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Chinese investors avoid taxes through Canadian real estate

Riverdale Rink Rat

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I'm confident that you are an honorable person.

Given the rest of your post, you probably should have used the 'sarcasm font' for that lead.

Both of my statements have support, and I appreciate your questions:
As Vancouver home prices surge out of reach, businesses worry how to retain staff
See 'Locating Risk of Homeslessness on the Housing Continuum' part of this paper

I don't actually expect you to read any of this, or even agree with it, given your opinion that homelessness is an "intractable" problem. It is regrettable that your imagination is so lacking - and let's not overburden this discussion with concepts like 'empathy' or 'compassion', for your sake.

I live in Barbados. I am confronted with homelessness and inadequate housing every day, and I am both empathetic and constructive in dealing with it when I can. My imagination, though, does not run to buying million dollar homes and giving them to Eastside addicts. I don't think that's going to help hardcore homeless -- they need a lot more help to transition, and the problem is very, very difficult -- IMO, I believe it is intractable -- as it involves people who are too far along into self-harm to be helped, at least in some cases. If you figure out how to wave a magic wand and have that work, I'll contribute to the SFH million-dollar Vancouver home purchase. It doesn't work that way, as you well know. Heck, you can read Malcolm Gladwell on that one, much less SFU Geography studies from 2006 published by York U's School of Social Work.

Yeah... let's not overburden ourselves.

Interestingly, your other link to the NatPost article had -- buried wwwaaayyy down at the end -- a couple of numbers that were, gasp(!), monthly rentals. And they were... reasonable, at least to these Toronto eyes. So, maybe, the idea of counselling that transfer from Regina to, y'know, sell their house in SK and rent in BC is... not unreasonable? As I said, I'll be renting when I get back to Toronto. If I was going to Vancouver, I'd do the same. The angst about having to own your primary residence or being 'priced out of the market' would be completely foreign to Germans, for example. Why should we Canadians need to be so freaked out about it? Why do we need to 'burden ourselves' with this goal?

Do they really benefit from someone buying a home for millions outright, (misleadingly) declaring a poverty wage so they don't have to pay taxes, yet still benefiting from the social services that all Canadians pay into? At the same time raising property values and cost of living that makes housing less affordable and businesses less competitive?

Yes, they do. Because that 'not paying taxes' student for whom the house was purchased is paying $26k for her science degree at UBC (instead of $5k) as an international student, and will be paying for private health insurance. The house is paying its property taxes. So... she's paying for her education, her health, and her sewer system. She is not Canadian, and she's not paying for our military or foreign affairs or what have you. Seems... about right?

I like your horse example. Goes particularly well with the straw you seem to have in abundance.

I was arguing that the purchase of pricey homes in Vancouver by international money was a net benefit to Canada, as the article was about the fact that it was a scandal, to which I disagreed. You changed the argument to one about homelessness, and possibly 'hidden homelessness of recent immigrants' because you disagreed with my assertion that the high price of SDH in Vancouver does not affect homelessness. And YOU accuse ME of a strawman argument? Hahahaha...


And I'll just re-quote: I'm sorry, but I think that your reaction to this story and thread speak more about you than the actual 'story'. LOL right back atcha...
 

wild goose chase

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Why is this trend so much more noticeable in Canada than the US (or does it just seem that way)? There are way more large cities in the US, but one notices Vancouver and Toronto as the hotspot for this kind of investment.
 

Migos

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Easier to escape immigration laws, tax laws, money laundering laws, etc. in Canada than the U.S.
 

wild goose chase

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USA is a leader in prosecuting white collar crime. Canada's has a terrible record

I didn't realize this was the case. Sometimes you hear about how the US should be doing more to crack down on market manipulation (eg. some people talk about how Iceland was more willing to go out of its way to jail corrupt bankers).

For some reason, I got the impression that Canadian society in some regards has its policies less swayed or "bought" by the extremely wealthy (eg. look at campaign contribution laws for elections, for instance) but maybe it's not so much in the realm of real estate.
 

Shiny

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There also Chinese like me who had little space to buy bigger place, and could not believe how much tax we have to pay, and how poorly the new condo unit condition (ICE Condo II) could be.
 

algotr8der

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These Chinese would fail a *residency* test. Having a child or spouse living in Canada makes you a Canadian resident for tax purposes. As such, anyone who does not file an income tax return with the CRA and fails to show *ALL* income is breaking the law.
 

Migos

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‘Suspicious transactions’ reported by B.C. banks tied mostly to China
http://www.theglobeandmail.com/news...c-banks-tied-mostly-to-china/article27640202/

Vancouver-area banks reported suspicious transactions involving Mainland Chinese clients 17 times more often than those tied to citizens of any other outside country in recent years.

A Globe investigation this fall showed how local banks helped wealthy East Asian investors circumvent China’s banking laws to bring capital into British Columbia. Chinese citizens cannot legally transfer more than $50,000 (U.S.) a year out of China without government permission.

The Globe investigation found many wealthy investors get around that by having family and friends send millions of dollars in wire transactions to banks in Metro Vancouver. Real estate agents who specialize in luxury housing have told The Globe that many of their clients get the money they use to buy homes in Canada through these transactions.

Even when Canadian police are made aware of possible money laundering activity, they do not have the funding to undertake many high-level cases, according to financial crimes specialist and former RCMP investigator Kim Marsh.

“There’s no accountability, there’s no deterrence,” said Mr. Marsh, who is based in Vancouver and has worked with Chinese institutions to recover laundered assets. “If you’re talking about Chinese nationals buying property here, you can’t tie it to a crime because you don’t know what happened back in China and how they got the money,” he said.
 

James

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One major concern of mine is the sustainability of these mega investments. These investments increase in value so long as there are other investors in the future who are willing to pay a premium for them. How long can this be sustained before the pool of future investors either diminishes or decide that there are better investments elsewhere?
 

Riverdale Rink Rat

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One major concern of mine is the sustainability of these mega investments. These investments increase in value so long as there are other investors in the future who are willing to pay a premium for them. How long can this be sustained before the pool of future investors either diminishes or decide that there are better investments elsewhere?

Well, we're about to find out in the energy and commodity companies' high yield bond market. And, it looks like the answer is the usual: the investments can't be sustained almost immediately when the hot money goes elsewhere.

One of the more interesting things about the high-end RE comeuppance to come (and I guess this is more for the 'bubble' thread) will be the stories about the panic once the market goes into freefall. So, bad when it goes up, bad when it goes down, rinse, repeat.
 

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