Facts By Email


  • QUESTIONS, QUESTIONS (Rent controls, foreign and vacant home taxes, election, oil, dollar)


Questions, Questions

Q: A few questions after reading the FBE #15.  
1. In the empty homes tax item…..A doctor living out of province for more than half a year…nice…but I thought you couldn’t stay in the USA for that length of time unless you moved there?

A: Canadians stay in the U.S. usually a maximum of 182 days, or about six months during a 12-month period.

Q: Would the province even consider him a resident if he was gone that long?

A: Yes.

Q: Also, the resident staying in Florida (nice) has a 3 million dollar home…I thought the tax would be $30,000 not $60000?

A: Yes, Indeed I corrected that on our Hotline last Tuesday. Yes, it’s 1%. I was reading the NDP proposal of a 2% tax across the board for people not paying BC income tax…and applied 2%. My mistake, sorry!

Q: And finally…the bylaw states “occupied by a tenant” …hard to believe a judge would think occupied means not being able to go inside?…possession of by way of a lease and occupied are different things in my mind?

A: It’s all idle speculation. Fact is that – in my opinion – it is a dumb tax punishing home owners. Why? 1. Try and find a tenant for just 6 months – who will move out at the end of it; 2. Try and find someone that you like to live in your furniture and your special decoration. 3. You are being squeezed! Either you pay the unconscionable tax for no good reason or if you rent it for 6 months…that income will lose you your capital gain exemption!!

Q: Last year when Vancouver Realtors were saying sales were slowing down because of lack of inventory sounds similar to Victoria…wasn’t it just after that, that the market suddenly stopped?…and then of course blamed on the vacancy tax?

A: Agreed. Somewhat. We reported the decoupling of SF housing sales from condo sales last April and every month thereafter. Sales of SF homes dropped between 20% and 40% till the announcement of the tax. Then they really dropped by over 60% and in some areas by as much as 80%.

Q: Your answer to my question “who will win the election” was “really?” What does that mean?
(Comment: This question was asked or commented on 21 times (thanks). A lot of them were asked in a ‘debating mood’…on both sides of the spectrum. The ones I really am surprised at start with: “You must agree…”)

A: I am a forecaster. (Or try to be). I did forecast a few month ago and again at out Landrush conference that  in my opinion – Christy Clark would win. That, by no means should be taken to mean that I support her. In fact, I detested her Government’s decision to bring in (not the tax itself) the retroactivity of the foreign tax (which will have far reaching consequences). However, my answer: “Really?”, was meant to express my astonishment of you asking that question. There is no way I would tell you how I vote, or how you should vote. I think you should not care what Ozzie or anyone else thinks. What you should do is…

  1. Vote
  2. Analyze – based on your own personal situation and outlook of the BC economy – the facts as you see them under each potential new government
  3. Vote
  4. Listen carefully to the promises made, kept and not kept and the new promises made and their likelihood that they will be kept.
  5. DO NOT ASSUME IT IS A FOREGONE CONCLUSION. From the hundreds and hundreds of people I talk to on an ongoing basis, the picture that emerges is that it is A LOT CLOSER THAN YOU THINK! I will be in Europe on May 9, but my clan and I will have voted before I go
  6. So, whatever you do…VOTE!

Q.: I do not understand why France matters to us, or the fact that there are a left and a rightwing candidate running.

A: See below

Q: A similar question goes: “Not sure why  we spend a lot of time analyzing Europe, Oil and the Canadian dollar. It is not relevant to our Vancouver’s market. I would prefer you focus on when exactly the market is changing.”

A: Europe? If the right or the left win in France, Germany or Italy – or Ms. May miscalculates and loses the Britain election – it may spell the end of the Europe. More importantly…The rich will flee with their money and some of them come here and buy real estate. If not – fewer will come.
Canadian dollar? We continually (since 2011) try to answer the ‘whither our dollar’ question. Dozens of subscribers and investors in our group have invested multi millions in the US. Thus we advised (without guarantee) our view on the dollar and oil (quoting experts) to help you – if interested in the States. In 2011 we advised you to exchange 50% of you investment dollar at $1.05. This year in January we shared Moneytalks advisors view (Josef Schachter and Victor Adair) and shared with you our view that the dollar was  heading to .70cts. (It was at 78.5 today it is at 73.49.)
Oil? Same reason. We are a petro currency. The same top notch advisors said oil will likely hit $40. That means a declining dollar and for Alberta real estate – still tough times ahead.


