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reallyreal2
Real Estate Talker
Posts: 649
Joined: Fri Jun 03, 2016 11:30 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 7:51 am

yzfr1 wrote:
VanLord wrote:
yzfr1 wrote:

Now what if someone holding onto a pre purchased condo and the value goes down. Should they be taxed as well?

My whole point is, its impossible to tax the transfer of the contract.

All you can do is ban foreign ownership.

If you lose money on the assignment - its called a capital loss...you should know that
If you are a Canadian and you don't claim your capital gain on an assignment you are taking a big risk, as foreigner the gov has little recourse.
You don't have to ban foreign ownership or assignments, you can have all contracts registered by a lawyer and tracked by the land titles office. If the assignment changes hands the lawyers withhold a portion of the profit.  This isn't that hard, there are some logistical issues the need to be solved, but can and should be done.  While its true that the two parties may agree to a side deal (which can also be done on any real estate deal) but this is not to the advantage of the buyer, since he needs to have an accurate purchase price, otherwise he could be on the hook for higher capital gains.  

I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 7:55 am

yzfr1 wrote:
VanLord wrote:
yzfr1 wrote:

Now what if someone holding onto a pre purchased condo and the value goes down. Should they be taxed as well?

My whole point is, its impossible to tax the transfer of the contract.

All you can do is ban foreign ownership.

If you lose money on the assignment - its called a capital loss...you should know that
If you are a Canadian and you don't claim your capital gain on an assignment you are taking a big risk, as foreigner the gov has little recourse.
You don't have to ban foreign ownership or assignments, you can have all contracts registered by a lawyer and tracked by the land titles office. If the assignment changes hands the lawyers withhold a portion of the profit.  This isn't that hard, there are some logistical issues the need to be solved, but can and should be done.  While its true that the two parties may agree to a side deal (which can also be done on any real estate deal) but this is not to the advantage of the buyer, since he needs to have an accurate purchase price, otherwise he could be on the hook for higher capital gains.  

I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

Well of course there isn't a sale.   Others are just trying to complain when its not even titled to begin with so  its a solution in search of a problem
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 7:57 am

myraa wrote:
I understand that it is a contract and that the builder can sue you if you don't go through with the sale.  When people flip the assignments for a higher price it seems similar to selling a stock option for a profit.  The flipper only has to make a 10% or so deposit much like a stock option.  The flipper wants to sell it before completion so he never has to come up with the entire purchase price and incur the property transfer tax.

So how people treat assignments reminds me of option trading. 

Banning the sale of assignments is what Ontario is looking at.  The idea being that if you want out of the contract you need to talk to the builder and see if the will allow you to do this but you can't sell the assignment to a third party

In addition to that a lot of people just walk away from a presale. It annoys people but well if they can afford to leave their deposit quite simply nobody gives a flying profanity about it.
 
VanLord
Real Estate Talker
Posts: 275
Joined: Fri Aug 24, 2007 3:52 pm

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 8:52 am

reallyreal2 wrote:
yzfr1 wrote:
VanLord wrote:
If you lose money on the assignment - its called a capital loss...you should know that
If you are a Canadian and you don't claim your capital gain on an assignment you are taking a big risk, as foreigner the gov has little recourse.
You don't have to ban foreign ownership or assignments, you can have all contracts registered by a lawyer and tracked by the land titles office. If the assignment changes hands the lawyers withhold a portion of the profit.  This isn't that hard, there are some logistical issues the need to be solved, but can and should be done.  While its true that the two parties may agree to a side deal (which can also be done on any real estate deal) but this is not to the advantage of the buyer, since he needs to have an accurate purchase price, otherwise he could be on the hook for higher capital gains.  

I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.


Thanks Really, good explanation, however I'm sure in the past the gov hasn't put two and two together and in the case of an offshore buyer, they walked away with the money years ago and the gov isn't going to be able do anything about it. They need to take it a step further and make these determinations at the time of the assignment and I if taxes are owing they should be withheld, the same way they do off of normal income and in many cases investment gains are withheld at source.
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 8:54 am

VanLord wrote:
reallyreal2 wrote:
yzfr1 wrote:
I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.


Thanks Really, good explanation, however I'm sure in the past the gov hasn't put two and two together and in the case of an offshore buyer, they walked away with the money years ago and the gov isn't going to be able do anything about it.  They need to take it a step further and make these determinations at the time of the assignment and I if taxes are owing they should be withheld, the same way they do off of normal income and in many cases investment gains are withheld at source.

educated people already know taxes are withheld if a foreigner buys. plonk
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 8:55 am

reallyreal2 wrote:
It's really very simple if you can think logically for more than 3 minutes at a time.

^--- textbook definition of drivel
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 8:56 am

yzfr1 wrote:
I 100% agree with you that it should be taxed.

No one should be able to earn money for free in this country while be afforded the protections and rights it provides.

But as long as its the honesty policy there is no point in continuing to discussion.

