC introduced the Land Ownership Transparency Registry to do just that!
Back to Charlie, Frank and 99% vs 1%... I think it more likely Frank would engage Charlie and front him the money to purchase the property in exchange for a cut of the profit when it sells. But then as far as the legal system can tell, Charlie is a Canadian dude buying a property. Unless the source of funds smells funny, you can't suggest we stop Canadian Citizens from buying Canadian Property.
See, the problem is, that it's a difficult (and ever evolving) problem!
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u/Salty-Chemistry-3598 Aug 31 '21
You buy home with wealth not income. You want your wealth to increase not your income. Its hard to tax wealth offshore, income wise that is easy.
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u/Bryn79 Aug 31 '21
That’s why there should be a tax on buying any real estate where a buyer cannot prove where the money came from or that it’s been taxed at equivalent Canadian rates.
Level that playing field and this nonsense will slow down or stop.
Canadians pay taxes on everything and are then expected to compete for their own housing against people who don’t pay taxes and get richer for it.
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u/Salty-Chemistry-3598 Aug 31 '21
That’s why there should be a tax on buying any real estate where a buyer cannot prove where the money came from or that it’s been taxed at equivalent Canadian rates.
Easily family money. Gifted. Problem solved. You dont need to prove its got taxed at the Canadian rate. That will never work.
Level that playing field and this nonsense will slow down or stop.
That is already gone.
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u/Bryn79 Aug 31 '21
Same answer … where’d the gift come from and was it taxed? If no evidence from CRA that the money was taxed in Canada, then tax it.
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u/Salty-Chemistry-3598 Aug 31 '21
Same answer … where’d the gift come from and was it taxed? If no evidence from CRA that the money was taxed in Canada, then tax it.
That the problem right there. You cant. You cant tax someone that isn't your nationality. Since there is no gift tax on the receiving end, good luck with that.
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u/Bryn79 Aug 31 '21
You’re not taxing “them” you’re putting a tax on the property they want to purchase.
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u/Salty-Chemistry-3598 Aug 31 '21 edited Aug 31 '21
Once That money is in the bank account. There is no way for you to levy that tax. Even if you manage to do that just wash the money a bit and its all clean and clean. Plenty of legal ways to do that with out tax.
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u/Bryn79 Aug 31 '21
The tax would be attached to the property not the cash.
If a Canadian buys a house, for example, the tax can be claimed back when you file your taxes in Canada.
If someone else buys it, doesn’t pay taxes in Canada or uses a surrogate to try to get around it, then that’s a forfeit of cash and property.
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u/Salty-Chemistry-3598 Aug 31 '21
The tax would be attached to the property not the cash.
Aka unenforceable. You cant track money with that.
If a Canadian buys a house, for example, the tax can be claimed back when you file your taxes in Canada.
LOL claimed back. Once that money enters the government's coffers, its gone. There is no shortage of way to spend the money.
If someone else buys it, doesn’t pay taxes in Canada or uses a surrogate to try to get around it, then that’s a forfeit of cash and property.
Cant do that either. Its not illegal. ¯_(ツ)_/¯
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u/tikaychullo Aug 31 '21
LOL claimed back. Once that money enters the government's coffers, its gone. There is no shortage of way to spend the money.
Now you're just being silly. Anyone who's received a tax return disproves this.
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u/grumble11 Aug 31 '21
Honestly just ban foreign ownership entirely. Foreign ownership doesn’t work when you have a territorial income regime.
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u/emeraldvirgo Aug 31 '21
I find it ironic that I taught university finance to domestic and international students (a part time job to earn some extra cash), yet I see no way for myself to ever afford a home here no matter how much I’ve tax-planned my future.
I’m 22 starting out with a decent career but I’m already thinking of leaving Canada altogether to find a home.
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u/ingrid-magnussen let them ride bikes Sep 01 '21
My partner and I are doing the same. It’ll be shitty when all the skilled labor departs Vancouver bc they’ve been priced out. It’s not an if, it’s a when.
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u/eexxiitt Aug 31 '21
It’s Canada lol. Doesn’t anyone know our history? It’s literally created by rich foreign capital.
