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  #8461  
Old Posted Feb 21, 2018, 1:20 AM
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Originally Posted by geotag277 View Post
Speculator tax seems to be the main meat regarding the housing market - 0.5% of assessed value in 2018 and 2% for years after that. A 1M house will have a 20k yearly bill if it is flagged as "speculative". Combined with closing identity loop holes, this might be a powerful mechanism to discourage inefficient land use among the SFH market in particular (probably to a lesser extent condos as well).



IMO this is the bill to watch in 2018. Seems to be an area ripe for nebulous loop holes so will be interesting to see how they close them.
Given that the Federal Liberals seem to be actually giving the CRA resources and mandate to clamp down on tax evasion, I'm somewhat hopeful this might lead to less speculative activity.
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  #8462  
Old Posted Feb 22, 2018, 9:47 PM
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Let's hope Ontario will follow suit sooner rather than later if the policy makers have foresight enough to realize the certainty of the spill-out effect this new policy in BC will cause. It'd be rather late if they adopt the wait and see approach to identify "evidence" of such effect before implementation. That's what happened last time when BC introduced the Foreign Buyers Tax for the first time and Ontario decided to wait: Home prices in Toronto jumped 30% in a month.

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Vancouver's hot housing market just got tougher for wealthy Chinese
B.C. launches hike to foreign buyers tax and new speculation tax to crack down on the housing ‘stock market’
http://business.financialpost.com/re...lthy-chinese-2

Quote:
Expect Toronto to follow suit if Vancouver's 'very aggressive' speculation tax on property succeeds
While the taxes are a step in the right direction, economists say B.C. government’s budget does little to address the severe supply shortage in the market
Quote:
“For some foreign buyers it is just the cost of doing business, but some will likely move capital to other locations such as Ontario. And I think that can open the door to the government in Ontario to raise its taxes.”
http://business.financialpost.com/re...perty-succeeds
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Last edited by bless-u; Feb 22, 2018 at 10:00 PM.
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  #8463  
Old Posted Feb 22, 2018, 9:49 PM
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Originally Posted by bless-u View Post
Let's hope Ontario will follow suit sooner rather than later if the policy makers have foresight enough to realize the certainty of the spill-out effects this new policy in BC will cause. It'd be rather late if they adopt the wait and see approach to identify "evidence" of such effects before implementation. That's what happened last time when BC introduced the Foreign Buyers Tax for the first time: Home prices in Toronto jumped 30% in a month.





http://business.financialpost.com/re...perty-succeeds
Speaking of Ontario, I wonder which party will campaign that leading up to the election.
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  #8464  
Old Posted Feb 22, 2018, 10:06 PM
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Originally Posted by Dengler Avenue View Post
Speaking of Ontario, I wonder which party will campaign that leading up to the election.
I wouldn't be surprised if Ontario's NDP would carry the torch since BC's NDP is the architect for this progressive campaign. Ontario needs someone to take the initiative and act as an advocate. It's becoming a movement to counter the economic/financial invasion from speculators overseas.
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  #8465  
Old Posted Feb 23, 2018, 1:13 AM
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Thanks for the link. It was an interesting article and a true one and was actually backed up by something I experienced today.

I was at the Save-On-Foods {a big grocery chain in BC} in Cloverdale and was getting a little ticked off. I went thru the self-serve cash registers which I don't mind using it but had a problem and there was no one in sight to help despite have 6 cash registers. Another women needed help and was also getting a little ticked off. I had to wait about 5 minutes before someone showed up and helped and then they quickly left again leaving the self-serve area without assistance.

I was a little ticked and when done I politely asked to see a manager and voice my concerns about the lack of available assistance at a self-serve with 6 cash registers. He was very nice but didn't pull any punches. He flatly said there is nothing we can do as they simply didn't have enough workers to staff the store. He said they are constantly hiring and can't get good staff and when they are hired they quit all the time and compared it to a revolving door.

He stated that he has had a lot of staff leave Vancouver over the last year and every Save-on-Food in greater Vancouver was in the same boat and said very plainly it was because Vancouver was simply too expensive to live in and hence can't get or retain hired help.
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  #8466  
Old Posted Feb 23, 2018, 5:40 AM
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Kudos to BC for taking this necessary initial step, I hope Ontario is next.
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  #8467  
Old Posted Feb 23, 2018, 1:36 PM
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Canadians with B.C. vacation homes to be hit with new tax

British Columbia's new property tax targeting out-of-province owners will hit Albertans and other Canadians who have vacation homes there with a big additional bill of thousands of dollars.

On Tuesday, one of the primary measures in the B.C. budget was the introduction of what the government is calling a speculation tax. It is aimed at foreign and domestic property owners who are parking capital in real estate and driving up prices in the province. It would apply to owners who do not pay income tax in British Columbia. Principal residences are exempt, as are properties with long-term renters.