Declaring tips for waiters / service people
How about collecting rent on basement suites
All the tax free labour in the renovation and construction business

There is a problem, but i have not heard a good solution on how to fix it. I'm only hearing that it should be fixed in which I'm in 100% agreement

well a more base explanation is - its a solution looking for a problem lol
 
myraa
Real Estate Talker
Posts: 13
Joined: Thu Mar 30, 2017 7:25 pm

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 10:27 am

When the market is hot you can walk away from a presale and only lose your deposit.  The developer is fine with that because they can sell the property easily.  However, I do remember newspaper articles about people trying to walk away from a large development when the market was crashing.  The builder sued them for the difference between what they agreed to pay and the current lower market price.  So yes I agree you can walk away and only lose your deposit but this generally only works in a bullish or balanced market.  
 
yzfr1
Real Estate Talker
Posts: 241
Joined: Tue Mar 19, 2013 8:35 pm

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 10:34 am

reallyreal2 wrote:
yzfr1 wrote:
VanLord wrote:
If you lose money on the assignment - its called a capital loss...you should know that
If you are a Canadian and you don't claim your capital gain on an assignment you are taking a big risk, as foreigner the gov has little recourse.
You don't have to ban foreign ownership or assignments, you can have all contracts registered by a lawyer and tracked by the land titles office. If the assignment changes hands the lawyers withhold a portion of the profit.  This isn't that hard, there are some logistical issues the need to be solved, but can and should be done.  While its true that the two parties may agree to a side deal (which can also be done on any real estate deal) but this is not to the advantage of the buyer, since he needs to have an accurate purchase price, otherwise he could be on the hook for higher capital gains.  

I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.



reallyreal2 wrote:
yzfr1 wrote:
VanLord wrote:
If you lose money on the assignment - its called a capital loss...you should know that
If you are a Canadian and you don't claim your capital gain on an assignment you are taking a big risk, as foreigner the gov has little recourse.
You don't have to ban foreign ownership or assignments, you can have all contracts registered by a lawyer and tracked by the land titles office. If the assignment changes hands the lawyers withhold a portion of the profit.  This isn't that hard, there are some logistical issues the need to be solved, but can and should be done.  While its true that the two parties may agree to a side deal (which can also be done on any real estate deal) but this is not to the advantage of the buyer, since he needs to have an accurate purchase price, otherwise he could be on the hook for higher capital gains.  

I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.


Simmer down there..

If they wanted to tax the presale contract. Upon transfer of the contract the actual value of the sale would be declared. Both sides would write it down and would be registered in a binding contract.

If buyer wants to declare actual value, then seller won't give him the discount. Its in the buyers interest to declare less so buyer and seller can save on tax.

Because value is declared on the spot of sale of contract there will be no future changes in value and CRA blah blah blah.

Reallyreals whole argument is netrualizes with basic logic. Again wasting everyone's time with stupid posts.
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 10:39 am

myraa wrote:
When the market is hot you can walk away from a presale and only lose your deposit.  The developer is fine with that because they can sell the property easily.  However, I do remember newspaper articles about people trying to walk away from a large development when the market was crashing.  The builder sued them for the difference between what they agreed to pay and the current lower market price.  So yes I agree you can walk away and only lose your deposit but this generally only works in a bullish or balanced market.  

true however the person laying down the deposit would have to have significant assess sitting around though
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 10:41 am

yzfr1 wrote:
reallyreal2 wrote:
yzfr1 wrote:
I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.



reallyreal2 wrote:
yzfr1 wrote:
I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.


Simmer down there..

If they wanted to tax the presale contract. Upon transfer of the contract the actual value of the sale would be declared. Both sides would write it down and would be registered in a binding contract.

If buyer wants to declare actual value, then seller won't give him the discount. Its in the buyers interest to declare less so buyer and seller can save on tax.

Because value is declared on the spot of sale of contract there will be no future changes in value and CRA blah blah blah.

Reallyreals whole argument is netrualizes with basic logic. Again wasting everyone's time with stupid posts.

Image
 
reallyreal2
Real Estate Talker
Posts: 649
Joined: Fri Jun 03, 2016 11:30 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 10:42 am

yzfr1 wrote:
reallyreal2 wrote:
yzfr1 wrote:
I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.



reallyreal2 wrote:
yzfr1 wrote:
I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.


Simmer down there..

If they wanted to tax the presale contract. Upon transfer of the contract the actual value of the sale would be declared. Both sides would write it down and would be registered in a binding contract.

If buyer wants to declare actual value, then seller won't give him the discount. Its in the buyers interest to declare less so buyer and seller can save on tax.

Because value is declared on the spot of sale of contract there will be no future changes in value and CRA blah blah blah.

Reallyreals whole argument is netrualizes with basic logic. Again wasting everyone's time with stupid posts.

I think you are starting to go to TDMA's school of english via Google Translate.
I have zero idea what you are talking about - mostly because you don't have a clue.  
Above, I have very simply explained how CRA can track down assignment contracts.  I have zero clue what your point is.
If what you are saying is that the buyer and seller are colluding on price of an assignment so the seller avoids tax - and by doing so, the seller is giving the buyer a discount.... well then the seller has paid tax by accepting less proceeds (just the buyer in this case is the beneficiery).  Then when the buyer goes to sell, his ACB will be lower by the discount... meaning they will pay more tax when they sell.
Again - think this through step by step ... it's not that hard.
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 10:44 am

reallyreal2 wrote:
yzfr1 wrote:
reallyreal2 wrote:
The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.



reallyreal2 wrote:
The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.