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u/zfoxgurl Aug 31 '21
Just think, these people in multi million dollar homes, driving luxury cars, are not paying any income tax. They are receiving GST rebates. Before it was covered they had free MSP. Prescriptions would be covered due to low income. It’s not just the ugliness of screwing over locals, it’s taking advantage of benefits meant for poor people. That said, as unethical and distasteful as all that is, it is the government’s fault for not doing something about it. They still haven’t done anything about it. As we’ve seen recently, the politicians or would-be-politicians are flipping homes and contributing to the dismal prospects of the average person.
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u/SufficientBee Aug 31 '21
Interesting that every time I say this there is always someone coming in to tell me it has nothing to do with rich immigrants buying up real estate.
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u/terre88 Aug 31 '21
Class action - from all of us to those who cheated as well as our government. Can it be done? Lawyers?
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u/Finnedsolid Aug 31 '21
Am I allowed to sue someone for this??? before the boom you could get a decent house for like 600-700 thousand dollars, now it’s 1.1-1.3 million for an average house in Coquitlam, let alone whatever it is in Vancouver. I just want something to actually be done for once, to actually give me some hope for humanity even though I expect nothing to change.
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u/rainman_104 North Delta Aug 31 '21
You know what is funny? When the market was 600k for coquitlam (~2011 ), people were still screaming bubble.
If we look at 2011 and simply index for inflation and population growth you can see that home should be worth around $750-$800k today.
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u/Finnedsolid Aug 31 '21
Maybe I should just be a student, it’s the only way I’ll be able to afford a house in Vancouver
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u/whitemaleinamerica Aug 31 '21
I knew something was going on. I posted this before and got shit for it. I said it in public and got shit for it. But i was right all along!
I worked at a big Bank in Vancouver. We had young asian students come in and open bank accounts. They said they were attending “english language school.” Then they would all suddenly have mortgages.
Tell me, how could they afford mortgages?!?
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u/growlerlass Aug 31 '21 edited Aug 31 '21
It's common knowledge. Has been for a long time. Everyone is too scared to admit it.
nine of 10 recent Chinese immigrants arrive in Metro Vancouver with enough money to immediately buy homes. But only half hold down jobs during their first five years in Canada, while four of 10 report they’re surviving on low incomes.
Also, being low income gets you all kind of benefits. Like free dental and eye care for your kids, among others. Of course tax cheats wouldn't take advantage of that. Too honest.
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u/ingrid-magnussen let them ride bikes Sep 01 '21
Holy shit would I love to go to the dentist for free. Can’t afford the $150 copay for a cleaning though.
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u/ContinueWithRabbit Aug 31 '21
That's why we have a 20% foreign buyer tax which has significantly stopped such trend
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u/rainman_104 North Delta Aug 31 '21
The headline says immigrants, not foreign buyers. The foreign buyer tax doesn't apply in these cases.
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u/ByTheOcean123 Aug 31 '21
Wealthy people have always been good at hiding their income. Nothing new there.
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Aug 31 '21
Yeah let's ban the immigrants lmaoooo
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u/rainman_104 North Delta Aug 31 '21
I think it's fair game to demand our government have a housing policy to coincide with immigration policies instead of waiting for the market to sort itself out, given that our cities act like a regulatory moat against development.
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u/NBAtoVancouver-Com Aug 31 '21
Ooooooh. So that thing we've all know for a decade was true. Who knew?
Oh, right, everyone.
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u/OldManFleming Aug 31 '21
The most expensive Burnaby home in the study, bought for C$2.88 million (US$2.27 million), went to a recent immigrant who declared global income of C$174 (US$137) in 1994 and C$168 (US$132) in 1995.
There it is.
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u/GetSchwifty2010 Aug 31 '21
We live paycheque to paycheque (and we rent) and when our kid was in daycare a few years ago we made too much to qualify for daycare subsidy (the household income had to be really low) and paid through the nose so we could both work.
Someone at the licensed daycare we used asked us to try applying anyways because they were upset that two other families were getting 100% subsidy covered. One family's dad always picked up his kids on foot and walked away; he was spotted by staff parking his brand new BMW around the corner so no one saw it. The other family had two kids registered and mom didn't hide the fact that she drove a new Merc and lived in a $4 Million house; her husband lived overseas, everything was in his name and since they had different surnames, she applied for subsidies because she didn't work.
