BC Business
Plus, B.C. cracks down on fixed-term leases, Airbnb offers to work with cities, Vancouver wants homeowner grant review, London mayor looks at who's buying U.K. property, and Hangzhou restricts second-home buyers
Federal Finance Minister Bill Morneau announced new rules aimed at limiting foreign money into Canadian real estate and ensuring that Canadians take on mortgages that they can afford. The rules, announced Monday, include a move to close a loophole in the tax laws that allows non-residents to buy homes in Canada yet get a tax exemption when they sell the home by claiming it as a principal residence. Another change is that all insured mortgages must now undergo a stress test that ensures a borrower’s ability to make their mortgage payments at a higher interest rate. (CBC)
B.C. Minister Responsible for Housing Rich Coleman plans to close a loophole that lets landlords avoid rent-control rules. Ministry staff are looking for legal ways the province can stop landlords from pushing tenants to sign fixed-term leases with vacate clauses requiring tenants to move out after a year or sign a new lease with large rent increases. B.C. rent control rules currently limit increases to one every 12 months: 2.9 per cent in 2016 and 3.7 per cent in 2017. (The Globe and Mail)
Airbnb has offered to help B.C. cities regulate and tax vacation rentals. Last week Airbnb public policy manager Alex Dagg told a Union of B.C. Municipalities forum on the topic that the company welcomes regulation by B.C. cities to help control the exploding market for short-term vacation rentals and is prepared to collect and remit accommodation taxes. Airbnb already collects and remits taxes in 200 U.S. cities. (BC Local News)
The City of Vancouver wants the B.C. government to review the provincial homeowners’ grant program as fewer people qualify for the grant because of rising property assessments. The basic homeowners grant, provided by the province to reduce the property tax paid by a homeowner on a primary residence, is $570, but the amount starts dropping for properties worth more than $1.2 million and hits zero when the property value reaches $1.35 million. A City staff memo slated to go before council suggests the number of Vancouver homeowners eligible for the grant has dropped from 84.5 per cent in 2006 to just 64.7 per cent this year. (Vancouver Sun)
London mayor Sadiq Khan will launch the U.K.’s most comprehensive inquiry into the effect of foreign investment on London’s housing market, amid growing fears about the scale of gentrification and rising housing costs in the capital. Khan said there are “real concerns” about the surge in the number of homes being bought by overseas investors. One key aim of the research will is to shine a light on who is investing and where the money originates. (The Guardian)
Hangzhou, a city in eastern China, has introduced measures to cool the housing market. People without a local household registration certificate cannot buy a second home in the city, where prices have risen 20 percent in the last year. In the past few months, cities such as Shanghai, Nanjing, Suzhou, Xiamen, Hefei and Zhengzhou have unveiled measures to cool the housing market, including purchase restrictions and higher down payments. (China Daily)