I wonder what the cost is to acquire a company incorporated in Canada and if the new tax takes those kinds of shenanigans into account. Here in California, buying a company that owns property is much cheaper in Prop 13 terms than buying property.
Canadian corporations have to have a certain % of the board as Canadian residents so I don't think we'll be seeing too much of that sort of fraud. At the same time this tax seems like a band aid solution taking the politically easy solution of blaming foreigners rather than looking at the structural problems of low interest rates combined with government regulations and groups preventing the construction of new housing.
I haven't been to Vancouver too often but I know here in Toronto you can get into the downtown core and still see rows of single family homes . . . which doesn't make much sense for a city this size. The city core has gone towards building expensive million dollar homes rather than high rises that could support many many families.
Actually, I think the rules are more flexible than requiring Canadian residency. You've a different tax requirement if you're not Canadian-controlled, though. And they do, I think, tax heavily on investment income in businesses, but not so much land if it's required for the business.
It's certainly an interesting idea. Might depend on which jurisdiction you've incorporated under, whether provincial or federal....
Probably negligible, in comparison to paying the 15% tax. There's always a loophole. Incorporating a Canadian company is easy enough, especially given most properties tend to already be held through SPVs. In most countries you have to pay local capital gains tax on properties anyway.
To combat holding properties through companies, one would have to look at the ultimate beneficial owner of a corporation, which can often be hard to do / verify.
I grew up in West Vancouver and there are countless neighborhoods and streets with empty million dollar houses. I remember they would go on sale and within a few days they'd be off the market, sold $30,000 - $100,000 above asking price. This has driven up prices to ridiculous heights. The average salary in Vancouver for a Software Engineer is around 75K, yet the price for a detached single family home is around $1,500,000. I don't think there is anyway for a single working family to afford a single detached house anywhere in Metro Vancouver area. This was long overdue
It won't. This tax is ultimately unenforceable since it would be trivial to put down a family member as living at your vacant house. All they would have to do is collect mail there and it would be virtually impossible to prove otherwise.
Not true. It's fairly trivial to see if someone is living in a specific location. A simple bank statement shows where you've been spending money and tends to be good indicator of whether you're in Vancouver or not.
Canadian government already has a program like this in place for recent immigrants to ensure that they actually reside in Canada during their permanent residency period. Over the past fews years many people immigrated to Canada and left after landing to become 'convenient Canadians' five years later. Canada already knows how to do this.
> The province will also allow the City of Vancouver to impose an annual vacancy tax on some residential properties that are left uninhabited.
That seems like a great idea. Just throwing out an idea that could be terrible, why not tax all people who don't personally live in their home? That would effectively be a discount for people who want to buy and live in their own home, while discouraging people from buying multiple properties they don't need for their survival and collecting rent.