patriotz

It isn’t really. What happens in falling markets is that sellers are less willing to list at or accept the current market price. That doesn’t really mean it’s harder to sell, just that sellers won’t get real.


The number of moves (thanks for the chart Leo) very closely tracks the ups and downs of Calgary house prices, e.g the peak in 2007.


But the original poster said “Sarah” had obtained non-resident tax status. That’s the first red flag. CRA says that retaining a home in Canada is a significant residential tie which disqualifies non-resident status. The second red flag is the mother “Sarah” supposedly had to visit, which has nothing to do with the tax situation and seems to have been inserted as a tear jerker.
I think any informed person who is actually in such a situation would just continue filing as a Canadian resident and claim FTC, and keep principal residence status on the property, as you have suggested.
I think it’s most likely OP had contrived a situation where a returning home owner would be subject to the spec tax, and didn’t see the internal contradictions.


This source disagrees. I am not in the business of giving advice but they are. As I don’t own a cottage I will leave it at that.
“It’s this last bit that applies to you. According to the CRA a deemed disposition is a change of use in a property. In your case, you changed the use of your vacation property (to your primary residence) after you sold your home and moved in to the vacation property 14 years ago.
From a tax perspective, you owe tax on any price appreciation in the first 14 years you owned the property. However, for the remaining 14 years—when you lived in the property as your principal residence—any appreciation in value is exempt from capital gains tax.”


There sure is. But to get non-res status in the first place you have to convince CRA that you are leaving the country more or less permanently (i.e. without residential or other ties). It doesn’t happen just because you leave the country.
At this point I have to wonder if this is a real story or at least if some significant facts are not related correctly.


Total households 1.6m sounds right given the average household size. However the number of residential properties must be less. BC Assessment says there are 2,067,479 * .88 = 1,819,381 residential properties in the province, which has a population of 5 million. As well, the spec tax cities have more dwellings per property.
Don’t know just who screwed up the number but 1.6 mil properties subject to the tax doesn’t make sense. (sorry for the duplicate, I could no longer edit the original).


Look on the bright side, that will get her out of paying the spec tax next year. 🙂
What baffles me is why someone going to work in Europe would want to become non-res in the first place. It only gets you ahead if you’re working somewhere with low or no taxes like Dubai, etc. Income tax in Europe is just as high as here, usually higher, and if you retain Canadian tax residency you can just claim a foreign tax credit for what you paid over there.


Total households 1.6m sounds right given the average household size. However the number of residential properties must be far less. There are only 2 million properties (all classes) in the whole province.
Don’t know just who screwed up the number but 1.6 mil properties subject to the tax doesn’t make sense.


Good points.
There’s also a question as to whether someone who leaves Canada temporarily but still owns and has access to a Canadian property with possessions in it ever ceased to be a tax resident of Canada in the first place.
I agree with your earlier good suggestion for anyone in this situation to contact a professional.


Section 139 of the Act authorizes the L-G in Council (i.e. the cabinet) to make a wide variety of regulations, including “respecting exemptions from tax, including, without limitation, respecting limits or conditions on those exemptions;”


BC Assessment says there are 529,730 assessed properties in Greater Vancouver. That’s all assessment classes – residential, commercial, etc. Given that GV accounts for the great majority of properties in the spec tax area, the number of properties required to declare must be less than 1 million and probably not much more than 500,000 or so.


CRA considers the property to have been sold by Sarah the non-resident to Sarah the resident. That’s called a deemed disposition and it happens any time you turn a property that wasn’t your principal residence into one, even if you’ve been living in Canada all along.


It looks to me like “Sarah” will be liable to pay capital gains tax on her 2018 return on the increase in market value of the house from the time she became a non-resident to the time she became a resident again. That’s called a “deemed disposition”. A non-resident of Canada tax wise cannot have a principal residence in Canada.
This rule has been around a long time and the tax hit will dwarf the spec tax. Can’t say she couldn’t see this coming. Anyone planning to move offshore and become a non-resident tax wise while retaining substantial Canadian assets should see professional advice.


The market is supply and demand, not some abstract entity that somehow exists independently of the former. Market price is the price at which supply meets demand. If supply is just a handful of houses, that’s just the way it is.


