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BC foreign buyer tax
- Thread starter nobbie48
- Start date
I'm just being general here, but in the current market you need to put down around 30% to scratch into positive cash-flow. It's certainly enticing if you're bullish on the market, but if you're expecting a downturn I don't see how it would make sense unless you want to speculate on bottom.
Depends on area. Some areas haven't appreciated like others. Will get there soon as the other areas become unaffordable.
If you're looking at anything over a 3plex there's rules that got brought in a few years ago that you need 30% down and it's now a commercial mortgage if I'm not mistaken. When we bought our place it was before the double land transfer tax, and before the change from 6-plex to 3-plex so we got residential. So long as we keep renewing we're ok...can't refinance due to these rules now. Anyway it's a great investment if you get in a good area, and I personally recommend it.
Issue is always betting on WHERE that next area will be. I guess following infrastructure/transit expansion routes is always a good bet.
How do your financials work out? All I see in Toronto are triplex listings at $1-1.25M that bring in $3000-3500/mo in rental income. I'm not motivated enough to bust out a calculator but I'm fairly sure you'd need $400,000k down to make that a barely-cash-flow positive venture?
That's the issue it doesn't work with a 3-plex. Friend of mine bought a 3-plex when it was reasonable for around 650k or so....made sense then with a 10-15% down. Buying a 3-plex now isn't that much cheaper than buying a 6-plex so you're better off going with a larger amount of units to increase the spread of purchase price/unit. The place we have was just an awesome buy before the insanity that took off in Mimico so I'm very happy with the decision, and wouldn't be able to afford it now. Technically if the market tanked 30% or more...I wouldn't be too worried.
OR...
Take a monthly cash flow loss and offset the earnings from your other high tax rate income while your equity builds.
If the average canadian bacon didn't work almost 1000hrs/year to cover his tax burden maybe he could take his extra money to one of those impoverished slum countries and buy the slums right out from underneath the slum dwellers. Would their governments allow that? Don't borders mean anything anymore?
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This foreign buyers tax is really interesting as it appeals to both sides of the political spectrum for different reasons ("keep furriners out" and "make housing more affordable") but the effects of the tax aren't really known. It definitely resembles the scale of changes that have triggered bubbles to burst in the past, and it may yet have that effect accross Canada. The sharp decline in sales combined with unabated increases in price is also a typical warning sign.
I've never expected any imminent crash in prices that people have been forecasting for... a decade now? But if it's going to happen, it'll start in the next 6 months or so IMO.
I've never expected any imminent crash in prices that people have been forecasting for... a decade now? But if it's going to happen, it'll start in the next 6 months or so IMO.
I dont see the tax doing much, except a windfall for the Gov't and a possible tighter market for the sellors that have been seeing Christmas with every for sale sign.
In areas where the foreign buyers want to be they are setting records of 250-300k over ask on a 1 mil property. They have so much money to bury I dont see a 15% tax being a deterent, just an inconvenience to them.
In areas where the foreign buyers want to be they are setting records of 250-300k over ask on a 1 mil property. They have so much money to bury I dont see a 15% tax being a deterent, just an inconvenience to them.
I don't see it as a cash grab, I really think their intention was to cool the market.. and for the time being, it has the desired effect.
As usual nobody wants to address the elephant in the room. Nevermind the 15% tax, how about severely restricting outsiders purchasing property to the ultimate detriment of average Canadian citizens. Why not just flood the labour market with dirt cheap outside labour? It's the same thing.
I believe 10% of sales in Vancouver were to foreign buyers. When you're selling your $2M shack, 90% of the potential buyers are locals. It's kind of funny that the tax has cooled the market so quickly. Even if it was totally effective in eliminating all foreign investors, it still leaves 9/10 buyers in place.
Wow. 1.3 for a two bedroom bungalow:
https://www.realtor.ca/Residential/...CRES-Toronto-Ontario-M6S3P5-High-Park-Swansea
https://www.realtor.ca/Residential/...CRES-Toronto-Ontario-M6S3P5-High-Park-Swansea
80% chance whoever buys it tears it down to build a McMansion.
More like a 100% of that happening. Nice lot, strictly geared for a developer. I am curious though how they can buy for that price, put in 200-300k into it, and STILL make a profit! Craziness!
Should've become a realtor
More like a 100% of that happening. Nice lot, strictly geared for a developer. I am curious though how they can buy for that price, put in 200-300k into it, and STILL make a profit! Craziness!
Should've become a realtor
There was a real estate agent/developer actually doing that 10-15 years ago, but buying them for much, much less. This is one of the holdouts I guess. We'll see how much it paid off.
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Young guy near my street bought a house for ~700k or so a few years ago...waited for basement tenants to move out, put a stupid amount of money into it. New everything inside. Literally gutted it, added to it, and made it a fantastic house. Sold it for 1.4M (200k over asking within 2 days of listing) about 1.5 years later. I talked with him a few times and turns out he's the realtor and contractor with his own crews to do all the work. Has 2 more houses in the area at the moment that he's building/flipping. Lives in it with the family and no capital gains as far as I know on those...I took a wrong turn in life somewhere LoL
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