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Vancouver Off-Topic / Current EventsThe off-topic forum for Vancouver, funnies, non-auto centered discussions, WORK SAFE. While the rules are more relaxed here, there are still rules. Please refer to sticky thread in this forum.
better question is how the hell can they bring that much cash in such short amount of time when there's these "supposed" limits on how much they could bring out of china or in to Canada
but it can't be the only way... other than having 10,000 friends and family to transfer the money to them...
anything and everything can be done in this world.
4 million dollars is really nothing to bring into a country. there are loopholes to everything, or you just don't get caught doing it,
you can take a look at the drug market in the states for example. millions of kilos make there way into the states illegally and billions of dollars leave illegally. how is it possible? it just does
If I buy a stock and make a profit I have to pay tax on 50% of my gain (excluding RRSP TFSA here). If I work a regular job I have to pay taxes according to my marginal tax rate not to mention all other other deductions like CPP and EI government takes. So why is it this guy who have lived at this residence for less than 5 years can potentially net over $1,000,000+ not have pay a dime on this profit? The current system of principal residence exemption needs to be abolished once for all. This should guy be paying taxes on at least half of his capital gain just like if I a buy a stock since he never had the intention of living their permanently.
like kr4l said, it is because he took a risk. there is little to stop you from buying a place, living there, pay someone to renovate / reconstruct, etc. and take potential gains tax free.
the problem is, if he is $2M into a project, he could sell for $3M or equally the market could crash and he's sitting on $1M, losing $1M. when you go to work everyday, there's no chance of it costing you money (well, opportunity cost, perhaps).
but beyond that, you're point is bang on, the idea of the capital gains exemption is that houses are meant to be homes, not investments. he's clearly skirting the spirit of this tax break, and one could definitely argue that something should be done about it.
i do not know the specifics of that tax law, but have a rough knowledge that there's a limit to how many homes in a certain time period you can claim as a principal residence.
vancouver's property market is basically the wild west of capitalism. 2008 financial crisis was caused by the same shenanigans and greed. i couldn't careless tbh, in fact welcome so i pay less property tax, if home prices drop 30+% in this city to bring it to a more normal level and drive out all the spectators.
to point of about this builder did not violate any laws. Hitler did not break any international laws by starting WWII. the Nuremberg trial was to advance the international law making an hostile invasion of another country illegal; however, Hitler did not break any law so maybe he shouldn't have committed suicide. most of the time laws are lagging behind societal and economic events.
Last edited by Carl Johnson; 02-08-2016 at 10:51 AM.
Problem is, the Chinese are coming in and buying with cash. Only poor people like us would need a mortgage.
It could possibly be an excellent investment. "What if" next year it can sell for $4 million? That's a million in one year, way more than what that guy is pocketing.
It sure beats buying that 100 year old shack in Vancouver a few pages back for like 2.5 million.
I'm sure it is for them. If I were laundering dirty money, I wouldn't give a shit either. Even if the market craters by 50%, losing half is better than losing everything.
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organized crime love the Vancouver Housing market too...i wonder how many of these realtors get fronted 2 million dollars to cash 3.1 million on flipping houses than take a cut of 100 grand,launder the 3 million back of "Clean" money back to international Countries. ...Bet you the government doesn't think of these things cause the Tax is Already covering them
vancouver's property market is basically the wild west of capitalism. 2008 financial crisis was caused by the same shenanigans and greed. i couldn't careless tbh, in fact welcome so i pay less property tax, if home prices drop 30+% in this city to bring it to a more normal level and drive out all the spectators.
to point of about this builder did not violate any laws. Hitler did not break any international laws by starting WWII . the Nuremberg trial was to advance the international law making an hostile invasion of another country illegal; however, Hitler did not break any law so maybe he shouldn't have committed suicide. most of the time laws are lagging behind societal and economic events.
Godwin's Law. SMFH at the bolded statement are you fucking serious?
Did Vancouver developers just get tossed into the same group as Hitler?
