Databases Fail - as 15% foreign owned tax causes panic in Real Estate (1 Viewer)

Rx_

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About politics, about databases crashing (perhaps billions of dollars at stake), about building a type of wall to keep out foreigners, ...
This might be a trend for both UK and US.

http://business.financialpost.com/p...lapsing#188_1514005794_23035_-1_1470241353093

Canada's response to foreign invasion, build a "tax wall". This completely crashed the database systems. If you have not been watching the backlash of China citizens buying up all the real estate in Vancouver B.C. and the backlash that some consider racial, this is a great story to catch up.
There are always two sides to a story.
But, the citizens from this area are beyond concerned. A 15% tax suddenly appeared.


Realtors and lawyers desperate to complete before the deadline filed a record-setting 15,000 property transfer applications on Thursday and Friday, the last business days before B.C.’s punishing new 15-per-cent tax on foreign property buyers went into effect.
More than 9,200 transactions were filed on Friday, breaking the 2007-2008 record of more than 8,400 in a single day, according to the B.C. Land Title and Survey Authority. It also reported over 5,800 transactions on Thursday, representing nearly as many deals registered at month’s end in April.
The demand was so heavy that it crashed the land titles office’s electronic filing service on both days, the authority said.
 

CJ_London

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The UK recently introduced a 3% stamp duty levy (on top of existing rates) on house purchases for any purchase which was not going to be the buyers principal private residence - evidenced by sale of their existing principle private residence, perhaps other things as well.

If you are buying before you sell, the duty is paid but can be reclaimed when said evidence is available, think there is a time limit of 12 months.

Intention is more to deter buy to let/holiday home purchasers. Not sure if it is having any real effect
 

Lightwave

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In the UK investors pushing up property prices for first time buyers is a real problem.

I personally would wack up capital gains tax on land and buildings. I have no problem with people investing in property but just simply blackmailing tennants and waiting for capital appreciation I think restricts people from being more imaginative with property and really making the land work.

Hi rates of Capital Gains I think recognises that property is within a country and whatever is done to the land part of its values comes from the legal stability of the country and the neighbours. It wouldn't appear to me to penalise new buyers. Any increase in its value is a measure of good stewardship of the whole country therefore if values increase I think there is a good argument that the country deserves a significant amount of that increase. I would allow deductions for capital investment at 100%

Never going to happen but its a suggestion
 

CJ_London

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Any increase in its value is a measure of good stewardship of the whole country
not any increase - increase can happen as a result of supply and demand - one of the reasons London prices are so high compared with the rest of the country - and why the increase in demand? because that is where the jobs are. Is that good stewardship to concentrate jobs in one region? I appreciate the government has initiatives in place to create or expand on work opportunities elsewhere, but those policies take time to implement and take effect.

Developers and landlords/2nd homers pay stamp duty on purchase and tax on profits (both rent and capital gains). Individuals pay stamp duty, but nothing on gains. Are you suggesting that (own) home owners should also pay capital gains tax on the increase in the value of their property? I would think that would pretty much stop anyone from moving ever again! And if they did, prices would inflate even further to cover the tax and leave enough to buy the next one.
 

Rx_

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Welcome to the road to serfdom. We are all on the road together.
Its not really supply and demand of real-estate as it is the Money Supply available to those with income brackets above ours. The Money Supply is increasing for all of our countries. It is the 1% and their close buddies that control the money supply and promote the national debt so they can personally profit.
Like some religion, they print "wealth" out of thin-air and buy what we labored and saved to own.
Its called Currency Wars. Currency Wars create misallocation of resources. Through history, it creates class strife and leads to actual wars between countries. This situation is a replay of World War I (one).
A foreign country print more paper debt (e.g. fiat money) and rush to another country to finance real-estate before the other countries realize the currency is debased. Of course, all the other countries are doing the same.
They are bidding up the prices to put the money into anything except banks that will all be paying negative interest.
Then of course, each countries blame other countries for doing exactly what they are doing.
:D Please, please don't ask me what I really think! (unless of course we have a lot of beer to drink!)
 

Lightwave

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CJ - My observation of CGT suggests that it depresses house prices.

For instance one of the primary drivers to the introduction of CGT in the UK was the rapid growth in property values post World War II. This led to property developers deliberately leaving office blocks empty so that a rental income could not be established and greater capital gains made. The capital gains tax system was therefore introduced by chancellor James Callaghan in 1965.

Germany has much stricter property regulation with very strong rights for tenants. Rather than see property prices rise it has seen property prices fall. CGT exemption is only 800 Euros a year and I think there is only exemption on gains if you have lived in a property for more than 10.

Compare that with Hong Kong which has no CGT or even London where principal properties are exempt and you get something like 10k exemption in a single year.

Don't get me wrong I have several properties and I have made good money out of property but I can see that its a real problem for the next generation. I would have preferred to put money into real business rather than property but property has been too reliable to ignore.

I am not in favour of stamp duty taxes as this truly is a tax on trading. I think we need to subdue housing inflation and increase number of trades to allow workforce mobility and investment which results in improvement to be rewarded while simply sitting on property should not garner disproportionate gains. Hence allow for true development to be tax deductable but not land banking
 
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Rx_

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Just a follow up to 3 weeks ago FYI:
Three weeks ago, when we looked at the long-overdue sudden change in the Vancouver housing market, long a receptacle for Chinese hot and laundered money, we found that as a result of the implementation of the 15% property tax implemented by British Columbia (something we recommended over a month earlier), that the Vancouver housing bubble has burst.


We concluded this based on anecdotal evidence by local real estate professionals: "As a new dawn breaks in Metro Vancouver's real estate market, realty companies and real estate boards are reporting the first anecdotes of deals falling through as foreign buyers forfeited deposits on binding deals rather than pay the new tax. Worse, if only for the unprecedented local housing bubble, and certainly better for potential local homeowners who were locked out from the massively overpriced market, they report evidence of local buyers withdrawing offers in expectation that the market will soften."


Less than a month later, there is also hard evidence to confirm this assessment. According to Global News, evidence from realtors and MLS data is showing the Vancouver real estate market is in the midst of a major slow down, with prices dropping and sales plummeting.
. According to realtor Brent Eilers, using MLS listing data, there were only three home sales in West Vancouver between Aug. 1 and 14 this year, compared to 52 during the same period last year. That's a decrease of 94%.
 

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