Category Archives: Realtors

The New Foreign Buyer Tax – Unintended Consequences?

Sep
23
2016

vancouver-false-creek-mountains

 

Controversy continues to surround the August 2 introduction of a tax that increases the cost to foreign nationals buying real estate in the Lower Mainland of BC.

Most recently is the launch of a class-action lawsuit based on numerous grounds including the breach of 32 international treaties. If (as under the North American Free Trade Agreement, or NAFTA) Canada, the United States and Mexico have agreed for the free movement of certain professionals and skilled workers between their respective countries, the question being raised is how legislation can treat these workers differently than citizens of the country in which they are working.

A class action is a long and protracted process but is usually launched after a rigorous legal review as law firms leading a class-action suit usually only make money if the suit is successful. And, being lawyers, they tend to be a bit risk-averse. So although, I am not a litigation lawyer, I suspect there are some compelling arguments as to the legality of the tax.

But aside from this, what are the issues raised by the new tax?

The Big Problem

First and foremost was the failure to grandfather existing contracts. The concept of “grandfathering” means that existing contracts would not have been affected by the tax; only ones entered into after the announcement. The polls clearly indicate that most people support a tax on foreign buyers as there is consensus that foreign buyers represent one of a multitude of factors that impact the cost of real estate.

The problem with polls is they often don’t delve deeply into the issue. The media has provided information on a multitude of circumstances where an individual, couple or family are being significantly impacted. As a result there is a growing recognition that the failure to grandfather is patently unfair and many have commented that it is just not the way Canadians should treat people. The tax does, however, raise a bunch of money quickly to back government announcements about funding affordable housing initiatives.

And who are these “people” who are being impacted? There certainly are foreign buyers who want to just park their money in a safe haven – and, as we all know, many of these are from China and their situation tends to dominate our local media.

The Other Key Flaw

But there is another group affected, and this group raises what I believe is the second major flaw in the legislation. British Columbia reaches out to the world to encourage professional and skilled workers to come to the Lower Mainland. They may come from anywhere in the world, including China. These are cancer researchers, educators, computer programmers, consultants and a myriad of other individuals that we are asking to come here and help build centers of excellence or manage and work on projects where we simply do not have sufficiently trained individuals.

Why would we on the one hand ask them to come here and on the other hand penalize them? If they are paying taxes, engaged in our communities and raising their families surely they should be exempted from the tax. Perhaps the simple solution is to exempt those with work permits for at least two years.

As with all things, this too shall pass. It is just unfortunate that the government failed to empathize with those who had existing contracts. Finding an extra $150,000 where a buyer had already entered into a contract is a challenge. Most buyers usually stretch to the limit of their financial resources. So stay tuned for even more sad stories where buyers are sued for failing to complete their purchases.

Source – http://www.rew.ca

My new Promotional Video

Oct
27
2015

One of the reasons that I became a Realtor is because I love meeting and helping people with what will probably be the biggest transaction of their lives – buying or selling their home. Your listing will leverage my managed social media promotion, where I rank as the #1 Metro Vancouver Realtor for social media interaction and usually within the top 10 for Canada wide Realtors – as well as being accessible and promoted via this website, my brokerage website, MLS public sites and my location specific or building specific websites.

I look forward to sharing a cup of coffee with you, a chat about your property and to working with you soon!

10-Step Guide to Buying a House

Jul
30
2014

1. Are You Ready to Become a Homeowner?
Whether you’re becoming a homeowner for the first time or you’re a repeat buyer, buying a house is a financial and emotional decision that requires the experience and support of a team of reliable professionals. Read More>

2. Get a REALTOR®
In the maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more. Those professionals are the local REALTORS® who serve your area. Read More>

3. Get a Mortgage Pre-approval
Most first-time buyers need to finance their home purchase, and a consultation with a mortgage lender is a crucial step in the process. Find out how much you can afford before you begin your home search. Read More>

4. Look at Homes
A quick search on realtor.com® will bring up thousands of homes for sale. Educating yourself on your local market and working with an experienced REALTOR® can help you narrow your priorities and make an informed decision about which home to choose. Read More>

5. Choose a Home
While no one can know for sure what will happen to housing values, if you choose to buy a home that meets your needs and priorities, you’ll be happy living in it for years to come. Read More>

6. Get Funding
The cost of financing your home purchase is usually greater than the price of the home itself (after interest, closing costs and taxes are added). Get as much information as possible regarding your mortgage options and other costs. Read More>

7. Make an Offer
While much attention is paid to the asking price of a home, a proposal to buy includes both the price and terms. In some cases, terms can represent thousands of dollars in additional value – or additional costs – for buyers. Read More>

8. Get Insurance
No sensible car owner would drive without insurance, so it figures that no homeowner should be without insurance, either. Real estate insurance protects owners in the event of catastrophe. If something goes wrong, insurance can be the bargain of a lifetime. Read More>

9. Closing
The closing process, which in different parts of the country is also known as “settlement” or “escrow”, is increasingly computerized and automated. In practice, closings bring together a variety of parties who are part of the real estate transaction. Read More>

10. What’s Next?
You’ve done it. You’ve looked at properties, made an offer, obtained financing and gone to closing. The home is yours. Is there any more to the home buying process? Whether you’re a first-time buyer or a repeat buyer, you’ll want to take several more steps. Read More>

 

 

 

Whilst the above article is geared primarily for the US market, most of the tips/links would relate to the Canadian market. Source is Realtor.com with the “Read More” links landing at the corresponding Realtor.com webpage.