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  #31  
Old 11-09-2017, 03:05 PM
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Originally Posted by hillbillyreefer View Post
A 1% increase in property taxes isnít going to discourage anything. Property values in Vancouver are increasing at 15-20% per year, even adding the tax the ROI is staggering. This isnít the kind of market even little guys can get in on and make a few bucks, but in true Canadian fashion the opportunity needs to be destroyed.
I beg to differ. Single Family Home prices in Vancouver have been dropping for most of this year. However condo prices have increased.


Recent Sale Report.

This one is so fresh zolo hasnít updated it yet.

3912 Napier St. Burnaby.

Originally asking 1.49 then 1.44 then 1.39

Sold for 1.34

Tax assessment 1.55

Drip ,drip on the wood chipÖ
https://www.zolo.ca/burnaby-real-est...-napier-street


PB43
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  #32  
Old 11-09-2017, 03:18 PM
The Elkster The Elkster is offline
 
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Originally Posted by lmtada View Post
If the average home in Vancouver > $1,000,000.00 then vacancy tax a 1% > $10,000.00. Wow.
Wow unless you have 5-10million and risk losing a good chunk of that (>50%) to witch hunts and legitimate legal proceedings unless you get it out of your country. To understand the total picture one has to look at it from the foreigners perspective and what is behind this speculative money.

Putting it in terms of a local say making 100k/yr is meaningless although some of those people will get caught up in the net. Then yeah...ouch. Although renting to avoid the tax isn't that hard either.
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  #33  
Old 11-09-2017, 03:32 PM
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Originally Posted by greendrake View Post
I applaud this as it is designed to get rid of forgiven owners who are over inflating the value of homes in Va and TO. Chinese billionaires have been scooping up property and then just sitting on it because they know the value will rise when the he market is so strong because of there purchases. Regular residents can't afford a place to live all because some wealthy person in another country is playing games.
Less than 10% of Vancouver Real Estate purchased by foreigners. Means 90% is purchased by Canadians (Home ownership/Speculators).

http://r.search.yahoo.com/_ylt=AwrSb...638stAPB2CpPI-
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  #34  
Old 11-09-2017, 03:39 PM
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If you have two vehicles, one sits in your driveway (collector car, never depreciating). Should you pay a extra tax for the sitting unused vehicle? Many people need transportation, but cannot afford it.
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  #35  
Old 11-09-2017, 03:43 PM
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Originally Posted by lmtada View Post
Less than 10% of Vancouver Real Estate purchased by foreigners. Means 90% is purchased by Canadians (Home ownership/Speculators).

http://r.search.yahoo.com/_ylt=AwrSb...638stAPB2CpPI-
Be interesting to see how much of that 10% sits empty.
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  #36  
Old 11-09-2017, 03:44 PM
jstubbs jstubbs is offline
 
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Originally Posted by hillbillyreefer View Post
A 1% increase in property taxes isnít going to discourage anything. Property values in Vancouver are increasing at 15-20% per year, even adding the tax the ROI is staggering. This isnít the kind of market even little guys can get in on and make a few bucks, but in true Canadian fashion the opportunity needs to be destroyed.
1% is fine for the introduction of the tax. You cannot add a 10 or even 5% of estimated property value tax for vacant properties because it would create a very real risk of blowing up the housing market. If introduced, all of the foreign investors would not only stop the purchasing (and thus killing demand), but would likely begin dumping their houses onto the market, causing a domino effect on first the local housing market areas, and then possibly the entire house of cards. People have been speculating that Canada is in a housing bubble for ages now, and something like that would be a sharp needle shooting right at it.

At 1%, it shows the government is no longer willfully ignorant about what is going on, and is no longer interested in having Vancouver/surrounding area's residents being gentrified out of their own city because of wealthy foreigners using the real estate as safe and high return investment vehicles. Ideally if the tax does not provide any disparagement in FDI into Van real estate, you up the tax incrementally until it does, or bring in another tax.

I am no fan of having the government involved in dictating what you can and cannot do with private property owned by citizens, but similarly to how zoning laws exist, the pros seem to outweigh the cons. Besides, if executed correctly, I don't really see how any law abiding Canadian citizens will be really affected by this. Allow exemptions within the tax for snowbirds and vacation homes owned by Canadian citizen's with proven Canadian full-time residency elsewhere in Canada, and perhaps some other conditions I have not yet considered, and it seems logical to me.

