From: brewnoser2@gmail.com   
      
   Globe and Mail - January 18, 2016   
      
      
   It's time for Canada to take action on its offshore real estate problem   
      
      
   Practices in U.S. and Australia - and now a proposal from B.C. economists -   
   offer good solutions aimed at stopping money laundering, an activity many   
   suspect is occurring in the booming Vancouver real estate market   
      
   The U.S. Treasury Department has launched a new initiative aimed at   
   identifying anonymous cash buyers of luxury properties.   
      
   Currently, purchasers can hide their identities by acquiring real estate   
   through limited liability companies or other shell vehicles that prevent their   
   names from being linked to any specific address.   The new rule requires title   
   insurance companies to    
   identify cash buyers of properties above $3-million (U.S.) in Manhattan and   
   above $1-million in Miami - the two metropolitan centres being initially   
   targeted under the project.   
      
   The law is aimed at stopping money laundering, an activity many suspect is   
   occurring in the Vancouver real estate market as well.   
      
   Meantime, in Australia, the government ordered the sale of another eight   
   residential properties that were acquired in violation of new fo   
   eign-ownership laws (which restrict offshore buyers to purchasing new homes   
   only) that were brought in to respond to    
   growing cries that offshore buyers are driving up house prices.   
      
   The sale of the eight now brings to 27 the number of homes the government has   
   seized after declaring they were bought illegally, mostly by Chinese nationals.   
      
   I mention these two items mostly to draw attention to the complete lack of   
   action that is taking place in Canada to address the same real estate madness   
   occurring elsewhere.   
      
   On Monday, a group of economists from the University of B.C. and Simon Fraser   
   University - frustrated over the inability of the provincial government to do   
   something to address what has become a festering public-policy issue -   
   unveiled a plan of its own.   
      
   Under the proposal devised by the 10 economists from the universities'   
   business schools, a property surtax of 1.5 per cent would be levied on vacant   
   properties whose owners have no or limited taxable earnings in Canada.   
      
   The academics estimated the surtax could generate as much as $90-million in   
   Vancouver alone, a sum they suggested could be redistributed to tax-paying   
   residents of the city.   
      
   What many like about the idea is that it would target non-resident foreign   
   owners, tax evaders and others who are using the proceeds of crime to buy   
   homes in Greater Vancouver and laundering their dirty money in the process.   
      
   Now, it's not a perfect solution, admittedly.  And as B.C. Premier Christy   
   Clark indicated on Monday, there could be problems implementing it.  As an   
   example, she cited a university professor who goes on sabbatical for a year in   
   China and isn't using her    
   house.  Is she going to be taxed?  Or a senior citizen who finds himself in   
   hospital for a long stretch of time.  Would he be taxed, too?   
      
   It's certainly fair enough for the Premier to flag these potential issues.     
   But I still think the plan has a lot of merit.  And I'm sure there are enough   
   smart people in the province's ministry of finance to come up with plausible   
   solutions to some of    
   these impediments.   
      
   Personally, I'm not sure about the idea of redistributing the surtax money to   
   residents.  Why not use it to build rental stock or help first-time home   
   buyers some way?   
      
   But those are details that could be hammered out later.  The broader point   
   here, I think, is that it's taken a group of economists to come up with the   
   first real, thoughtful effort to try to address the affordability crisis.    
   Increasingly, governments    
   around the world, prompted by an upset citizenry, are trying to do something   
   about the same problem.   
      
   In Canada, we hear the federal government is trying to learn more about the   
   issue. But we haven't seen anything from Ottawa or the B.C. government that   
   suggests they're prepared to go to the same kind of lengths the U.S. Treasury   
   Department is, for    
   example, to try to identify, and penalize, those largely responsible for what   
   is happening.   
      
   The surtax that the university economists are recommending would not be a   
   panacea.  It is doubtful it would do much to stem the tide of foreign money   
   pouring into Greater Vancouver real estate.   
      
   But at least it begins to acknowledge we have a problem and that it needs to   
   be addressed somehow.   
      
   And if governments in this country don't have time to think of ways to address   
   the situation, maybe they can listen to others who do.   
      
   http://img.picturequotes.com/2/186/185928/china-is-clearly-going   
   to-be-the-number-one-economic-power-and-it-is-already-full-of-po   
   ential-with-quote-1.jpg   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)