1966 replies to this topic

[Mike K.]

The majority of rental product is built by the future owner, so it’s not that big of a deal, right off the bat.

What -is- a big deal is the little guy having to pay 5% GST on top of 5% GST to buy a new home, then provincial PTT tax, since the PTT exemption is only available for homes valued at under or $750-800k sliding scale, and 0.5-acres or less. If you’re an investor and intend to rent out your unit, the rental GST exemption doesn’t apply.

You can’t buy a new home on the south Island for under $800k that isn’t a small condo. The game is rigged against you.

[Nparker]

...new home construction is falling as we rapidly increase immigration...

"I'm shocked" said no one with an IQ above room temperature.

[spanky123]

The majority of rental product is built by the future owner, so it’s not that big of a deal, right off the bat.

What -is- a big deal is the little guy having to pay 5% GST on top of 5% GST to buy a new home, then provincial PTT tax, since the PTT exemption is only available for homes valued at under or $750-800k sliding scale, and 0.5-acres or less. If you’re an investor and intend to rent out your unit, the rental GST exemption doesn’t apply.

You can’t buy a new home on the south Island for under $800k that isn’t a small condo. The game is rigged against you.

 

What I am getting at is that sure the little guy doesn't have to pay 5% to buy a new home but the developer is going to raise prices 5% since they no longer get the offset on their input GST costs.

[Mike K.]

Can you explain that a little further?

If there is no GST, what are they offsetting?

[LJ]

^ The GST of course means that developers can no longer offset their GST expense with the GST income they would receive from a sale, but they can presumably sell the property for 5% more.

 

A capital gains tax on the sale of a primary residence has been discussed for years, but I don't think it has the support the Liberals think it does. Even renters won't support it if they believe it will impact them down the road when they eventually buy.

 

I am sure the Liberals will start with a tax on properties over say $3M to punish the greedy buggers who bought nice homes, but we all know that the figure will creep down over time and eventually it will apply to everything. Now the US has had a capital gains tax for years but they also allow mortgage interest to be deducted from income.

In the US, if you buy another more expensive house after selling, they don't collect any capital gains tax.

[Mike K.]

It’s like that for commercial purchases as well, right? You have to buy up, within six months?

[dasmo]

But mortgage interest is tax deductible so there is some balance to that. Suddenly implementing that here would definitely be the final stage in Net Zero.

[LJ]

It’s like that for commercial purchases as well, right? You have to buy up, within six months?

Don't know, never bought and sold commercial properties.

[spanky123]

Can you explain that a little further?

If there is no GST, what are they offsetting?

 

They have to pay GST on their supply purchases (ie lumber, nails, etc).

[Mike K.]

I'm still not sure I understand. Builders are not paying GST now, to build rental housing.

[Victoria Watcher]

Nearly 250,000 of the more than 660,000 rental households in B.C. pay an "unaffordable" amount for housing, with 30 per cent or more of total household income going towards rent and utilities.

Within that group, more than 100,000 are paying over 50 per cent, which is described as a "crisis-level" amount.


https://www.cbc.ca/n...-2023-1.6881939


Maybe these households are fine with that? They could always pick up their income game. Or rent a cheaper place.

Edited by Victoria Watcher, 20 September 2023 - 08:46 AM.

[spanky123]

I'm still not sure I understand. Builders are not paying GST now, to build rental housing.

 

They are paying GST on their purchases for materials and supplies are they not or are they exempt?

[spanky123]

Nearly 250,000 of the more than 660,000 rental households in B.C. pay an "unaffordable" amount for housing, with 30 per cent or more of total household income going towards rent and utilities.

Within that group, more than 100,000 are paying over 50 per cent, which is described as a "crisis-level" amount.


https://www.cbc.ca/n...-2023-1.6881939


Maybe these households are fine with that? They could always pick up their income game. Or rent a cheaper place.

 

The 30% 'rule' was created in the 80's when most tenants had roomies. Since then the percentage of homes occupied by single tenants has skyrocketed so the 30% rule doesn't apply in the same context. If we had the same occupancy levels as we did in the 80's then 30% would be much more attainable.

[Beacon]

The 30% 'rule' was created in the 80's when most tenants had roomies. Since then the percentage of homes occupied by single tenants has skyrocketed so the 30% rule doesn't apply in the same context. If we had the same occupancy levels as we did in the 80's then 30% would be much more attainable.

 

IIRC, it was the 25% rule before that, it keeps getting tweaked as home prices rise.

[Victoria Watcher]

What’s the rule for car expenditures? Or popcorn? 🍿

[Mike K.]

They are paying GST on their purchases for materials and supplies are they not or are they exempt?

They are now exempt, as far as I understand it.

At least through December 30, 2030 when the exemption expires.

[Barrrister]

So I can go to Home Depot and tell them that I am building rentals and they will not charge me GST?

[Victoria Watcher]

Despite a desperate need for new housing, Canada's developers are building fewer homes than they were at the height of pandemic lockdowns, a new study says – and experts say that could mean a generation of Canadians won't be able to afford homes for most of their adult lives.

 

Inflation and the Bank of Canada's response to it, has been the main reason for the slowdown, according to David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives (CCPA). 

 

The new decline in housing development started last year, when the Bank of Canada started to raise interest rates to cool the economy and combat inflation, Macdonald found in a new report for CCPA. 

 

Compared to April 2020, when lockdowns shut down part of the development industry,  investment in new single-family homes is down 21 per cent, the report says. New apartment construction is down two per cent from that time and row house development is down eight per cent.

 

"The impact of Bank of Canada rate hikes have been breathtaking," Macdonald wrote in his report.

 

They're also unsurprising, he says.

 

"If you have to take out a loan to engage in a type of economic activity, higher interest rates matter," Macdonald wrote. 

 

 

 

 

https://www.cbc.ca/n...anada-1.6989582

Edited by Victoria Watcher, 08 October 2023 - 09:53 PM.

[Ismo07]

So I can go to Home Depot and tell them that I am building rentals and they will not charge me GST?

 

You would pay the GST and then if it's for commercial revenue you can get a rebate.  It's not like avoiding the tax for children's clothes.

[Victoria Watcher]

Now, one Oak Bay resident has gone a step further in maximizing the income potential of her home.

A Facebook Marketplace listing is offering a portion of her home to be rented out as “office space” while she is at work. The photo attached to the listing shows a home office set up next to a window offering plenty of light.

The space is being offered for rent for $450 a month for four days a week from Monday to Thursday and includes access to other parts of the apartment, including the bathroom, kitchen and an outdoor patio.

https://www.vicnews....at-work-5888332

Edited by Victoria Watcher, 13 October 2023 - 12:31 PM.