A typical vacation home that is used several times a year but is otherwise empty would not be exempt. "If you are from outside the province and you leave your home vacant, you will be taxed," B.C. Finance Minister Carole James told reporters on Wednesday.

https://www.theglobeandmail.com/news...ampaign=PM2018
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  #8468  
Old Posted Feb 23, 2018, 2:11 PM
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Originally Posted by 240glt View Post
Canadians with B.C. vacation homes to be hit with new tax

British Columbia's new property tax targeting out-of-province owners will hit Albertans and other Canadians who have vacation homes there with a big additional bill of thousands of dollars.

On Tuesday, one of the primary measures in the B.C. budget was the introduction of what the government is calling a speculation tax. It is aimed at foreign and domestic property owners who are parking capital in real estate and driving up prices in the province. It would apply to owners who do not pay income tax in British Columbia. Principal residences are exempt, as are properties with long-term renters.

A typical vacation home that is used several times a year but is otherwise empty would not be exempt. "If you are from outside the province and you leave your home vacant, you will be taxed," B.C. Finance Minister Carole James told reporters on Wednesday.

https://www.theglobeandmail.com/news...ampaign=PM2018
Well B.C. has pissed off a fair number of Albertans in one fell swoop - this is certainly going to have a negative impact in destination locales nearer to Alberta. Also, I wonder how this will affect timeshares as they are used as vacation homes by a lot of Albertans.
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  #8469  
Old Posted Feb 23, 2018, 2:18 PM
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Inefficient land use is inefficient land use. What does it matter if a home is used 1 month a year by a person from Qatar versus one month a year from a person from Alberta or Ontario? The effect on the local housing market is the same, which is, the local population is unfairly denied a home.

Look at BC's housing market right now. The priority needs to be on the local market. A few angry Albertans along the way is not and should not be a concern for getting the housing market back to affordable levels for locals.
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  #8470  
Old Posted Feb 23, 2018, 2:51 PM
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Originally Posted by geotag277 View Post
Inefficient land use is inefficient land use. What does it matter if a home is used 1 month a year by a person from Qatar versus one month a year from a person from Alberta or Ontario? The effect on the local housing market is the same, which is, the local population is unfairly denied a home.

Look at BC's housing market right now. The priority needs to be on the local market. A few angry Albertans along the way is not and should not be a concern for getting the housing market back to affordable levels for locals.
But in a place like Fairmont, it's more than a housing situation - drive away the Albertans who golf and ski there while staying in their vacation homes and now the local economy takes a hit that certainly won't be offset by a surplus of now newly available housing.

But I guess for the B.C. government, sacrificing places like Fairmont is okay for the greater good.
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  #8471  
Old Posted Feb 23, 2018, 2:53 PM
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Originally Posted by speedog View Post
Well B.C. has pissed off a fair number of Albertans in one fell swoop - this is certainly going to have a negative impact in destination locales nearer to Alberta. Also, I wonder how this will affect timeshares as they are used as vacation homes by a lot of Albertans.
It won't affect anything in the Windermere or Fairmont areas or the Shuswaps, at least for the time being. It won't affect us up in the Interlakes area of the Cariboo either. If it did I'd just transfer title to my father.

I am aware of certain areas, primarily in the Okanagan, where houses that would not typically be considered vacation homes have been purchased by out of province buyers and used as vacation properties. In certain areas whole streets of homes are owned as vacation properties

I'm not convinced this will do anything for affordability however. People will either just pay it or sell to someone else who will.
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  #8472  
Old Posted Feb 23, 2018, 3:08 PM
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It won't affect anything in the Windermere or Fairmont areas or the Shuswaps, at least for the time being. It won't affect us up in the Interlakes area of the Cariboo either. If it did I'd just transfer title to my father.

I am aware of certain areas, primarily in the Okanagan, where houses that would not typically be considered vacation homes have been purchased by out of province buyers and used as vacation properties. In certain areas whole streets of homes are owned as vacation properties

I'm not convinced this will do anything for affordability however. People will either just pay it or sell to someone else who will.
And that's the problem, the average joe who is either renting or is trying to get into home ownership isn't really going to be helped by this.
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  #8473  
Old Posted Feb 23, 2018, 3:52 PM
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There isn't likely going to be one silver bullet for housing affordability. The BC NDP budget proposes a bunch of things, which in concert, are meant to address it broadly.

On it's own, the speculative tax targeting domestic Canadians might not do much, but as a package of other measures, it might move the needle a little bit.

BC is well past the point of implementing half measures and being cautious regarding prioritizing the local market for housing. BC really needs to be doing everything at once.

For areas where housing values have spiraled out of control, it makes sense to implement these packages of "protectionist" measures.

Choosing between tourism and housing for locals, I would wager housing for locals should win almost every time, especially in the areas these laws apply to where things have gotten really bad.
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  #8474  
Old Posted Feb 23, 2018, 5:55 PM
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It won't affect anything in the Windermere or Fairmont areas or the Shuswaps, at least for the time being. It won't affect us up in the Interlakes area of the Cariboo either. If it did I'd just transfer title to my father.

