
Ontario slaps 15% tax on foreign buyers - bitmedley
http://business.financialpost.com/personal-finance/mortgages-real-estate/ontario-slaps-15-tax-on-foreign-buyers-expands-rent-control-in-16-point-plan-to-cool-housing
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chollida1
And at the same time some of our banks are exploring the sale of uninsured,
sub prime residential mortgages.

[http://business.financialpost.com/news/fp-street/rbc-
explori...](http://business.financialpost.com/news/fp-street/rbc-exploring-
sale-of-bonds-backed-by-uninsured-residential-mortgages)

The Canadian housing mantra was always we're different from the US because:

\- you can't walk away from your mortgage like you can in the US

\- Our banks hold onto the mortgages they write, especially the sub prime ones
as they can't liquidate them so the banks are more careful about handing out
these types of mortgages.

\- most of our mortgages that are written are backed by the government

\- due to not having a vast secondary market for mortgages and derivative
products, we don't write that many sub prime mortgages.

This was all true around 2008, now, it's debatable but IMHO only point one is
correct any more.

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boona
I've had conversations with local builders, and it seems that since the early
90s the soft costs (i.e. costs related to regulation, zoning, inspections,
etc) related to building new homes in much of Ontario have increased from
approximately 20% of total cost, to around 50% of the cost. Meaning that half
of the cost of purchasing a new home goes straight to the government. It's
true that some of those costs are unavoidable, but if politicians were serious
about reducing costs, they would reduce that overhead.

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canada_dry
Here's a great example of Toronto's out-of-whack real-estate prices...

[http://www.360homephoto.com/e74105/](http://www.360homephoto.com/e74105/)

This 1 1/2 story on just a 40' wide lot is being sold AS-IS for $1.5M. A
decade ago this house could be had for around $300,000.

It will likely be purchased by a foreign buyer - like many properties in the
area - and replaced with a $3M home which will likely sit empty as purely an
investment for a Chinese buyer.

~~~
52-6F-62
It's such a nice little house, too. It's absolutely crazy. For a city with
average wages in the $50-70k range, owning a home may as well be prohibited.

I rent an apartment, I'm on my second one with the same property management
company. I've never met the people who own the place. They might not live
here. We got along well with our former property manager/landlord, but she
moved on in the company and we have never seen the face of the person we pay
rent to.

It's a one bedroom condo that we pay $1650 a month for, in a neighbourhood
where units of this size don't go for under less than $300,000 -- likely more.
Some days it feels like a trap.

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RandyRanderson
This is likely just for show - just as a similar law was in BC.

You can become a landed immigrant if you invest[0] a few hundred thousand in
canada and, in that case, you're likely not a 'foreign' buyer (FB) anymore. If
you're buying a 1.5M home, what's another couple hundred thousand?

Also there are numerous other ways to get around being a FB:

1 investing in a company with a canadian. The company buys the property and
because it's 'canadian controlled' the 15pc doesn't apply. The canadian in the
deal likely gets an envelope of cash to keep their mouth shut. Usually the
canadian is a chinese national that took advantage of #2.

2 Quebec used to have a deal where you 'invested' something like 250k and you
got a canadian citizenship. This is not avail anymore. Of course no one
actually moved to QC, they went straight to BC because weather.

Canada is going to be in real trouble if the Chinese money stops flowing; at
this point i'd guess real estate is 40-50pc of our economy.

[0] Note that 'investing' in not what you think it is - there's loopholes
there too.

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pm24601
Interesting that rent control is also in the mix.