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Quote:
Originally Posted by 4444
like kr4l
i do not know the specifics of that tax law, but have a rough knowledge that there's a limit to how many homes in a certain time period you can claim as a principal residence.
heeey something I can chime in on... I think :P
"Only one property can be designated a principal residence in any given year"
ITA 40(2)(b) for the capital gain reduction formula
(b) where the taxpayer is an individual, the taxpayer’s gain for a taxation year from the disposition of a property that was the taxpayer’s principal residence at any time after the date (in this section referred to as the “acquisition date”) that is the later of December 31, 1971 and the day on which the taxpayer last acquired or reacquired it, as the case may be, is the amount determined by the formula
A - (A × B/C) - D
where
A
is the amount that would, if this Act were read without reference to this paragraph and subsections 110.6(19) and 110.6(21), be the taxpayer’s gain therefrom for the year,
B
is one plus the number of taxation years that end after the acquisition date for which the property was the taxpayer’s principal residence and during which the taxpayer was resident in Canada,
C
is the number of taxation years that end after the acquisition date during which the taxpayer owned the property whether jointly with another person or otherwise, and
D
is
(i) if the acquisition date is before February 23, 1994 and the taxpayer or the taxpayer’s spouse or common-law partner elected under subsection 110.6(19) in respect of the property or an interest, or for civil law a right, therein that was owned, immediately before the disposition, by the taxpayer, 4/3 of the lesser of
(A) the total of all amounts each of which is the taxable capital gain of the taxpayer or of their spouse or common-law partner that would have resulted from an election by the taxpayer or spouse or common-law partner under subsection 110.6(19) in respect of the property or the interest or right if
(I) this Act were read without reference to subsection 110.6(20), and
(II) the amount designated in the election were equal to the amount, if any, by which the fair market value of the property or the interest or right at the end of February 22, 1994 exceeds the amount determined by the formula
E – 1.1F
where
E
is the amount designated in the election that was made in respect of the property or the interest or right, and
F
is the fair market value of the property or the interest or right at the end of February 22, 1994, and
(B) the total of all amounts each of which is the taxable capital gain of the taxpayer or of their spouse or common-law partner that would have resulted from an election that was made under subsection 110.6(19) in respect of the property or the interest or right if the property were the principal residence of neither the taxpayer nor the spouse or common-law partner for each particular taxation year unless the property was designated, in a return of income for the taxation year that includes February 22, 1994 or for a preceding taxation year, to be the principal residence of either of them for the particular taxation year, and
This is a good Globe and Mail article about how some realtors
Use "assignment clauses" in sales contracts to sell houses and make tax free gains as the middlemen:
These builders with multiple homes aren't claiming residence there, they re buying properties wit holdings companies and then just paying the associated Business taxes no?
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These builders with multiple homes aren't claiming residence there, they re buying properties wit holdings companies and then just paying the associated Business taxes no?
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you can only use primary residence 1 per year per household (spouse and children under 18) they'll still have to pay taxes under a holding company... eventually?
Could be wrong but can they not defer the tax to the purchaser once the property is listed and sold?
I know that's a common practice for condos when a developer "buys" out abunch of units, he then defers the taxes onto the buyer when the property is sold. (Had this almost happen to me when I bought late last year)
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Quote:
[17-03, 09:23] Amuro Ray is it normal for my dick to have things growing on it?
Quote:
[15-05, 13:34] FastAnna You guise are like diet coke and I am the mentos
[15-05, 13:34] FastAnna Incredible. How easy it is.
Quote:
Originally Posted by murd0c
I'm scared of spiders... When I see one I toss my cats at it
Could be wrong but can they not defer the tax to the purchaser once the property is listed and sold?
I know that's a common practice for condos when a developer "buys" out abunch of units, he then defers the taxes onto the buyer when the property is sold. (Had this almost happen to me when I bought late last year)
forgive my ignorance on the subject, how did you find out? how did you work it out or turned down the deal?
thaks
you can only use primary residence 1 per year per household (spouse and children under 18) they'll still have to pay taxes under a holding company... eventually?
absolutely, holdco ownership of single family real estate is only good if income is earned in the holdco first (then used to buy said real estate).
I know builders who have 3+ homes going, lines of credits against their principle home maxed out, no cash on hand, don't pay contractors so they have liens against their properties. They basically wait for the 1st home to sell so they can pay the bills.
It's actually ridiculous to think some people have leveraged themselves to the point of no return if the RE market starts to tank.
An article in the globe and mail about how property transfers are avoiding taxation by assigning properties before the sale closes, and a few other things.
