Foreign Investment Tax in the Canadian Real Estate Market

Investors with a lot of money and opportunities to get nationalities beyond their own do not settle for just one house in their hometown. Charles at Church Charles Condo and E2 Condo properties owned by foreigners sometimes turn out to be of no use to the people of Canada, because they just sit their idly with the owners not giving them out for rent. In a developed country where housing issues are indeed very real and overpowering, perhaps Canada’s step was a bold and smart one.

What was the Step?

Canada decided to impose a fixed tax on properties owned by foreign investors, which means that regardless of how well the market is progressing and how your profits are rising, if you fail to pay an annual tax that is quite costly, you will start accumulating tax burden which the state of Canada will be very keen to legally charge on you.

The taxes which were imposed went up to around 15% of market value, and one can expect how decimating it would be for property owners.

How did Investors Respond?

According to reports from the Canadian real estate market, the move of imposing taxes worked with flying colors. The investors started two things; one was selling property, which was not an issue for the state because there were so many buyers back home who did not have taxes imposed. This step was the less popular one.

The other step was that investors started putting out their places on the housing market for rent, which meant that the urban dilemma which revolved around housing an ever increasing number of people could now be resolved without the introduction of very long term supply side policies.

Affordability and Beneficiaries

Was the policy effective in making sure that there were sufficient AND affordable houses available? Absolutely, because the locals realized that the foreign investors had no choice but to rent out their places otherwise they would have to pay from their own pockets annually. This gave the potential clients a lot of choice to choose affordable rent, and the housing problem stood resolved to some extent in major cities.

The state had a new source of revenue, so all in all it was a major step in the making. In addition, local residents heaved a sigh of relief with the availability of more houses. However, the tax has started to act as a disincentive for investors, and the future will bear answer to whether it was a good step in the long run or not.

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Toronto is launching new condo project in Roncesvalles

Worsley Urban was founded by developers named Dino Longo and Howard Goldstein who have immense experience and relevant expertise in the field of real estate sector. The partners have committed themselves to providing quality service in form of residential developments. A combination of traditional and contemporary architecture blending in with the neighborhood reflects the expertise of their workers. Providing extra ordinary value for their home buyers has always been their primary objective.

Worsley Urban Partners have sufficient experience in the real estate sector. Their projects have stood out amongst others which is a reflection of their practical knowledge. Their work is a pure representation of distinctiveness, charm and elegance.

  1. Totem

The tower is currently under construction comprising of 148 suites bringing elegant architecture into the city.

  1. IT Lofts

Currently under construction, it is located where little Italy meets little Portugal.

  1. Kew

Completed recently, its prime location in Toronto makes it an ideal place to live. It is completely sold out now.

The work of Worsley Urban clearly indicates their commitment and dedication. Another reflection of their devotion is represented by their new addition to Roncesvalles neighborhood named The Roncy Condos.

The Roncy Condos is located near the Howard Park and is an 8 storey condo. Currently in its pre-construction stage, the locality is an absolute blessing for the prospective residents. It will be offering different sizes of suites ranging from one bedroom to two bedrooms plus den. It will comprise of 93 suites. The completion date is not estimated yet.

  • Location

The Roncy condominium is located in the heart of Roncesvalles Village. With High park and Sorauren Park in its vicinity, the condominium is an ideal one for people who love to jog early in the morning. Nevertheless, the location is combination of luxury and business center. Location offers amenities for all ages. Whether a teenager or an adult, the life will remain smooth and pleasant with the facilities available in the neighborhood. The neighborhood is home to new culinary experiences with different restaurants and eateries present. Number of night clubs are also situated in the neighborhood ensuring a good night life. Basic facilities like grocery stores and shopping malls are present in the neighborhood which will ensure maximum convenience. The condo development is located such that the residents have each and everything on their door step. With hospitals, banks, gas stations and other important facilities in proximity, location of The Roncy Condos is absolutely a prime one. It is only couple a minutes’ walk away from Dundas West Subway Station.  The busy activities of downtown can easily be accessed. Location is a combination of excitement and charm with amazing activities and facilities available. Not only will it make your life much more convenient but also inspiring. You can also enjoy the beauty of the Lake Shore. The Roncy Condos has a transit score of 100/100 and a walk score of 96/100. This shows how well situated the condominium is.

Conclusion

The condominium market of Toronto is at its boom. People are continually investing in the condominiums regarding it as a worthy investment. When it comes to Worsley Developers, their work has proven to be outstanding and surely The Roncy Condos will be a representation of their mundane quality. Investing into this condominium will be worth it given the location and amenities of the project. The floor plans are pricing are not yet available. Once it gets, your condominium investment will surely pay you back. It will approximately launch in spring 2017.