You can all cry wolf about the government taking your property rights, but something needs to be done about what is happening in Vanouver/Toronto/elsewhere, otherwise we as Canadians are going to be completely priced out of our own housing markets. Great for boomers who are betting on their house value appreciating as their retirement plan, brutal for anyone else.
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  #37  
Old 11-09-2017, 03:46 PM
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Originally Posted by hillbillyreefer View Post
And with the 15-20% appreciation/year in the value,thatís $150-200000 in profit/yr. Who cares about 1% thatís not even a blip in the grand scheme of things. Like I said 1% isnít going to slow anything down, Iíd wager it will heat things up, greedy people recouping their taxes.
You're assuming that market speculation is the primary driver of the actions though. It's not at all clear that's true, many factors are at play. There's been a big drive to move money out of China and into safer hidey holes all over the world. If you consider it that way the result is the same as your point, paying 1% to maintain your investment is nothing, look at what mutual funds get away with charging.

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Originally Posted by hillbillyreefer View Post
Politicians pandering to the stupid while actually doing nothing.
So actually there's an argument to be made that by increasing the costs required to maintain this they aren't doing nothing, they're increasing the market's exposure significantly. If I have 2 mil of my money sheltered from the Chinese market / government in a Vancouver condo that causes significant concern for the people setting monetary policy there. In recent years they've taken action to close some of the loop holes people are using to move money into Canada so that might make it much harder for the owners of these investment properties unable to pay the taxes. This mostly ineffective lever put in place to put a brake on speculation might actually end up combining with higher interest rates and policy changes in China to make a lot of investments untenable. If those things to combine to tip the market it's going to be a bloodbath.
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  #38  
Old 11-09-2017, 03:47 PM
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Originally Posted by jstubbs View Post
1% is fine for the introduction of the tax. You cannot add a 10 or even 5% of estimated property value tax for vacant properties because it would create a very real risk of blowing up the housing market. If introduced, all of the foreign investors would not only stop the purchasing (and thus killing demand), but would likely begin dumping their houses onto the market, causing a domino effect on first the local housing market areas, and then possibly the entire house of cards. People have been speculating that Canada is in a housing bubble for ages now, and something like that would be a sharp needle shooting right at it.

At 1%, it shows the government is no longer willfully ignorant about what is going on, and is no longer interested in having Vancouver/surrounding area's residents being gentrified out of their own city because of wealthy foreigners using the real estate as safe and high return investment vehicles. Ideally if the tax does not provide any disparagement in FDI into Van real estate, you up the tax incrementally until it does, or bring in another tax.

I am no fan of having the government involved in dictating what you can and cannot do with private property owned by citizens, but similarly to how zoning laws exist, the pros seem to outweigh the cons. Besides, if executed correctly, I don't really see how any law abiding Canadian citizens will be really affected by this. Allow exemptions within the tax for snowbirds and vacation homes owned by Canadian citizen's with proven Canadian full-time residency elsewhere in Canada, and perhaps some other conditions I have not yet considered, and it seems logical to me.

You can all cry wolf about the government taking your property rights, but something needs to be done about what is happening in Vanouver/Toronto/elsewhere, otherwise we as Canadians are going to be completely priced out of our own housing markets. Great for boomers who are betting on their house value appreciating as their retirement plan, brutal for anyone else.
How about higher interest rates? 7-8%
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  #39  
Old 11-09-2017, 03:48 PM
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Originally Posted by lmtada View Post
I beg to differ. Single Family Home prices in Vancouver have been dropping for most of this year. However condo prices have increased.


Recent Sale Report.

This one is so fresh zolo hasnít updated it yet.

3912 Napier St. Burnaby.

Originally asking 1.49 then 1.44 then 1.39

Sold for 1.34

Tax assessment 1.55

Drip ,drip on the wood chipÖ
https://www.zolo.ca/burnaby-real-est...-napier-street


PB43

Granted this house has had some cosmetic upgrades but those houses sold in 1970 for less than $5000. I have friends who bought then, lived in them for 30 years and sold. Big return.

