The cheapest people I've ever known have also been some of the richest people I've ever known. Think they don't care about 15%? Yes that money is nothing to them but to think they don't care, you're so wrong.

And thinner/slimmer :nyan::nyan::nyan:

So paying an extra 15% tax is not ok but paying a few hundred thousand to $1mil over asking price is?
(Yes, not all transactions but the willingness to do it means something)

Honestly, there is no one answer to this question.
For the people living here who have to borrow money from the bank, the 15% tax may affect their decisions.
For the people not in Vancouver, then that 15% only means they need to compare total cost vs say buying in Toronto who doesn't have the tax.
But if the Cdn dollar drops some more, then they gain more buying power making that 15% tax look less when comparing houses in other countries.

It was more of a point and not a question, but I do see your point

The thing is, those people are probably not the mainlanders looking to park money in some safe haven. Do you really think when some guy worth 100 mill sees a bunch of his friends moving to Vancouver and buying in west etc sending their families over to be "safe" and get an education, this 15% automatically means they will no longer want to come?

If they are responsible for the luxury market, do they drop down to a lesser property because of the tax?

Difference being is the money going to pay the tax rich people view as never getting it back as there's no substance to it vs say a piece of property or stocks/bonds.

While I don't disagree that a % of these mainlanders and or any other insanely rich foreign person won't care about the 15% for a variety of reasons we should remember that not all the people buying up these properties are this type. Speculations from people are this group makes up a huge %of people buying up places but we really don't know exactly what % that is. There are a ton of rich people legitimately buying places. Take someone from Hk for example, a 4 million house here is still an insane deal to them consider how much 4mill gets you in HK.

The main point is I think a lot of people regardless for their reasons will buy it will care about the 15% to a degree and that tax alone will be enough to deter some, some others will just choose to either suck it up and pay it anyways, or just not care at all.

The point I'm trying to make is small business will hurt a lot more if the average worker stops going out and spending cash because they are tapped out. Sure rich people spend cash, and for the ones that live here great, but for the ones that just park their money into a house and nothing else it hurts local businesses more than it helps. I'm sure a restaurant would enjoy a steady flow of middle class workers coming 7 days a week over some rich people making it rain a few times a month.

Of course they can afford it, but when their purpose is to buy a house as an investment, you're paying 15% more than everyone else which is essentially giving away 15% of your home's value right away. That's great when housing is rising 30% a year but let's be real, that can't continue. So if they want in bad enough they'll pay it, but don't think for a second they are going "meh I have fuck you money what do I care?".

So because in 2016 their home is worth 2.5 million they won't accept anything less than that in the future even if the market went to shit? People will have to price it to whatever the market dictates.

^^
I'm not disagreeing with you about the average worker spending money here and the investor just leaving a vacant home here hurts the economy but I'm just telling it how I see it. Lots of money is just not parked here. Don't they send there wife and kids over here to live anyways?

Like my previous point, if they willing to spend $500k over asking.. I'm sure they'll make it work with the 15% tax

If everyone's waiting to buy in when the bubble bursts, what makes you think people won't wait it out when it's time to sell for the prices to jump up to 2016 prices again if it does fall? Yes, the people who are stuck signed to ridiculous mortgages that they can no longer afford it may have to let it go for possibly cheaper, but many people who own property in Vancouver aren't new buyers, but people who have owned since god knows when.

This could also be a problem if no one is willing to let go of there properties if the prices went back down to 3 years ago

To say that 15% tax has no effect is very optimistic IMHO.

It all comes down to math. A 2M dollar home now costs 2.3M to foreign buyers, while its value in local buyers is still 2M. The first 2 question to ask is "will the foreign buyer be able to recoup that 15% PLUS a reasonable profit when he/she decides to sell?" and "will this money be better invested elsewhere?"

The first question comes down to the time foreign buyer decides to keep this investment. The 15% tax basically make it impossible for quick deals (buy, hold for 6months, sell for x% profit, rinse and repeat) as it would take a while for the property to go up by 15%+. So the investor has to factor in the risks and cashflow problems during this period.

Second question kinda reverts back to the first question. If by investing elsewhere, investor can get a similar return, but waiting for less time (hence less risk), then why not? If the return is less elsewhere, then would the additional risk be worthwhile for Vancouver?

