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Comment by trevelyan | Hacker News Reader

A lot of Chinese money involves families paying for housing ostensibly bought by a legal resident or green card purchaser, usually a student who comes over and then ends up owning one or two properties and sheltering family assets.

These purchases aren't usually reflected in the stats. It is more unusual for non-residents to end up owning property with no guarantees they can use it. Same in Australia and Vancouver.

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Exactly, I have a friend who's from China. His parents bought his house in SF as a "graduation present," though the deed is under his name so it's technically his. However, if he were to lose his H1B, then it's essentially a foreign owned asset at that point.

He describes it as a cultural exchange as parents in China want to help him be successful. He also says that in China, corrupt banks make money disappear all the time. So it makes sense to me.

Any sources on how much that actually happens?

It doesn't take much to distort the real estate market.

In June alone, California saw 389,690 home sales worth $238 billion. Markets that large are not moved easily.

https://www.car.org/marketdata/data/countysalesactivity

That depends if there is a ratchet in said market. Housing availability has a large leverage in sticky upward prices, especially with large amounts of low interest debt availability.

Housing prices are slow to fall as owners delay sales, but, as we saw in 2009, they do fall when the fundamentals change.

Yeah my neighbor. She comes from China, goes to school at a local university has no relatives here except a brother also in school. First thing she did was buy a house. She also drives a BMW 3-Series. How? When I asked, her parents sends her money every month. Her parents put the down payment on the house. Everything is in her name. So it happens quite often

It happened once therefore it happens quite often is not a great argument

You mean twice. Which means its probably happening a lot more in other locales

This can be perfectly legit, or not of course. How come such transfers don't attract irs or govt attention? I can't give my son more than the max annual gift of 15k without it being taxable. I've always wondered why international money transfers can seemingly ignore these rules. I expect the parents are somehow hiding that it's a gift to the kid.

Gift taxes are payable by the giver, not by the receiver.

Yes. But I'd bet that the parents just claim the kid owned that account. Tax rules in other countries like China may not require a gift tax, so you could just give it to your kid in china, and then move that account to the us, so it doesn't look like a gift. Indeed, this article says they are thinking of adding gift taxes in China. https://www.huffpost.com/entry/china-considering-to-collect-.... So I'm sure people would follow this practice and avoid us gift taxes and limits.

> 15K is not taxable. > 15K ought to be reported and will count against your lifetime exclusion. If you are likely to leave less than 11.4 million dollars, then the >15K you give every year is never taxed.

According to new data from Statistics Canada, immigrants own 43 per cent of all residential properties in Toronto and 37 per cent in Vancouver, while making up 46 per cent of Toronto’s population and 41 per cent of Vancouver’s. An additional 4.8 and 3.4 percent of residential properties have foreign owners in Vancouver and Toronto respectively. And these statistics do not seem to include people coming in on student visas.

https://ca.finance.yahoo.com/news/immigrants-canadas-highest...

Even without students the numbers are pretty high comparatively. In contrast, "of all the metropolitan areas in the [United States], Miami had the highest rate of immigrant homeownership (26 percent), as well as the largest percentage of immigrants in its population (41 percent)."

https://www.nytimes.com/2018/11/15/realestate/immigrants-and...

So it sounds like people that study and work in those cities buy houses and live in them. Wouldn't it be good city planning to permit the construction of enough homes for everyone that studies and works in the area? Housing is only a zero sum game when there's not enough of them.

They might buy them but they don’t necessarily use them. A lot of the housing stock in Vancouver is vacant even if purchased, screwing up the neighborhood economy greatly.

It would indeed be excellent city planning to do what you are suggesting. Other ideas include taxing vacant properties; restricting immigrants to ownership of a single property for N years; taxing immigration more heavily and investing in municipal infrastructure; or following Australia's lead and restricting non-residents to the purchase of newly-built housing.

And it's an great question why so many cities fail to take these steps. My guess is that inertia wins partly because it becomes politically inexpedient to blame immigrants for anything once cities have a certain percent of non-native residents, and partly because rising home prices make older homeowners happy while pushing the marginalized and disaffected younger voters into other ridings.

Unfortunately city planners are appointed by officials who are elected by the CURRENT residents, not the potential future residents.

Preventing adequate construction is in the financial interest of current homeowners -- it inflates their property values due to artificial scarcity.

This won't change as long as city planners answer to those elected by existing residents.

How often, in general, do you think parents buy houses (or the down payment at least) for their children in a hot market like SF? AFAIK, quite often, especially in expensive places like SF. It doesn't just happen to parents of international students as well, I know there are boomer parents buying houses for their children.

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