• International •

Trump: Softwood Lumber

In our 2017 Outlook issue (Issue 2 January 2017) we pointed OUT POSSIBLE the good and bad of Mr. Trump initiatives.

I predicted – among other things – that he would deal with our simmering softwood lumber issues. He did today by slapping in a tariff on our softwood lumber exports and calling our lumber producers and milk boards nasty names. I  called it an early and easy victory (seemingly) for him and how he would do it quickly. Of course, as I mentioned on our Hotline: Our producers have been raising prices for weeks to offset the (fully expected) new tariffs. (Canadians are polite but NOT dumb!) Actually today – accounting for the falling dollar and the new prices – some of our lumber prices are setting records as are some of our forest companies’ shares. Go figure.

Major Point: We have been fighting with the US for 14 years as to what constitutes a subsidy. We also won most arbitrations. I would not be surprised if we come out swinging. Losers? The US consumer.


As Michael Campbell pointed out last Saturday, our milk subsidies and quota management of our Milk boards is actually very hard to defend. The protection of the industry and farmers are actually adding $600 per household for a Canadian family.

Major Point: Mr. Trump may have a point. In any case –  it will be his next Canadian target.


Calling an election when you do not need to – because your advisors tell you that you will win – is a dangerous game. As Canadian Prime Minister Joe Clark found out. However, it is likely that Ms. May and conservatism will win – wiping out the last remnants of Britain’s left.

Major Point: Her win will solidify her Brexit stance and will speed up the process.


In a mad set of circumstances the French election pitted right wing Ms. Le Pen against totally left wing Mr. Mélenchon. Drama indeed. The fear was that either one would be in the run-off election that is part of French politics. This could have destroyed the euro and the EU. Instead the inexperienced Mr. Macron beat them all with Ms. LePen close behind. It is now a given that Macron will win the ‘run off’ on May 7. That means that France (and with it) Europe will have the status quo back – even though all the traditional parties were totally destroyed (remember US and Trump) by relative outsiders. Mr. Macron is only 39 and very handsome. Ah so, now France and Canada will fight for the title of most beautiful handsome and cute Prime Minister/President.

Major Point: It is not over. There is an outside chance that Ms. LePen wins (doubtful). But what I wrote in 2011 and showed you in a slide at every Landrush conference “don’t worry about Greece, worry about France and Italy” is still true. Let’s face it: France has never balanced its budget since 1974 (yes!) , Italy’s banks are totally bankrupt…and the BLACK SWAN is circling Europe. (What swan? The totally unexpected straw that breaks the EU Black Swan.)


• Canada •

CMHC Introduces ‘Enhancements’ April 25, 2017

CMHC releases enhancements to its multi-unit mortgage loan insurance. Background:

As at September 30, 2016, CMHC multi-unit mortgage loan insurance accounted for approximately 12% of its overall insurance-in-force. The changes apply to CMHC insured loans for 5 or more unit residential properties including standard apartments, student housing, single room occupancy (SRO) projects, retirement homes, and supportive housing projects. Effective May 15, CMHC will be:

  • Extending its affordable housing flexibilities to existing rental properties, including Social Housing projects with up to 5 years remaining in the Operating Agreement, to support the preservation of existing affordable housing. Previously, affordable housing flexibilities were only available for new rental properties.
  • Expanding its definition of affordability to recognize federal, provincial, territorial or municipal housing objectives. The new affordability criteria also aligns with other CMHC initiatives and is intended to incent housing developers into the affordable rental housing market.
  • Introducing greater underwriting flexibilities to better support key multi-unit market segments that address the rental housing needs of Canadians including standard apartments, student housing, single room occupancy (SRO) projects, retirement homes, and supportive housing projects. Greater underwriting flexibility is provided surrounding non-residential space, furnished suites and bulk leases, amortization periods, off-campus student housing, second mortgages, non-recourse lending and personal guarantee requirements.
  • Introducing a revised premium schedule aligned with CMHC’s continued participation in market segments that address the rental needs of Canadians, and is reflective of the risks associated with those segments. The revised premium schedule also supports the expansion and preservation of affordable housing units. Premium surcharges will no longer be collected for construction advances, release of rental achievement holdback, student housing or retirement homes.