I am aware of certain areas, primarily in the Okanagan, where houses that would not typically be considered vacation homes have been purchased by out of province buyers and used as vacation properties. In certain areas whole streets of homes are owned as vacation properties

I'm not convinced this will do anything for affordability however. People will either just pay it or sell to someone else who will.
The measures were never meant to affect people in the areas you mention. It was squarely aimed at Chinese satellite families. Kelowna was only included because some of the local speculators had shifted their attention to that market.
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  #8475  
Old Posted Feb 23, 2018, 6:06 PM
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The measures were never meant to affect people in the areas you mention. It was squarely aimed at Chinese satellite families. Kelowna was only included because some of the local speculators had shifted their attention to that market.
Considering the legislation is not written yet, it's hard to pin down the scope. Clearly the language of the budget was targeting satellite families with the income tax provision, but that would also swallow up many in Canada who also don't pay significant BC income tax. BC income tax was called out specifically as the demarcation line - not Canadian income tax.

Would also make sense to exclude recreational land use from the tax, things like cabins and such. All told, if you are a Canadian holding a property in downtown Kelowna, Vancouver, or Victoria, and only use it partially during the year, you are contributing to inefficient land use driving up housing prices. How much does it factor? It doesn't really matter, BC needs to do "everything at once" to try to get things back under control.
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  #8476  
Old Posted Feb 23, 2018, 8:33 PM
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  #8477  
Old Posted Feb 23, 2018, 9:08 PM
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Originally Posted by geotag277 View Post
There isn't likely going to be one silver bullet for housing affordability. The BC NDP budget proposes a bunch of things, which in concert, are meant to address it broadly.

On it's own, the speculative tax targeting domestic Canadians might not do much, but as a package of other measures, it might move the needle a little bit.

BC is well past the point of implementing half measures and being cautious regarding prioritizing the local market for housing. BC really needs to be doing everything at once.

For areas where housing values have spiraled out of control, it makes sense to implement these packages of "protectionist" measures.

Choosing between tourism and housing for locals, I would wager housing for locals should win almost every time, especially in the areas these laws apply to where things have gotten really bad.
The only thing that is going to provide downward pressure on homes prices is more supply, nothing that the BC NDP will address. After a dead cat bounce, it will continue back on its trend upwards. Watch as next year prices hit record highs again and nobody will understand why.

More record years for housing starts will bring prices down. There is a record absorption rate that needs to be fed. Until these realities are hit it is just spinning circles.

This speculative tax will help out all the entry rich locals who were priced out of luxury homes from foreigners but it isn't going to help the main-street middle-class home buyer much.
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  #8478  
Old Posted Feb 23, 2018, 9:17 PM
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The only thing that is going to provide downward pressure on homes prices is more supply, nothing that the BC NDP will address.
You don't think that billions of dollars of cash coming in from abroad and years of low interest rates make any difference? How is it that people are able to bid Vancouver houses up to $2M when the average household makes around $80,000 a year?
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  #8479  
Old Posted Feb 23, 2018, 10:13 PM
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The only thing that is going to provide downward pressure on homes prices is more supply, nothing that the BC NDP will address. After a dead cat bounce, it will continue back on its trend upwards. Watch as next year prices hit record highs again and nobody will understand why.

More record years for housing starts will bring prices down. There is a record absorption rate that needs to be fed. Until these realities are hit it is just spinning circles.

This speculative tax will help out all the entry rich locals who were priced out of luxury homes from foreigners but it isn't going to help the main-street middle-class home buyer much.
I agree. The most likely result of most of the speculative measures will be a slight cooling of the market of SFH, which will likely forever remain out of reach of working class Metro Vancouver residents from this point forward.

Who is likely to benefit from that? You're right - the people on the cusp of home ownership, who were going to buy that 600k place and instead get a deal at 550k. Or maybe the 1MM place for 850K.

It will do nothing to bring down rental prices, or moderate condo prices. The only thing that can do that is more units.

Again, my initial reaction to the budget is here - basically "not even close".

2 billion over 10 years for rental housing? 4 billion for other housing?

1 decade, 10 years, for 14,000 rental units?

For reference, even during a downturn, Calgary added 1,637 rental units in a single year. That has incredibly helped moderate prices.

http://calgarysun.com/life/homes/new...year-over-year

Quote:
Last month, there were 38,160 purpose-built apartments in the CMA, up from 36,523 in October 2016, an increase of 1,637 units.
Here is a slide from CMHC regarding rental stock in Vancouver:

http://www.cbc.ca/news/canada/britis...uver-1.4303824



2200 units in City of Vancouver... over 6 years.

Burnaby actually LOST 500 units in that time.

All told Metro Van added 3410 rental units over 6 years - a paltry 500 units a year.

2 billion on new rental housing over 10 years, at a rate of 1.4K units a year?

Not even close to enough.
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  #8480  
Old Posted Feb 23, 2018, 11:05 PM
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^ Hard to compare Alberta & BC cities though. Calgary & Edmonton have years with next to no rental stock built. It seems like rental stock only gets built at the crest of a downturn. When booms start everyone builds condominium apartments

Vancouver has quite a lot of rental stock actually, but a lot of it is really expensive. And yes it needs more.
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