In the early 80's I worked with a guy from Czechoslovakia. He was in his late 20's . Came to Canada with nothing after working in Europe. He was about 5 foot 1 and ahundred pounds. He worked his ass off to get ahead.

He worked freelance with me at CTV in the staging dept. when there was work...maybe one day a week. I never saw him complain about a job he was assigned. He had a compact car and delivered pizza at night. He worked freel ance with a cleaning company cleaning up apartments where tenants had died of Aids or violent crime. He lived in a rented basement "suite" .3 small bedrooms and a kitchen/living room. He rented two of the rooms out to others. He saved up enough to buy a condo in a high rise in the west end. He never slept a night in it. He rented it out. On jobs where we provided our own lunches, his was a 1/2 thick piece of balogna between two pieces of bread. On nights when meals were catered[ hockey games] etc. he ate more than 3 guys. He also worked for me doing landscaping. No job was too tough or too dirty.
I can't imagine what he is worth today.


Politicians had lots of opportunity to restrict off shore foreign investment and chose not to. Wonder why that was,
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  #40  
Old 11-09-2017, 03:58 PM
jstubbs jstubbs is offline
 
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Originally Posted by lmtada View Post
Less than 10% of Vancouver Real Estate purchased by foreigners. Means 90% is purchased by Canadians (Home ownership/Speculators).

http://r.search.yahoo.com/_ylt=AwrSb...638stAPB2CpPI-
You make it sound like that isn't significant. Chinese foreign buyers do not need to be purchasing 51% of the real estate in Vancouver to being making a massive impact on housing prices.

This is concerning from that article:

Quote:
The figures also show that the average investment by a foreign national is $1.157 million, far more than the $735,000 spent on average by Canadian citizens or permanent residents.
The real estate transaction may be majority Canadian speculators, but it's the foreign investors who are driving and creating the speculation.

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Originally Posted by lmtada View Post
If you have two vehicles, one sits in your driveway (collector car, never depreciating). Should you pay a extra tax for the sitting unused vehicle? Many people need transportation, but cannot afford it.
That isn't really a fair comparison. Everyday people in Vancouver do not need a classic collector car to live and work. They do need housing to live and work. Include an exemption for vacation homes owned by Canadian citizens, and I see no problems.

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Originally Posted by lmtada View Post
How about higher interest rates? 7-8%
Not sure how well that would work if you mean applied to only foreign buyers. I would assume those paying $2m for a run down 900 sq ft. house in Vancouver do not need to borrow money to purchase. If applied to all buyers, it would entirely crash the market most likely, or at minimum price out Canadians.
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  #41  
Old 11-09-2017, 03:59 PM
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Originally Posted by lmtada View Post
If you have two vehicles, one sits in your driveway (collector car, never depreciating). Should you pay a extra tax for the sitting unused vehicle? Many people need transportation, but cannot afford it.
A lot of States charge property tax on everything you own. I would not be surprised if it happened here. You want to see vehicles up for sale cheap the day after that happens
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  #42  
Old 11-09-2017, 03:59 PM
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That 10% foreign number is way low. There is lots and lots of evidence of numerous shady deals and shell companies etc. One only has to look at the change in demographic over the last 10 years to see that something doesn't jibe. I'd peg the number at 20% at least. And its buying skewed to the high end of the market which has an additional trickle down/cascading affect and those purchases an additional weighting.

Don't read too much of Garths blog at least not exclusively. He's got some good thoughts but also tends to stick his head in the sand on certain issues. Rarely does he rip facts apart in a consistent fashion. Politician through and through.
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  #43  
Old 11-09-2017, 04:02 PM
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They are on to that by monitoring the utilities and usage most don't have water power (hydro) or gas connected
Leave a tap dripping and the kettle on a timer.
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  #44  
Old 11-09-2017, 04:09 PM
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Originally Posted by hillbillyreefer View Post
And with the 15-20% appreciation/year in the value,thatís $150-200000 in profit/yr. Who cares about 1% thatís not even a blip in the grand scheme of things. Like I said 1% isnít going to slow anything down, Iíd wager it will heat things up, greedy people recouping their taxes.