Major Point: This is brand new. We will study the details, impact , etc. and report back next week.


Ontario Exempts Rental Apartment Buildings From Foreign-Buyer Tax


  1. As we predicted last year after B.C. introduced Canada’s first foreign home buyer tax, Ontario has followed suit, but the Ontario’s Non Resident Speculation Tax version has…
  2. …one key difference: no foreign tax on multi-family rental apartment buildings of more than 6 units. Along with other differences, we forecast the lighter Ontario version of the tax will have an even smaller and shorter impact on housing prices and sales than it did in Metro Vancouver.
  3. Once legislation is passed, Ontario’s new foreign tax would be effective retroactive to April 21, 2017.
  4. Ontario’s foreign-home buyer tax has a wide geographical reach and will (NOTE!) extend to pre-sale condo assignment sales, yet it has a narrower definition of a foreign buyer than the original B.C tax.
  5. Here is a quick look at the Ontario measures introduced this week:
    • A 15% tax on home purchases by non-resident foreigners in Toronto and the entire Greater Golden Horseshoe that includes Orillia, Barrie and Peterborough to the north and extends south to Hamilton, Brantford and Niagara.
    • (In B.C. the foreign-buyer tax was imposed only in Metro Vancouver, but has spread to Victoria. Victoria voted it in April 24) 
    • The Ontario tax does not apply to new immigrants who plan to live in Ontario. Refugees are also exempt. A rebate would be available for foreign buyers who later become citizens or permanent residents, as a well as foreign nationals working in Ontario and international students. (NOTE: These are generous loopholes that we expect will be exploited through proxy buyers, such as students and immigrants with work permits. B.C. has also watered down the foreign-buyer tax to exempt – and rebate – permanent residents and those with work permits, whether they actually work or not.)
    • The Ontario tax applies only to residences that have less than 6 or less units. It does not apply to multi-residential rental apartment buildings. (In B.C., all apartment buildings are subject to the foreign-buyer tax because they buildings are deemed residential by BC Assessment.)
    • Assignment sales Ontario is “looking at” (read “will do it soon”) a speculation property tax on the sale of pre-sale condo (and other new homes) contracts, called assignments. (In B.C. pre-sale assignments are (still) not subject to any property or sales tax, but, if elected May 9, the BC NDP pledge to bring in such a tax.)
  6. Rent controls:
    • Ontario will extend rent controls to all private rental units in the province, including those built after 1991, which are currently excluded. That rule is now in effect. Annual rent increases are capped at 2.5%.
    • Ontario will allow municipalities (read Toronto) to bring in taxes on vacant homes in an attempt to force owners to rent them. (Vancouver has such a tax on already. Ridiculous.)
    • Ontario is offering a $125 million rebate program on development cost charges for those building purpose-built rentals. (But the extension of rent controls could negate this incentive.) 

Major Point: Eventually, the foreign-buyer tax will be extended right across Canada, making us a laughing stock, because Canadians continue to be one of the largest buyers of homes in other countries, while also loudly trumpeting open borders and inclusive immigration policies.

The foreign buyer tax made a quick dent in the Metro Vancouver market, but foreign buyers have come back (5% of the Metro housing market as of December, according to a Royal Bank survey, but this may reflect foreign buyers finding ways around it, such as the use of proxies so they are not counted as foreign buyers.) While detached housing sales fell after the tax came in, prices barely budged and are now inching upward, as are sales. As for rent controls, B.C. has had them for years. Alberta does not have any, yet the average rent in Vancouver and Victoria – and probably Kelowna – is higher than in Edmonton or Calgary. As politicians will one day discover, affordable rent is all about supply, not about controls.

Rent control GOOD OR BAD?

  • If a housing be rented below market level, then the production of housing becomes less attractive — less and less rental housing is built.
  • Once rental prices aren’t allowed to increase to meet demand, and people face such a strong disincentive to build new residential housing units, the term “affordable housing” quickly becomes oxymoronic.
  • Some renters will luck out and hold onto apartments at a great price. Newcomers lose (think of young people with entry-level jobs), who will have a much harder time finding an affordable place to live.
  • Also history shows that rent control results in existing stock of rental housing to deteriorate. Landlords lack incentives to upgrade their rental units, or in some cases to even maintain them adequately.
  • This is not because most landlords are “bad” or “greedy” (isolated incidents notwithstanding) but because it makes no economic sense and may simply be unaffordable to invest more money into a building where tenants pay below-market rent.