Simmer down there..

If they wanted to tax the presale contract. Upon transfer of the contract the actual value of the sale would be declared. Both sides would write it down and would be registered in a binding contract.

If buyer wants to declare actual value, then seller won't give him the discount. Its in the buyers interest to declare less so buyer and seller can save on tax.

Because value is declared on the spot of sale of contract there will be no future changes in value and CRA blah blah blah.

Reallyreals whole argument is netrualizes with basic logic. Again wasting everyone's time with stupid posts.

I think you are starting to go to TDMA's school of english via Google Translate.
I have zero idea what you are talking about - mostly because I don't have a clue.  

FTFY
 
reallyreal2
Real Estate Talker
Posts: 649
Joined: Fri Jun 03, 2016 11:30 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 10:47 am

VanLord wrote:
reallyreal2 wrote:
yzfr1 wrote:
I was referring to applying a arbitrary tax to transferring a pre-sale contract. As I stated before, its impossible to put a value on the contract.
I think you are very confused at the moment.
"you can have all contracts resisted by a lawyer and tracked by the land titles office" the contracts are already registered with the layers. The contracts is between the seller (developer)  and the buyer (home owner) All this piece of paper is a agreement to buy the property for a set price at a future date. The contract is not the same as buying the actual property. No titles are transferred or issued until the strike date of the contract which is completion. For instance its up to the developer to decide how much downpayment he wants from the buyer and when. Now a days they are asking for as much as 25%. Again this is not mandated by real-estate rules for conventional deals. Usually deposit is 5% until subject removals. It's not a realestate transaction until the contract is executed and the buyer decides to exercise his right to buy the property at the agreed price.
Again with the withholding of the profits... how the heck is anyone going to know what the actual profits are or the losses of the pre-sale contract.
the purchase of the pre-sale lets say for example $500,000
when someone sells the "contract" for $20,000. The $20,000 is not tacked onto the $500,000.
The contract to buy the condo has no intrinsic value. Hence can't be added to net loss or gain for the person buying. So it will always result to a side deal. There is absolutely no reason for either party to admit gains. If anything capital loss would be abused. 
please take time to read my previous posts. and try to understand what I posted.. it's very clear.

It's called a "Pre-sale" as in there is no sale yet!

no losses or net gains can be occurred where then is no sale!

The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.


Thanks Really, good explanation, however I'm sure in the past the gov hasn't put two and two together and in the case of an offshore buyer, they walked away with the money years ago and the gov isn't going to be able do anything about it.  They need to take it a step further and make these determinations at the time of the assignment and I if taxes are owing they should be withheld, the same way they do off of normal income and in many cases investment gains are withheld at source.

I don't think it is a matter of identification of an assignment with an offshore buyer... probably more about collecting.
Wasn't there a news story not too long ago about the seller of the home being on the hook because the notary didn't do something correctly in identifying a foreign buyer.  I think if the burden is put on the developer, they would act as defacto police because they didn't want to become liable for the shadiness of an assignment grey market.
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What must the governments do to stop speculation?

Sun Apr 23, 2017 10:51 am

reallyreal2 wrote:
VanLord wrote:
reallyreal2 wrote:
The person buying would, of course, include the assignment payment on the purchase of the condo to their ACB.
You buy an assignment for $100K on a $500K condo meaning you paid $600K for the condo - when it comes time to sell, you are going to use $600K as your ACB.  CRA can very easily now go back and compare your cost against the sale agreement when you purchased - they will ask to review your purchase agreement with the developer and the assignment agreement.  Then they check to see if the person that assigned you the paper claimed the gain on their taxes.  Alternatively, CRA work the other way and audit the developer and compare the pre-sale agreements with who actually closed on the unit - if there is a difference, they can determine that there was an assignment.  Once an assignment is identified, you don't have to be Sherlock Holmes to determine the assignment agreement.  You say it is a side deal where both parties can say it was $1 - great, when the buyer of the assignment sells their place, their ACB is lower and they are paying more tax.
It's really very simple if you can think logically for more than 3 minutes at a time.


Thanks Really, good explanation, however I'm sure in the past the gov hasn't put two and two together and in the case of an offshore buyer, they walked away with the money years ago and the gov isn't going to be able do anything about it.  They need to take it a step further and make these determinations at the time of the assignment and I if taxes are owing they should be withheld, the same way they do off of normal income and in many cases investment gains are withheld at source.

I don't think it is a matter of identification of an assignment with an offshore buyer... probably more about collecting.
Wasn't there a news story not too long ago about the seller of the home being on the hook because the notary didn't do something correctly in identifying a foreign buyer.  I think if the burden is put on the developer, they would act as defacto police because they didn't want to become liable for the shadiness of an assignment grey market.

its a matter of identification people involved are required to check themselves or hire someone to do it. plonk
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