Most likely the assessed value for property taxes is years behind the actual value, so the 1% is an even smaller part of the overall investment.

Politicians pandering to the stupid while actually doing nothing.
People care because they have to pay this tax OUT OF POCKET (with after-tax dollars) while their real estate appreciation is an UNREALIZED gain (until they sell the house).

Lots of people don't have $10K sitting around to give to the city each year, regardless of how much their house is appreciating.
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  #45  
Old 11-09-2017, 04:12 PM
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Leave a tap dripping and the kettle on a timer.
Not everything can be 'scammed out of'.
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  #46  
Old 11-09-2017, 04:15 PM
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Speculation plain and simple.
From Garth Turner Blog today:

Unless I have mush for brains, or enjoy recreational flogging, this will be the last blog for a while on why young people canít afford to buy or rent houses in Van or T.O.

Itís not because armies of 1%ers scoop and hoard those places, keeping the condos dark and the houses vacant. No evidence of that. Besides, it doesnít pass the smell test. Why would they? But itís a convenient myth for the 99% to brandish on a stick as they march to the palace gates.

Foreign buyers? Weíve debated this one to death. In Toronto theyíre an absolute non-event, according to every piece of data published, private or public. And yet the government brought in a 15% foreign buyerís tax. It accomplished little, of course. The motivation was 100% political. Itís what politicians do.

In Van the evidence is that offshore money in concentrated areas has impacted some local prices. But the provinceís own data shows most foreign buyers come to stay as residents and buy mid-priced houses. The Lambo set exists, of course, but seems not to be a market-maker. Overwhelmingly, housing markets are dominated (90% in the Lower Mainland and 95% in the GTA) by locals.

This brings us to the real reasons house prices are stupid.

Speculation. Itís rampant as real estate has become the one-asset strategy of the masses. Just read the comment section here for a week or two (then seek therapy) to ascertain that. Weíve become a nation of house-lusty automatons, drooling over listings and measuring each other in the crassest of ways Ė by the property acquired. The boasting over how much a house has inflated is endless, and the very notion of this blog Ė that greater fools buy from lesser fools Ė is trounced daily by the vast majority of Canadians. Theyíre horny for more.

If government wanted to end this, a speculation tax would be quick and efficient. Ample precedent exists. Tax short-term windfall gains as income, and stop diddling with stress tests, anti-foreigner bias, empty-house levies or mortgage regs.

Leverage. You canít buy a $1 million investment portfolio with fifty grand, but you can buy a million-dollar house with $50,000. The ascendance of property values began in earnest when traditional 25% down payments become 10%, then finally 5% (and briefly, 0%). By trying to make real estate more accessible to people who canít actually afford it, governments have contributed to price escalation. That would reverse if CMHC did the wise thing, and insured only those with 10% or more in their jeans.

Hoarding. Yeah, happens. But not as the tax-empty-houses crowd believes. These days an astonishing 15% of all families in the GTA, for example, own multiple properties. Overwhelmingly itís a principal residence and an Ďinvestmentí condo, bought on spec. Key to this strategy is leasing the unit to try and carry it (good luck), which actually increases the pool of rental housing. It also inflates prices by creating more demand.

CMHC wipes away risk. No element of government has done more to create bubble prices and dis-entitle young buyers. By providing blanket mortgage insurance to cover every high-risk, high-ratio borrower, Canada Mortgage and Housing Agency has removed lender risk. Thus, a kid with little to put down is offered the same rate as a move-up family with a 70% down payment, even though the first-timer poses a far greater risk of default. In fact, CMHC-insured borrowers often get a better rate, since lenders know the feds are standing in the wings to bail them out. This distortion has translated into rising prices and dropping affordability. Itís time lenders shared the risk.

Unrealistic rates. An entire generation of house-horny moisters has matured knowing only the lowest money costs in history. What were Ďemergencyí rates in 2009 to save the economy from crisis became commonplace within a couple of years, then completely normal. As a consequence, we engorged on cheap money and now disbelieve interest charges might rise because, ďnobody could afford it.Ē Household debt has surprised $2 trillion and two-thirds of that is mortgage borrowing Ė leveraged against house prices which have never been higher. What a massive risk. Ironically, low rates were sustained to encourage borrowing so people could afford houses. As rates fell, prices rose. Debt swelled to fill the gap. Genius move.

