Article finds a average of 26% of the cost of a new condo goes to the government

[misher]

Honestly we have much better weather (thus less work for the city) and higher property taxes. Why is the city charging 26% of the cost of a new condo? (3x Toronto) Remember this percentage increases rather than decreases for condos with lower prices which is why its almost impossible to sell a new condo for less than $400,00 in Vancouver. I've always believed that our housing crisis was artificially created/supported so that government can create a crisis to stay in power (same as how American governments create a war). This article is by CBC news so its pretty trustworthy.

https://www.cbc.ca/news/canada/briti...842045?cmp=rss

In order for a developer to build a Cambie street condo, a developer would be also be responsible for covering the following costs: city fees and taxes, a community amenity contribution, development cost levies, the vacant home tax, property taxes, regional water and sewer charges, Translink's new regional development cost, the speculation tax — when that takes effect — property transfer tax and GST.

These add up to approximately $220,000, so a condo that could sell for $620,000 now sells for $840,000...A similar report by the C.D. Howe Institute noted that fees and taxes on new homes in Toronto, for example, add about $70,000 to the final cost. In York Region, the figure is $125.000 and $100,000 in Hamilton.

Knowing it would be political suicide, politicians avoid placing a single/transparent 26 per cent tariff on housing. Instead they nickel and dime us with several fees, all of which add up to 26 per cent.

Doesn't it sound stupid and petty to you that developers are charged the empty home tax while there seeking approvals to build things?

It takes at least three years to get all the necessary city permits and approvals — all the while, the land that they bought and intend to develop is subject to the vacant home tax.

Both Paul Sullivan's research and a CD Howe Report on housing point to "government" as one of the largest contributors to the lack of affordability in our housing market...The C.D. Howe Institute's report on housing makes several recommendations to bolster the supply-side. They conclude that fewer fees, new zoning, and a streamlined approval process would equate to more homes, built in a timely manner, and at a lower price point...It's time for politicians to look at themselves in the mirror and admit that they are a big part of the problem. The first step is admitting that they have a problem, only then can they make necessary changes to fix it.

[Changing City]

To quote someone commenting under the article "Total non-issue. The prices are controlled by what the market is willing to pay. Strip a component out of the price, it will remain the same and other players will share the windfall. Idiotic article."

Of course a Cambie Corridor condo building pays more in fees - it's rezoning from single family to apartment, so the developer pays a CAC. If Paul Sullivan chose a condo building on East Hastings, or Dunbar, in an apartment zone like C-2, the 'fees' and the proportion would be much less. It's cherry picking a specific circumstance and then implying that it's universal.

[GenWhy?]

Read this first: https://vancouver.ca/home-property-d...pdSection46591

Not everything is black and white...

"If a property is unoccupied for more than six months of the current year, it will be subject to the tax unless an exemption applies.

Scenario: Under construction and renovation
​A property is not subject to the tax if a property is undergoing major renovations, construction, or redevelopment that causes the property to be vacant for six months where:
- Building or development permits have been issued
- The renovation or redevelopment work is being diligently carried out
- A property is subject to the tax if no permits have been issued for major renovations or redevelopment.
- Minor renovations do not qualify for an exemption.
- There are many types of renovations that may make occupancy unsafe or impractical while work is underway. However, very few of these will require the home to be unoccupied for six months; rather, the vast majority of renovation projects can be completed in less than six months’ time.
- If a renovation project can be completed in under six months, the home must either:
Continue to be the principal residence of the owner, a friend, or family member
- Rented out (in periods of 30 or more consecutive days) for at least six months of the tax year to be exempt from the tax.

[GenWhy?]

