2023

Buying distresses property sales in Canada

Buying distress property sales in Canada is on the rise, as more and more real estate investors are turning to this form of purchasing to make a profit. This type of investment can often provide a great return on investment and in some cases, a cash flow in the very short term. Many different investors have had the opportunity to purchase a distressed property in Canada and benefit from the transaction.

Distress property sales are motivated by sellers who have inadequate resources to continue to own and maintain a property. Typically, these situations are created by lost of tenants, sudden changes in housing market or other factors.

What distinguishes distressed properties in Canada is that both parties need to engage in a bailout transaction. The current owner, the lender, or both need to benefit in order to make the transaction work. This opportunity often provides discounted prices compared to normal market values. This could be any form of incentive given by the seller which is beneficial to the investor such as shared cash, free rent periods or the ability to extend closing dates.

The seller in a distress sale is attempting to participate in a short sell or foreclosing options comparison in order to unload the exhilarated obligation quickly before further detrimental situations occur. The biggest benefit to the seller is that repossession of the property is unlikely; hence, bankruptcy options are avoided.

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There are some important considerations before participating in a distress sale transaction as an investor, such as understanding the local speculative phenomenon, settlement agreements with creditors, past debts, short sale research, and financial strain and development issues with the property. Analyzing and researching the purchase respectfully are necessary in order to gain as much benefit from the transaction as possible.

The history of the distress sale in Canada has not been glorifying. In the past, distress sales targeted vulnerable individuals, such as the elderly, who may not have had the proper legal or real estate facilitators in competition retreat in the process. To reduce ethical issues in distress sales, more stringent legislation is needed in certain areas.

Due to the increase in distressed properties on the market, more and more buyers are also targeting other options such as online auctions, pre-foreclosure sales, and foreclosure auctions for potential investments. These options tend to involve a much larger fees or deposits in order to participate, and generally require that the new owner secure financing before bidding.

In the end, it is important that buyers enrolled in any distress sale transaction approach the purchase with caution. Seeking out legal advice, doing the proper research, and having a clear understanding of any potential pitfalls are all ways to ensure that a buying a distressed property sale won’t result in a costly mistake. When done correctly, purchasing a distress property can be a lucrative investment, but for those entering with only a small understanding may find themselves in over their heads quickly and incur losses.

Removing carbon tax in Canada

The debate over the Re­moval of Carbon Tax in Canada has grown to soaring heights in recent years. The Liberal gov­ernment has pushed for and implemented a centralized and comprehensive system of carbon taxes in Canada. This controversial plan is seen as a means to get Canadians to reduce their greenhouse gas (GHG) emissions however, it has been argued that this scheme can do more harm than good if not implemented correctly. Those who oppose the carbon tax, however, have pointed to the fact that it could have a negative effect on the economy due to the inflationary pressures that it will create which, in turn, could cause the government to lose power.

The Carbon Tax was proposed by the Liberal government in April 2018 and was implemented across Canada the following year with the intention to reduce emissions equivalent to 207 MT of carbon in 2030. As such the carbon tax not only put renewable energy on an equal economic footing with conventional energy sources, but it was also designed to encourage Canadians to rethink their energy and transportation related carbon impacts through rewarding them for reducing emissions. The carbon tax was implemented through the imposition of taxes on many petroleum products such as gasoline, jet fuel, and diesel fuel. The rate of taxation varies from province to province, as not all provinces were on the same page in terms of the carbon tax. In provinces where a carbon tax was imposed, the government gave a subsidy or rebate to its residents to offset the increased costs as an attempt to make it financially more attractive for Canadians to reduce their emissions.

However, as the carbon tax has been implemented, criticisms began to pile up, such as the argument of its ineffectiveness in reducing emissions to a meaningful extent as well as its possible inflationary impact. It is widely accepted that the carbon tax is an effective lever for reducing emissions when applied correctly, however, it has been argued that the Liberal government’s policy suffers from the lack of balance between the costs it imposes on individuals as well as businesses. It has been argued that the levy does not address the biggest drivers of increased emissions, such as transportation and housing, and as such the revenues generated are not used to reduce emissions in a sustainable manner.

Most importantly, the government’s policies have failed to adequately reflect the economic effects of the Carbon Tax, such as high inflation. Inflation, which is caused by the decrease in purchasing power resulting from increases in price, has the side effect of placing those on lower incomes in a more vulnerable position, as they have to devote a greater percentage of their expendable income to paying for essentials.

The perceived failure of the federal government at keeping the taxation burden in check has increased fears that it could impact the Liberal government’s chances at staying in power. Many predict that the carbon tax will lead to a voter backlash against the Liberals and their carbon levy policy and that the push-back will have a major influence in the upcoming elections. As such the removal of the Carbon Tax within Canada is seen by many as the Liberal government’s best chance of staying in power.

Removing the Carbon Tax will certainly bring relief to many households who are struggling with the associated costs of the imposed tax and could open the door for economic growth prospects due to reduced taxation. Lower inflation will ensure that essential goods and services remain affordable and increase consumer spending, as income will not be as affected by the increased taxation rates. Further, some businesses have lobbied to be exempt from the Carbon Tax which will encourage further investment and economic activity which was previously stifled due to the imposition of the Carbon Tax. All of these factors have the potential to bring a surge in support for the Liberal government in the upcoming elections.

In conclusion, the removal of Carbon Tax could bring much needed relief to Canadian households that have been overburdened with increased taxation and help the Liberal government’s case in the upcoming election. The re­moval of the Carbon Tax could provide a greater chance of success for the Liberal government by offering economic relief to households, incentivizing businesses through reduced taxes, as well as reducing inflationary pressure. This should be duly considered by the Liberal government as it is a sure-fire way to help the party stay in power for years to come.