For now. If someone is buying a house expecting it to be a retirement asset, a drop in long term appreciation of that magnitude means a lot. That doesn’t mean buyers will realize it in the short term though.
The combined vote for PC, BQ, and Reform in 1993 was 48%, actually better than Mulroney got in 1988. If the PC’s had hung onto all of it they would have won. The gain in votes for the Liberals came at the expense of the NDP.
Of course unpopular policies mentioned below contributed to this split. You can also add the failed Meech Lake and Charlottetown Accords, which led to the formation of the BQ and the emergence of Reform as a contender in the first place.


That had a lot more to do with the newly formed BQ and Reform parties taking votes from the PC’s. Not to mention it was Kim Campbell who led the PC’s with her inept campaign in the election.
Also the Bank of Canada is very limited in its options once the Fed starts raising rates. If they don’t follow a collapse of the CAD would be likely.
I agree that a rise in interest rates may take a couple of years to result in prices falling.


Want a clear definition of the problem? Housing is too expensive.
We don’t get real solutions because there are too many parties (including current homeowners of course) who don’t want prices to go down.


You’re not including Germany’s borrowing to finance the war itself, which was huge. The reparations were just the icing on the cake.
And what is the real GDP of Canada today compared to Germany in 1918? You have to factor that in after the inflation adjustment.
Which brings us to the real issue – ability to pay. Germany was a basket case in 1918. About 3 million people had been killed, the country had lost a good deal of territory, including the industrial heartlands of Rhineland (occupied) and Silesia (to Poland), and the government was facing continuing uprisings and was barely functional. All they could do was print money. Despite all this they were able to turn the economy around by 1924.


We get you don’t like unrepresented showings. The question is, absent instructions from the seller, is it ethical to refuse them on your own initiative?
By the way I was unrepresented when I viewed my present house, and the listing agent didn’t have a problem with it. I engaged a cash-back buyer’s agent when I decided to make an offer.


They should, but must they, i.e. are they legally fiduciaries? As the bard said, that is the question.


In particular, not indicative of a specific government desire for the buyer to be represented by a real estate agent.
So if a buyer has engaged a lawyer, for example, what excuse does the listing agent have for refusing to deal with a potential buyer?


Quite right. That was a move to make more mortgage money available to support the RE market. RE prices in Vancouver and Toronto had been declining for about six months previously and Harper’s strategy was to try to turn the market around. It worked – Canada was the only country where RE prices went up during the ensuing recession. I actually remember Harper on the radio saying that the rising RE prices indicated how well his government had managed the crisis.


Which just happened to be the biggest economic downturn in BC since the 1930’s. Improved affordability doesn’t get people buying again when there is 10%+ unemployment and abandoned construction sites everywhere. There has to be a change in outlook. That was also the case for the US bust circa 2006-10, and busts in general like the Toronto bust of the late 1980’s-early 90’s.
This is basically the reason why RE is cyclical. Many factors working together with feedback and time lags.
First, the Canadian government didn’t spend any money to bail out the financial industry in 2008. I know a lot of people think it did. They did spend money to bail out the auto industry although much of that money was recovered.
More generally, it’s one thing for the government to borrow money to respond to a crisis like 2008 or Covid, and another to fund improvements to an ongoing service like health care with an aging population . You can’t finance that by borrowing indefinitely. You’re going to need higher taxes (even with increased efficiencies IMHO) or radical reform or both, and that’s the sticking point.


Affordability was much better in 1979. Real prices had been falling (i.e. prices had been falling relative to incomes) since 1976. Household debt was far lower relative to incomes in 1979 than today. Chart is Vancouver but equally relevant to Victoria.


It isn’t a tradeoff though. There’s no inherent connection between the technological advances of the last 50 odd years, or improved rights for women and minorities, and current problems such as housing affordability and health care shortages. If anything technological advances should make solutions to these and other problems more feasible.


It’s only going to be vacant if the owner wants it that way. Seems to me a vacant condo is going to appeal to a wider buyer cohort and is likely to sell for more than an occupied one, especially one occupied by a tenant.
One or two months rent is just noise in the context of a sale.


There is a glut of down market condos in Edmonton due to a condo conversion boom in the early 2000’s. Alberta has no restrictions on condo conversions. Owners of PBR’s were doing slapdash conversions and selling to investors, many from BC. I believe Ozzie Jurock was one of the promoters.