I know builders who have 3+ homes going, lines of credits against their principle home maxed out, no cash on hand, don't pay contractors so they have liens against their properties. They basically wait for the 1st home to sell so they can pay the bills.
It's actually ridiculous to think some people have leveraged themselves to the point of no return if the RE market starts to tank.
and many think this won't end badly, or isn't like the US.
though it may not be entirely the same, a similar level of complacency from buyers, to lenders, and even the government is blatantly apparent (to me, at least).
forgive my ignorance on the subject, how did you find out? how did you work it out or turned down the deal?
thaks
Had a smart realtor that knew to look into it. As my unit was still owned by the developer and had been a professional rental. We just put it in the contract that any taxes that would've been deferred he had to pay if he wanted to complete the sale.
Literally just an extra sentence (clause) in the contract.
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Quote:
[17-03, 09:23] Amuro Ray is it normal for my dick to have things growing on it?
Quote:
[15-05, 13:34] FastAnna You guise are like diet coke and I am the mentos
[15-05, 13:34] FastAnna Incredible. How easy it is.
Quote:
Originally Posted by murd0c
I'm scared of spiders... When I see one I toss my cats at it
I know builders who have 3+ homes going, lines of credits against their principle home maxed out, no cash on hand, don't pay contractors so they have liens against their properties. They basically wait for the 1st home to sell so they can pay the bills.
It's actually ridiculous to think some people have leveraged themselves to the point of no return if the RE market starts to tank.
there are also people that are doing that who aren't builders or construction professionals. home renos at best with maybe a couple friends in a trade. i think the mentality is "all you do is hire subs to build for you, what can possibly go wrong amirite?"
VANCOUVER (NEWS 1130) – The “assignment clause” is being blamed for our out-of-control housing market.
It allows a contract to pass hands between sellers before the closing date.
Even though it’s not illegal, questions have been raised about the ethics of it.
Now the province agrees that so-called shadow-flipping has become enough of an issue to spur an investigation by the BC Real Estate Council.
Some have suggested stripping out certain language from contracts, but is the solution even that complex?
“Many commentators have assumed that somehow there is special wording in the contract that allows assignment. The reality is that standard residential contract is silent. For any contract, including a real estate contract, it can be assigned, unless there is prohibition,” says Ron Usher, a lawyer with the Society of Notaries Public of British Columbia.
Meaning you need to ad, not subtract.
He says there are already existing clauses that work well for that and can easily be inserted in a contract, giving control over assignability to the seller.
“The only way to get control over assignability is to make sure the contract does in fact mention assignments. Typically you’ll want a clause very similar to what every developer does that gives the seller control over what happens to the contract after it’s signed,” says Usher.
The clauses have been around for quite a while but until now, have never been much of an issue for houses.
“In a normal market, this doesn’t come up very often in the residential world but we can certainly look at what the developer has done for decades,” says Usher.
He adds, there is literature on the subject and your realtor should be able to discuss the issue with you.
What are peoples thoughts about buying a Pre-Sale from a Developer who's company name is no where to be found?
Specifically I'm talking about Avalonna Home LTD who's selling the pre-sale townhome by Killarney. Beside the company name, nothing exists online. No website, nothing.
Obviously with no history you the trust factor of workmanship etc are unknown. Are there concerns of them taking all your money and running? What are some reasons why a developer basically wants to remain hidden like that?
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both sites point to a home in van.west as the location of the business with a contact "Daljit Dhami". sounds like they're a single detached home builder maybe growing and doing wood frame condos. if that's the case i don't think they're trying to stay hidden, they're just that small and don't even have a company website.
another option could be that this is an umbrella company to protect the owner/developer's assets since it's named after the complex and the farm it's built on. i've seen even big developers do that and create a company and just name it literally the address of the building it's on in case things go south they're financially protected.
What are peoples thoughts about buying a Pre-Sale from a Developer who's company name is no where to be found?
Specifically I'm talking about Avalonna Home LTD who's selling the pre-sale townhome by Killarney. Beside the company name, nothing exists online. No website, nothing.
Obviously with no history you the trust factor of workmanship etc are unknown. Are there concerns of them taking all your money and running? What are some reasons why a developer basically wants to remain hidden like that?
Probably one of those developers that Harvey is talking about. Waiting to sell previous homes under a different name to start new projects. Developer will probably need to build quick to pay bills. Caveat emptor.
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