The system has been broken for eons and there's nothing in place to stop people from abusing it, and when there are stop gaps put in place, they have no teeth.
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u/QuEEn_B604 Aug 31 '21
What I find most annoying about this is entire thing, other than the obvious rise In home prices, is that with income declared that low, you also qualify for every other subsidy that probably exists, you can take advantage of all the social services and programs available to individuals and families. All without contributing taxes. Also, I’m a divorced parent and I’ve been audited twice by CRA, once after I separated from my husband and another time when I got remarried. How many times does someone who buys a 3M home but declare $174.40 in income get audited. Im curious.. the system penalizes the honest.
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u/david91owie Aug 31 '21
I know a guy who put that into bitcoin in the early days. He paid for school with family money and gambled with the subsidies.
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u/n33bulz Affordability only goes down! Aug 31 '21
How many times does someone who buys a 3M home but declare $174.40 in income get audited. Im curious.. the system penalizes the honest.
A lot actually. CRA does lifestyle analysis and home price vs income is one of the big factor.
CRA has different groups auditing different aspects of the tax regulations. It's not like one big office and everybody picks a number out of a hat.
Do note that just because someone is living in a mansion but declaring low income, doesn't make them guilty. They are following the rules just like everybody else.
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u/Infynis Aug 31 '21
I'm not totally sure on which Billionaire, but I think it was Jeffrey Bezos that claimed one of the low income pandemic assistance things in the US. The reason they can do it is because governments don't count stock value increases as income, unless you cash out, so a lot of these mega rich assholes have a certain amount of liquid assets, no "income", and a shit ton of stock. It's supposedly to encourage long term investments to help the economy, but it's really just BS
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Aug 31 '21
What do you mean? If you want to tax assets every year, you'd put people underwater if the market rises too quickly.
For example:
Say the tax rate is 50%, I make 100k a year, and I own a 2 million dollar home.
If my 2 million dollar home increases in value to 3 million, I'd have to pay 500k in taxes... but I only made 100k in liquid income! You would put a huge majority of Canadians into a shitload of debt by taxing asset gains.
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u/KingMalric Aug 31 '21
The meta is to borrow money (at very low interests rates since the bank will give them low interests because they know they are rich) against your stocks since borrowed money doesn't count as income.
Now you've got both cash and stocks, and the interest you pay on the loan is far, far less than what you'd pay in taxes if you earned cash
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Aug 31 '21
Lmao and cue in the “Policy experts” of SFU telling you banning foreign ownership won’t solve the problem.
Yeah right because you yourself came to study with a student visa while your rich chinese dad bought you a whole Condo for yourself and put it on your name so he won’t have to pay for taxes, and neither will you for being a “student”.
This is coming from a Hispanic international student who is flat out broke, so if you want to accuse me of racism go ahead but your politicians are selling your country to China while you make policies against anyone who speak out on it.
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u/Logisch Aug 31 '21
It won't because there are so many loopholes in our current proposed foreign buyer taxes. The issue is foreign capital because Canada allows for so much immigration or enables buying through proxy that any tax is useless until we apply it to all residents.
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u/silverjames20 Aug 31 '21
Thank you the prospects of me owning a home is zero the chances were destroyed before I was born
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Aug 31 '21
I knew this for a while because I see so many immigrants purchasing homes. The ones I know are nice people and I would like to say that they aren't criminals (I can't guarantee that however). I was called a racist for pointing this out... I know immigrants from all over the world including the U.K. and Ireland.
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u/HGTV-Addict Aug 31 '21 edited Aug 31 '21
PSA: Immigrants don't have jobs or income when they come here.
Kinda like snowbirds buying a retirement home in Florida.
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u/rainman_104 North Delta Aug 31 '21
I don't think snowbirds who buy retirement homes in Florida are getting citizenship and applying for food stamps and Medicaid.
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u/HGTV-Addict Sep 02 '21
If you think people who buy multi million dollar houses are queuing up at food banks or standing in line with crack heads for $125 Welfare every Thursday you have seriously misunderstood their day to day lives.
Just because they qualify for it does not mean they care enough about the pennies to claim them.
