[jpollock]

The last paragraph indicates the precise problem with this policy - it isn't adhering to the terms of the free trade agreements that Canada has signed - both NAFTA and the "China Foreign Investment Promotion and Protection Agreement" require that offshore investors be treated the same as onshore.

The CFIPPA [1] is clear on the subject:

1. Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the expansion, management, conduct, operation and sale or other disposition of investments in its territory.

Perhaps the claim is that the initial purchase of the asset is what's being taxed, which might be seen as exempt?

[1] http://www.international.gc.ca/trade-agreements-accords-comm...

[pesfandiar]

I don't know much about the legal aspects of international agreements like that, but is real estate considered an investment vehicle like e.g. bonds and stocks? You'd think there should be some exceptions, since real estate is enabling local communities, and you know, provides shelter for people to live in.

[skylan_q]

Vancouver is tight and they aren't building/aren't allowing more building in the immediate area. Housing is for people to live in, but far too many have been speculating.

[EnFinlay]

There is a lot of building happening in Vancouver right now, mainly housing blocks being turned into high rises.

[hackerboos]

I would expect China not to pursue damages considering that the Chinese residents laundering money in Canada are breaking China's capital controls in the process.

[jpollock]

Americans tend to be more litigious, and NAFTA is even more clear than the Chinese agreement [1], mentioning establishment and acquisition of investments.

1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.

2. Each Party shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.

Canada has carved out some exemptions, specifically around ocean front property [2], probably intended for the control of ports.

[1] http://www.international.gc.ca/trade-agreements-accords-comm...

[2] http://www.sice.oas.org/trade/nafta/anx2cda.asp

[SmellTheGlove]

Forgive me because I don't know how to blockquote here, this is the definition of "investment" from the agreement you linked:

    1. “investment” means:
    (a) an enterprise;
    (b) shares, stocks and other forms of equity     participation in an enterprise;
    (c) bonds, debentures, and other debt instruments of an enterprise;
   (d) a loan to an enterprise
    (i) where the enterprise is an affiliate of the investor, or
    (ii) where the original maturity of the loan is at least three years;
    (e) notwithstanding sub-paragraphs (c) and (d) above, a loan to or debt security issued by a financial institution is an investment only where the loan or debt security is treated as regulatory capital by the Contracting Party in whose territory the financial institution is located;
    (f) an interest in an enterprise that entitles the owner to share in the income or profits of the enterprise;
    (g) an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution;
    (h) interests arising from the commitment of capital or other resources in the territory of a Contracting Party to economic activity in such territory, such as under
    (i) contracts involving the presence of an investor’s property in the territory of the Contracting Party, including turnkey or construction contracts, or concessions to search for and extract oil and other natural resources, or
    (ii) contracts where remuneration depends substantially on the production, revenue or profits of an enterprise;
    (i) intellectual property rights; and
    (j) any other tangible or intangible, moveable or immovable, property and related property rights acquired or used for business purposes;

    but “investment” does not mean:

    (k) claims to money that arise solely from
    (i) commercial contracts for the sale of goods or services, or
    (ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by sub-paragraph (d); or
    (l) any other claims to money,

    that do not involve the kinds of interests set out in sub-paragraphs (a) to (j);

I'm not an expert on Canadian law, but in the US at least, that definition does not appear to me as though it would cover real property. Property itself refers to chattel, and real property would need to be expressly included. So I'm not sure that they have a problem, as real property doesn't fall under the ordinary definition of an investment, and it's not encompassed in the agreement definition of investment above.

Disclaimer: I'm not your lawyer. I know nothing about Canadian law. I am a dog pretending to be a lawyer on the internet.

[telotortium]

First, please don't use fixed-width font to quote -- it makes users have to scroll horizontally to see it all.

Second, I'm not a lawyer either, but it seems as a Canadian property investor, you could make your case with several items in the above list:

(f) an interest in an enterprise that entitles the owner to share in the income or profits of the enterprise;

(g) an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution;

Both of those items might be satisfied by having a shell corporation buy the property for the human buyer, who's invested the necessary funds in the corporation.

Furthermore, I don't see how your objection about "property" unqualified referring to chattel could withstand this, which is probably very easy to argue for as long as the buyer rents out the property:

(j) any other tangible or intangible, moveable or immovable, property and related property rights acquired or used for business purposes;

[SmellTheGlove]

I cut and pasted from the reg and used 4 spaces on each line to indent. Let me know if there's a better way.

You're right that you could use (f) and (g) to sidestep, but an interest in an enterprise is something resembling equity. So yeah, set up a domestic shell corp, capitalize it, put your real estate in it, and that's probably good to go - I'm generalizing, but you're right. But being able to structure around a particular tax is not the same as the particular tax not applying or not existing. If for whatever Canadian legal reasons liability pierces the entity and goes back to the principals, you have a tax problem. I'm sure there are ways to structure around that as well, but again, I'm way out of my element on Canadian law.

As for (j) that's going to depend on whether Canadian law interprets "immovable property" as real property or not, and then what constitutes business purposes. I'll venture a guess that if a foreigner buys a home, assuming immovable property = real property for (j), and rents it out at market rates at arms length, that's okay. Buying it so their kids can live in it, or "renting" it to relatives or anything other than market rate and arms-length is probably less okay.

I also don't know enough about Canadian jurisprudence and the propensity to enforce the spirit of a law rather than the black letter. So basically I'm a dog pretending to be a Canadian lawyer on the internet. But those are the issues to me. It's certainly arguable from both positions.

[telotortium]

As far as quoting, I'd do one of these:

- Prefix each line with ">".

- Surround the quotation with triple quotes, like Python:

"""

My long quotation

"""