So, rents are high because prices are high. Duh. Not because Chinese dudes bought mansions that donít live in much, but because house lust, speculation, cheap loans and pliant lenders made them so. By extending gobs of low-cost credit to people with scant means, governments have pimped real estate to this sad conclusion. As housing became more valuable, leasing costs have risen, too. Whacking people who own homes and keep them empty some or all of the time wonít bring prices or rents down. Believing otherwise is evidence of the real reason we have irate Mills at the gateÖ

Financial illiteracy. It is naÔve and simplistic to believe first-time buyers should be able to afford real estate within bicycle distance of downtown gigs in cities like Toronto or Vancouver. Whether their parents could or not is irrelevant, given the pace of urban growth over a generation Ė plus all of the policy mistakes detailed above. It is toxic to put all of your net worth into a single asset, in one location, in one city. Itís dangerous to borrow a huge amount of money on terms that allow the lender to increase the cost every few years. Itís irresponsible to start a family and not have liquid assets to deal with reversals or educate your kids. And the last entity you should ever trust with your financial future or your long retirement is the government.

Tax others because they own things you want? If you buy that, youíve lost your way.
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  #47  
Old 11-09-2017, 04:16 PM
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Leave a tap dripping and the kettle on a timer.
Lol
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  #48  
Old 11-09-2017, 05:12 PM
The Elkster The Elkster is offline
 
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CHMC is most definitely THE single biggest factor in the RE run up. Without it banks would not be lending the stupid amounts of money to marginal borrowers. The money that is allowing people to continually bid up prices to stupid levels. CMHC has skewed the risk factor that should be inherent with lending. Recently banks have actually been supportive of slowing the RE freight train. Funny enough their change in stance coincides with the growing trend of people avoiding CMHC coverage by using third party lenders and the bank of M&D to make up the minimum to avoid it thereby increasing the uncovered liability risk to all banks. Go figured they'd want to slow things down when their azz is on the line.

CMHC has to be wound down by slowly and continually reducing coverage and stiffening rules leaving banks to lend based on full risk assessment. Yes there will be pain. Unwinding that much market manipulation comes with a price. No it will not put prices out of reach for everyone. Given time it will lead to a decrease in lending and consequently a decrease in prices until such time as prices come in line with real wages/affordability. Current owner/sellers will take a hit but then again most have also made significant profits on the back of stupid lending which helps offset the net affect. That is unless they spent all their gains in the form of HELOC's...
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  #49  
Old 11-09-2017, 05:17 PM
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Originally Posted by hillbillyreefer View Post
You donít seriously think that the Liberals are going to even attempt to slow down Chinese investment? Trudeau greatly admires the Chinese and all other commie places. They pay him to have private dinners with him, the policy of the Liberals is made by extremely wealthy foreigners.

How do you know this is dirty money?
As much as I would like to blame Trudeau, it really started to pick up when the conservatives began the 10 year visitor visa's.
Oh it's dirty money alright, when "housewives" , "nannies", and "students" can purchase multi million dollar homes worth more than almost any Alberta ranch and then collect welfare and pay no taxes.

http://www.cbc.ca/news/canada/britis...inos-1.4158902
https://beta.theglobeandmail.com/new...beandmail.com&
https://beta.theglobeandmail.com/rea...beandmail.com&
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  #50  
Old 11-10-2017, 07:49 AM
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Originally Posted by JonBoy View Post
People care because they have to pay this tax OUT OF POCKET (with after-tax dollars) while their real estate appreciation is an UNREALIZED gain (until they sell the house).

Lots of people don't have $10K sitting around to give to the city each year, regardless of how much their house is appreciating.
If they are living in the house and not using it as an investment the 1% will not apply. Families donít pay this tax, investors do.
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  #51  
Old 11-10-2017, 08:12 AM
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Found this article last night, regarding the Vancouver situation. It is a short movie...cough cough (1+ hr). Good overviews from all.

https://www.knowledge.ca/program/van...-fixed-address
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