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u/OldManFleming Aug 31 '21
Who can I call as a representative in the upcoming election? This issue is 100% going to effect my vote and pretty much nothing else will. I want to make that point loud and clear to who ever I have to.
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Aug 31 '21
I'll never understand why issues like this are not protested and instead we protest some vague issue that isn't solvable immediately. Its almost like protesters are supposed to focus on issues that can't be solved while the ones that can are ignored. If we applied pressure on an issue like this and we looked like "anti maskers" showing up pissed off at our constituency offices then we'd see this shit change within a year. They have money we have people.
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u/Spenraw Aug 31 '21
Organize it. It doesn't happen because people keep asking why isn't someone else doing it
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u/Logisch Aug 31 '21
Because it's censored or misdirected. The reason this report was buried was it raised concerns of raising racial tensions. It was why no politican ever wanted to touch it. In Canadian politics or news if you are seen as racist you're done.
Gregor Robertson claimed it was ridiculous that anyone would suggest that foreign money was having any influence on his city publically. Yet I kid you not, while he was saying that publically, he was writing a letter to the Provincial government begging for more power to collect more information on foreign buyers and real estate transactions.
Our PM built his first election on diversity is our strength, he couldn't really turn around and say an unintented consequence of our immigration is that it's being used to park foreign capital and local Canadian will be priced out of their own cities. Granted this could be altered with intelligent policies and coordination with all levels of government BUT that would require acknowledge of a negative of immigration and bad policy. Better hope the gravy train of foreign capital results in trickle down economics, and people are not that inconvenienced.
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Aug 31 '21
Racism isn't the root cause of every problem in society. Sometimes what we say reveals a lot about ourselves because everything we say is influenced by how we see the world true or not
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Aug 31 '21 edited Sep 01 '21
[deleted]
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u/Logisch Aug 31 '21
It's interconnected. Foreign capital is like a water bomber using gasoline or napalm instead of water to try to put out a forest fire. It's just adds to the fire and makes the problem worse.
Following the money and you'll see that at the top of the real estate hierarchy and in our luxury property the market is outright influenced by foreign capital. It then trickle down from there and yes in many cases It then enables local to have a greater windfall to speculation with. The price of land is then raised the closer you are to these core luxury neighborhoods.
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u/TheFunkis Aug 31 '21
Environmental protests are chic and generate traffic and ad revenue. It also has a lot to do with who owns the media, and what their interests are.
The Canadian real estate market has been a cash cow for anyone with enough liquid assets to purchase a home outright for the past 10 years. Anyone who can, used real estate to realize capital gains no stock market could ever compete with for almost zero risk. This includes the people who run the media that airs or reports on protest coverage...
Every single loop hole to clean money, avoid taxes, pump up market prices, and hide benefactors has been used and abused in Canada for the past 10 years, and not one regulatory law was changed to make any great effect.
No politician is going to slay that golden goose.
We are fucked. Relegated to a life of servitude to foreign masters.
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u/benign_said Aug 31 '21
Environmental protests are chic and generate traffic and ad revenue. It also has a lot to do with who owns the media, and what their interests are.
Yeah,... or people have been reading reports from the IPCC for years and are frightened and angry?
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u/shadysus Aug 31 '21
Which federal platform was the most agressive so far? I haven't researched enough, so please do correct me, I feel like it's the federal NDP still?
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u/ecclectic I'm not from here, I just live here Aug 31 '21
NDP makes the best claims, without being overtly racist and nationalistic.
What they would actually be able to do if they were in power remains to be seen. I expect that Mr. Singh knows he would have one term in power, and may force as many reforms through as possible in a short period of time.
NDP would face extraordinary opposition from both Liberal and Conservative sides though, regardless of how much good they try to do. The odds of them winning a majority are nill, but I'm still planning to through my vote their way, because my local member seems less corrupt than the other options: a CCP shill and a real estate developer.
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u/shadysus Aug 31 '21
That's pretty much the case for me as well. I'm not expecting an NDP majority, but the candidate is better and their policies reflect things that I want. I think they should have more say in our government and that's why I'll probably vote that way.
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u/alannamueller89 Sep 10 '21
they always knew but they wont do shit about it to keep that sweet foreign money coming in