Developer Specific Q and A on Empty Homes Tax :

https://vancouver.ca/images/web/empt...2017-05-31.pdf

Misher, unfortunately not everything one reads (back in the day or today) is exactly 100% correct. That's not exactly it's "job", but good reporting today always has hyperlinks as to where all their information comes from so a savy reader can bone-up on all the facts in the article and arrive at their own educated formulation and calculation of the "full picture", rather than what this CBC article provides - a snapshot - and it admits it's a snapshot. The issue at hand is more of a Globe & Mail "Feature" peice, and CBC does lots of small snapshot articles and radio reports and interviews to give the "whole picture", but for those doing quick reads it can be deceiving. Hence this article and I encourage you to get into the nitty gritty.


You read something, even from CBC, just do some rough research reading and always confirm or challenge what you just read if it seems "too good to be what it is" or "sounds fishy".

[GenWhy?]

At 1% the Empty Homes Tax over a 3 year period on a $850k condo is only $about $25k anyway. Mind you in another thread we're seeing land costs for a simple land assembly going for $18.5 million and then tack on a $4 million + parkade when you're 2 blocks from SkyTrain... what's really the issue here?

[whatnext]

Originally Posted by misher

Honestly we have much better weather (thus less work for the city) and higher property taxes. Why is the city charging 26% of the cost of a new condo? (3x Toronto) Remember this percentage increases rather than decreases for condos with lower prices which is why its almost impossible to sell a new condo for less than $400,00 in Vancouver. I've always believed that our housing crisis was artificially created/supported so that government can create a crisis to stay in power (same as how American governments create a war)...

What?!?

What government are you talking about?

[Migrant_Coconut]

And same as how American radio hosts (and presidents) insist that global warming is a Chinese conspiracy, we have this gem.

[memememe76]

Not sure why the article includes GST and Property Transfer Tax. The developer does not pay that, the buyer does. Why would those taxes force developers to sell units at a higher price?

Eta: Maybe they are talking about the PTT they paid when they bought the land. Anyways, I don't see how this is different from us regular buyers.

[retro_orange]

This thread is a bunch of muddled BS. It's also not a politics topic. Whats with all the attention seeking new threads lately...

[misher]

My point is that we’re charging much more fees on new housing than every other city. And I don’t mean 10-20% more but 3-5x more. We have higher costs to build housing and housing costs more, does anyone see the correlation here?

We also have the highest gas prices and the highest taxes on them. I feel our politicians are addicted to the double whammy where they increase fees rather than decrease them on overpriced goods.

If you truly believe that the prices for new housing would be the same regardless of the fees then why isn’t our government stipulating that fees will be less if homes sell for less? Or are only sold to people living in Vancouver who have to hold it for 5-10 years. These fees aren’t going back to us there going to the social programs and union labour aka buying votes.

The fees also make it very difficult to build non luxury condos because in the end they require the extra profit luxury brings to afford the fees.

[Changing City]

Originally Posted by misher

My point is that we’re charging much more fees on new housing than every other city. And I don’t mean 10-20% more but 3-5x more. We have higher costs to build housing and housing costs more, does anyone see the correlation here?

We also have the highest gas prices and the highest taxes on them. I feel our politicians are addicted to the double whammy where they increase fees rather than decrease them on overpriced goods.

If you truly believe that the prices for new housing would be the same regardless of the fees then why isn’t our government stipulating that fees will be less if homes sell for less? Or are only sold to people living in Vancouver who have to hold it for 5-10 years. These fees aren’t going back to us there going to the social programs and union labour aka buying votes.

The fees also make it very difficult to build non luxury condos because in the end they require the extra profit luxury brings to afford the fees.

Prices on condos in Surrey and Burnaby have risen a significant amount in the past few years. In many cases they are worth double what their owners paid for them four or five years ago. The fees charged by municipalities cannot affect the market value of buildings that have already been built, can they? On the other hand, the selling price of an existing condo will influence what a developer will try to get for a new project.

[GenWhy?]

Originally Posted by misher

The fees also make it very difficult to build non luxury condos because in the end they require the extra profit luxury brings to afford the fees.

How so?