Use tax system to cool housing bubble
immigration lawyer suggests the Canadian tax system be used to discourage the world’s super rich from driving Vancouver property prices into the stratosphere.
Richard Kurland, who appears regularly before MPs pitching his ideas, said Canada doesn’t need to copy Australian measures that have targeted foreign, especially Chinese, investors. That would create an expensive new bureaucracy and could run afoul of the Charter of Rights and Freedoms and Canada’s international trade obligations, he said.
Instead, Canada should follow the approach taken by the FBI when it figured out it could nail Al Capone in 1931 on tax evasion charges. That resulted in an 11 year sentence
Michael Kors discounts for a man who had escaped prosecution for far more ghastly crimes.
Kurland, whose idea was greeted enthusiastically by three Canadian immigration policy analysts but skeptically by two tax experts, is calling for everyone
Michael Kors handbags outlet Canadian citizens, permanent residents and foreign nationals to provide Canada Revenue Agency confirmed evidence they are Canadian residents for income tax purposes at the time of housing transactions.
This will primarily affect those selling a property, since anyone who wants to avoid a 25 per cent withholding
cheap Michael Kors tax on their capital gain must provide a declaration that they are a Canadian resident selling their primary residence.
Kurland said it’s well known in the industry that some foreigners and even permanent residents who live full time outside Canada make a bogus claim of residency. Often, the only proof the seller offers to real estate lawyers to support that declaration is their permanent resident card, which has a less onerous residency requirement than Canada’s Income Tax Act. And sometimes, according to Kurland, properties are sold with no evidence of residency submitted.
Bringing the value of "honesty" to the system would also bring
fake Michael kors handbags outlet order to an "anything
cheap Michael Kors handbags outlet goes" industry in which temporary foreign workers, foreign students, long term visitors, refugee claimants and even people without status have bought and sold property in Canada.
The new system would likely result in greater tax compliance, could cool speculative fervour in the market, and provide government auditors with vital information to track the flow and impact of foreign investment including funds obtained through corruption and fraud into Canadian real estate.
"The information will help prevent the parking of illicit gains, hot money, and undeclared income into Canadian real
Cheap Michael Kors handbags estate," he told The Vancouver Sun.
Kurland said the CRA could configure its website to conveniently produce a residency certificate in PDF form for anyone who has filed, say, two consecutive income tax returns.
The system would have numerous benefits, including giving the federal government information on property transactions, he said. "The information would help fight tax crime domestically, since residential property can be traced."
It could also discourage uber rich foreign nationals and the "astronauts" permanent residents and
cheap michael kors Canadian citizens who make their money overseas but keep a spouse and children in Canada from throwing piles of money at Vancouver property listings, since the requirement to provide a CRA residency certificate would necessitate the filing of Canadian tax returns.
"In telling the CRA he’s a tax resident here in Canada, he now by law must report and file an income tax return that discloses his global property holdings and global income, and is required to pay tax on his global income here in Canada," Kurland said. "You think that’s going to happen? No way!"
Kurland said this change, combined with a recent federal reform he pushed for that toughens residency requirements needed to obtain citizenship, wouldn’t suddenly make Vancouver real estate affordable for ordinary people.
But it could take some speculative air out of the bubble.
"It would create the conditions for a soft landing," he said. economist and former MP Herb Grubel, McMaster University economist Arthur Sweetman, and Rob Vineberg, a former senior federal immigration official now with the Canada West Foundation think tank.
Grubel, professor emeritus at Simon Fraser University and a senior fellow at the Fraser Institute, called Kurland’s idea "great" and urged the public to support it.
"As you know, I dislike government red tape, but this addition would be worth it."
The federal government’s new ability to obtain data on real estate transactions would be of particular help, Grubel said.
"The returns for policy makers and analysts would exceed the cost, especially
cheap Michael Kors since all real estate transactions are associated with much legal and bureaucratic paper work already. A little extra would not hurt."
He added that the prospect of paying capital gains tax at the time of sale "would reduce returns that foreigners can expect from flipping real estate and thus discourage them from doing so."
But two Canadian tax experts, Dave Walsh of Ernst Young and Kevyn Nightingale of MNP, have their doubts.
Nightingale acknowledged that it’s hard to police foreigners who pretend to be Canadian residents to avoid the withholding tax.
"The Canadian tax system is highly reliant on self reporting for several kinds of income, including capital gain. This is merely one aspect of the weakness of a self reporting system," he told The Sun.Articles Connexes：