When you solve these questions, it's not hard to see the effect of this tax because remember, in the scenario I mentioned takes no assumption of market condition (or actually the assumption that the market would continue to grow) and everything else except the tax would stay constant.

Sure some super rich Chinese could have a different expectation and continue to buy, but the tax would act as a barrier preventing those with less affordabilities to enter the market. How much of those people account for the entire market is what we would find out later.

If I was a foreign investor I would just go straight to the USA now. Canada was attractive due to easy immigration relative to the US. Now immigration is harder with a a foreigner tax negating the stronger USD. Mainland Chinese people love SF Bay area and the San Gabriel Valley near LA.

"But Vancouver is closer to China, has better Chinese food and you don't need to learn English!" Which is true but is it worth 15%?

allow me to sum up this thread :lol

https://i.redd.it/o1f18trk0bdx.jpg

:lawl:

...
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:okay: FeelsBadMan

Even the Mainlanders are gone, don't forget there were used to be millions of Honger / Twanger immigrants who temporary left Vancouver, worked so hard in Asia while China is booming and now they are probably sick of the expensive tight living space with their young borns. They do have immediate right to abode, the crowd is unlikely be able to afford those monster houses in the 80-90s, but it will quickly fill the population again.

I am one of them, I can forsee in the next decades, many of us will move right back /rant FailFish

Here is the thing none of you guys have focused on. If it doesn't cool the market, fine. Your government gets to take billions in tax dollars to fund public services, reduce income taxes, and fund infrastructure. It is a win win situation for most people in BC.

You are forcing these housing flippers to pay taxes for income they would never report in the first place and if they stay and abuse welfare etc, then at least the blow is softened by this tax.

Look at the Hong Kong market for example. Non resident tax, non first property tax allowed the Hong Kong government to have one of the biggest fiscal reserves in the world for a population of 7 million (how they decided to spend it is another thing). As a result, my income tax is effectively around 10% with zero capital gains tax.

i think many have kids here and while investing is a huge part of the package you cannot forget benefits like social support/healthcare esp for the aging ones

You seem to think that income tax reductions is outrageous. Short memory? That happened December 2015. Unless you are like the rest of RS and make over 200k a year.....

was being cheeky

not outrageous but i just don't expect anything from the gov't...if/when it happens then it's a pleasant surprise and that's great...guess i'm cynical...

i have a terrible memory, but do remember lots of useless trivia information
i wish i made over 200k like the rest of RS...i'm just an east van 200k-in-aire

Hondaracer, was it you that said you're selling your place next month? Are you planning to price it for a bidding war or for what you actually want for it? Has this tax concerned you at all?

Honestly I've got no idea how it's gonna go.

I'll provide the whole story of the sale and the house once it's gone

The house is in east Van, Hastings sunrise but it's not a traditional Vancouver special lot, its smaller lot, but a bigger house, 2300 sq ft, 3 big bed rooms, 2 bath, built in 1912 lol

The upside for us is that the price range this house is in is the same or slightly more than some of these newer duplexes are in. So yea, odds are we will be pricing it anticipating multiple offers.

If we don't get what we think it's worth, odds are we probably won't sell, I'd rather keep it I think.

We ain't balling like that really however, we came into this house due to unfortunate circumstances so it's kind of mixed feelings as to what to do with it

Oh, and regarding the tax, my only concern is the trickle down effect of prices, this house, albeit very old and having its fair share of warts, is more than likely a local family is going to buy to live there, not tear down or have sit vacant.

your home that sounds like a perfect home for a local with a relative in contracting that can help fix it up, or a local guy that'll rip it to the studs and do it up new while keeping the heritage style shape of the home intact and resell.

Basically. The structure is good even though it's 100+ years old and the main issues with old homes such as roof, foundation drainage, Windows, siding/envelope have already been addressed.

If I had a month in it myself I could probably get another 100k out of it, but it's a toss up whether or not lip stick Reno stuff would increase the value as somone buying will probably want to do things themselves.

Not sure if 500sqft is worth $1350 rent in New West.

It's the newest building there (Trapp + Holbrook)

What do you guys think?