  • Renters have a strong incentive to stay put rather than take their chances in a market with a dwindling number of available units.
  • Thus, a policy motivated by the good intention of helping renters, ends up leading to fewer properly maintained rental units being available.
  • Surveys of economists regularly show that upwards of 90% agree rent controls reduce “the quantity and quality of housing available”. (Toronto Star)
  • Swedish economist Assar Lindbeck expressed this view more colourfully, stating rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”
  • This economic theory is backed by evidence from around the world.
  • From Sweden, to New York, to London and many places in between, rent control has consistently squeezed out affordable, quality housing.

The Fraser Institute analyzed the rent control phenomenon in one of its first publications back in the 1970s, explaining the “popular paradox” of rent control and showing that this well-intentioned policy backfires consistently


• British Columbia •

Victoria Introduced A Foreign-Buyer Tax

Victoria will be bringing in a foreign-home buyer tax shortly. Victoria mayor Lisa Helps originally said the tax would be needed if foreign buyers made up 10% of home purchase (they are around 6% according to provincial data) but on April 21, Victoria Council called on the province to “immediately impose a 15% tax on non-resident buyers.”

(Late news) Victoria Council votes on April 24 to bring it in. It is expected the tax will cover all of Greater Victoria and the capital region and will likely be retroactive to April 21.

Major Point: We fully expected last September for Victoria to bring in a vacant home tax as well … and now they have.


Bill 40 Strata Sales Are Speeding Up, With Higher Prices

Since Bill 40, an act that allows B.C. strata owners to more easily disband the strata corp. and sell the entire building for development, was introduced last July, it has had mixed success. Court delays and other issues dragged out sales and, in two cases we looked at, owners received little more, or even less, than if they would have if they had sold the condos individually, based on local market values.

But two recent sales, of a 36-unit condo project and a 48-unit condo project, both on North Road in West Coquitlam and close to the Burquitlam SkyTrain station, show they can be a win-win for all parties. The key is that both projects had 100% support from the strata owners, which means the sale did not require court approval (under Bill 40, 80% support can trigger a sale, subject to court approval). Also, the sites had been rezoned for higher density. The sale of both low-rise, wood frame buildings closed in March, just six months after owners had voted to sell.

The deals were stick handled by Casey Weeks, vice-president of investment at Colliers International. He said the buildings dated to the 1960s and 1970s and owners were facing expensive repair and maintenance costs. “For many of these owners, the sale was like hitting the lottery,” he said. “These were all owner-occupiers, so there was no capital gains tax.”

Major Point: 633 North Road, with 36 units on a 30,980-square-foot lot, sold for $14 million, or an average of $388,888 per unit. 705 North Road, with 48 strata units, sold for $20 million, or an average of $416,666 per unit. The benchmark MLS price for a West Coquitlam condo apartment, was $387,700 in March, so these Bill 40 sales represent a great deal for the sellers in older, need-work project.

Colliers has two similar Bill 40 strata sales in the works, including one in Burnaby’s Metrotown.



Vancouver is hot again. Even single family homes are attracting multiple offers. As an investor I would likely stay on the sidelines till after the election.



Thank you, thank you, thank you!!! A record number of subscribers participated in our survey. There were some kudos, some finger waving but on balance we came off unscathed (Phew). Some great ideas were brought forward…or supported. We will share the results and the winner with you nest week. But here is an idea that won support:


Ozzie Real Estate Talk – Video

Features US Tax Lien and Foreclosures – Ozzie in discussion with Brad Norman



We had 3 hot properties on Monday AM. They were all sold by Tuesday. 

(As we have stated many times, you are welcome to send in your ‘best deal’. There are no fees from us, nor any guarantees that your deal will be featured here or even is a good deal. It is up to you to study, evaluate and negotiate. Look up our disclaimer under the Hot Property section on your website. Interested parties – go to your website and get in contact directly with the owners/realtors or write to max@jurock.com)



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