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Never try to dive in commercial real estate without previous experience

Investment in Commercial venture looks very lucrative and tempting but its the most complex form of investment. We strongly recommend expert advice is necessary if you haven’t done it before.

 

Investing in commercial real estate brings with itself many downsides and challenges as well. On one hand it may seem like a gold mine while on the other hand, it requires witty minded person with a strong business sense. Some of the challenges and downsides of commercial real estate are:

Time commitment:

For a commercial real estate investor, the most challenging job is to manage his time with the property. You cannot just buy a property, give it on rent and enjoy the bounties. Unlike residential real estate investors, commercial real estate investors have to deal with multiple tenants. This means handling multiple leases, management issues, maintenance costs and other legal issues involved. All this requires a lot of time and great investment skills.

This post is sponsored by Pemberton Group and wish them success for their upcoming project in downtown Toronto: Time and Space Condos

Bigger initial investment:

Investing in commercial property requires payment of a huge sum at the time of acquiring the property as compared to buying residential units. You need to make huge upfront payment in the form of down payment and , your property may require some fixing to do as well before it can be put out for rentals. Also, you should always keep a provision for sudden maintenance costs. Since, commercial property involves dealing with a number of people; the maintenance costs will be higher than needed for residential property. You might get a surprise call one fine morning from your tenants asking to get the roof repaired. As the owner of the property, you are liable to bear the maintenance costs and ensure all the facilities provided are upto the mark.

A risky venture

Commercial property is always a high risk investment than a residential property. The commercial property is open to public. Anyone can visit the property anytime and this puts the property at high risk for damages.

* Visitors can hit the car in the parking lot or damage the property.

* Someone can paint or spray on the walls of the building.

* Visitors can slip on the ice on the walkway

A commercial property investor has to deal with all sorts of people since he has multiple tenants. Each person has a different mind and dealing with their problems and handling legal issues of the each individual is definitely not an easy task. Who knows who your next tenant might be?

Professional help

Dealing with commercial property issues is not easy and may require professional help. There are many issues that come with the commercial property and it is best to hire professionals to deal with it. This means extra costs.

 

Checkout this video for challenges faced while investing.

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Must know points about PBPT act that every property broker and owner should know

The PBPT Act or the Prohibition of Benami Property Transactions Act is really going to make things tough for people involved in real estate trading with unaccounted cash investment. Such people have to disclose their amount or have to quit such investment plans.

 

This post is sponsored by Perla Towers

Penalties and imprisonment:

According to the act, a “benami” property is the one that is authorized by one, and invested by someone else. The act turns such properties to be confiscated by the government. Moreover, people held with such properties might have to suffer sever years prison, in addition with a considerable amount of fine(about 25% of the property’s present value).

Anyone, if deliberately gives wrong information about the “benami” properties will also have to suffer from imprisonment of about five years. Additionally, these people will have to pay a significant amount of fine. In general, about 10% of the property’s market value is charged as fine. If you are investing n such benami properties, despite knowing that it’s a “benami” property, then also you have to suffer a seven years imprisonment sentence.

People, who are already informed about the “benami” status of a property, still encourage others to invest or motivate customers to buy, will also be imprisoned for five years. The same groups of people will also have to deposit 10% of the property’s present value as penalty.

The “benami” transaction modes:

The power of attorney or the person in whose name the property is bought will also have to reveal about their source of income. Failing to give satisfactory answermay cost penalties or imprisonment, accord to the new laws.In general, the benami property owners have the original documents and enjoy authorization, which they can sell as they find an appropriate price. Agricultural properties or the properties of no authorizations are generally sold this way through benami owners. Needless is to say that such transactions are made through cash only. However, PBPT act and the recent demonetization have certainly affected such transactions in Indian markets. In other words, usage of black money in real estate sectors is no more an easy way available.

Be aware brokers!

PBPT act has also managed to put a break in to fraud real estate property broking agencies. It’s a fact that everyone knows is that most of the Benami trading are done through fraud broking agencies. These broking agencies hold no leg authorization. As a result, it becomes easier for them to cheat people or to avoid legal actions. Such organizations in general vanish after investment.  In most cases, the transactions are done in cash. However, recent PBPT acts and demonetization later by the government of India has made things really tough for such brokers or the benami property owners.

The above brokers are not just active for the commercial lands or properties; they are equally active for agricultural trading as well. Moreover, the owners of such benami “agricultural” properties also don’t disclose about the agricultural productions from these lands.  Indeed, things are going to be really tough for such property owners to operate the illegal business.

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