5833 replies to this topic

[marks_28]

Why shouldn’t renters pay a $20,000 tax bill, too, when they find a new apartment?

 

Because they aren't selling an asset that can pay for a "transfer tax". A sizeable portion of those renters would not have $20k to pay for this tax. I moved four times in my 20s. Not one of those times did I have close to that amount of disposable income. I'd be $80k in debt. Good luck ever buying property. 

[Mike K.]

What do you mean selling an asset that can pay for a transfer tax?

[Victoria Watcher]

Because they aren't selling an asset that can pay for a "transfer tax". A sizeable portion of those renters would not have $20k to pay for this tax. I moved four times in my 20s. Not one of those times did I have close to that amount of disposable income. I'd be $80k in debt. Good luck ever buying property. 

 

Imagine all the programs the government could offer you with your cash though.

 

Like the G&M article says, the government could really use that money.

 

 

The nearly $1-billion a year this is costing B.C. could be far better invested in addressing the side-effects of Canada’s most inflated housing market, rather than further pumping it up.

 

Edited by Victoria Watcher, 10 January 2022 - 04:44 PM.

[Mike K.]

When did the real-estate experts switch from promoting a pending real-estate bubble burst to treating homeownership as an always appreciating investment?

 

I mean that's quite the turn-around. It feels like only yesterday the experts said homeownership was financially risky and danger-laden, now it's a guaranteed millionaire-maker. 18 months ago the market was supposed to collapse due to COVID, these experts said.

 

Marks, you have to take into consideration what it costs to buy and sell real-estate, and what market movements are required to sell a home and walk away scott free, what it takes to profit from a real-estate transaction, and what happens when the market moves against you. The experts don't like to talk about the negatives (of late; 24 months ago it was all negatives), and that's a shame, because if you only follow them, you only learn a small part of what real-estate can do to someone's finances if they're not careful.

[marks_28]

What do you mean selling an asset that can pay for a transfer tax?

If I were to move to a new city and rent a home for University, I would need to come up with $20k. That is a huge stretch for most students. And then another when I move back home. And then another when I move into another place.

If I were moving now, I would sell my property and potentially buy a new one. Should that be the case, I could pay for the PTT from the proceeds of my property sale.

For first time buyers, there are exemptions to the PTT to help them get in the market.

[Mike K.]

We'd break it down for you to repay over 25 years though. You don't have to pay it all immediately, don't worry.

[marks_28]

Ah don’t worry, I’d only have been $100k in debt before I bought my first property.

So that is fine, but households with $500k of annual income and a $1.5M house, mortgage free, need to have $500 of their property tax paid for by taxpayers?

[rjag]

Why are some people so eager to pay more tax?

 

I dont have a $500k annual income, my mortgage is paid because I and my wife worked 2 jobs each, took in boarders and busted our butts to be mortgage free. AND YOU IMPLY LIKE THATS A BAD THING????

 

Churchill was right ""Socialism is a philosophy of failure, the creed of ignorance and the gospel of envy, its inherent virtue is the equal sharing of misery."

[Victoria Watcher]

Ah don’t worry, I’d only have been $100k in debt before I bought my first property.

So that is fine, but households with $500k of annual income and a $1.5M house, mortgage free, need to have $500 of their property tax paid for by taxpayers?

 

YES.  You know how high their property taxes are?  And generally the more expensive the home, the less municipal services the property uses too.  Yet they pay the highest share.

Edited by Victoria Watcher, 10 January 2022 - 05:33 PM.

[dasmo]

Charging more tax is NOT the solution to anything. Maybe they could start by not sending letters to everyone telling them there house is worth $200,000 more than last year? That's a low hanging fruit. Assessment is supposed to be just for tax purposes right? Make it an index value then. 

[Mike K.]

Ah don’t worry, I’d only have been $100k in debt before I bought my first property.

 

Not worried at all. And the government will be forever grateful to you. Don't you want the government to be forever grateful to you?

 

But now you're getting an idea of what homeowners face, when they move. Every hop and skip, they pay that tax. The government doesn't care if you're a first-time buyer either, unless you buy the cheapest real-estate on the market. If you buy a home for over $525,000 (which is literally every home on the south Island), you're paying that PTT!

 

Even if you just lost $30,000 because you and your partner split, and you had to sell your 2BR+den condo the bank wouldn't let you carry by yourself, your next place will still carry a PTT, regardless of its value since you're no longer a first-time buyer. Now you're $30,000 in the red, plus you pay PTT to buy your new bachelor unit.

 

If you get a job in Nanaimo two years later, and have to sell your new bachelor unit at a loss of $15,000, you'll still pay the PTT on your new place. And no, you won't want to rent, because you already lost $30,000 after your first sale, paid PTT for your second home, lost $15,000 on your second sale, and rent means you'll lose another $15,000 in a year. So off you go, paying PTT for a third time to buy back into the market.

[Mike K.]

Charging more tax is NOT the solution to anything. Maybe they could start by not sending letters to everyone telling them there house is worth $200,000 more than last year? That's a low hanging fruit. Assessment is supposed to be just for tax purposes right? Make it an index value then. 

 

But it's the only way for aspiring political hopefuls who are real-estate experts to be divisive without looking divisive.

 

One key to political success is to vilify your political opposition, and promise to impose taxes on them.

[rjag]

A month ago I was an evil car driver, last week I was a racist for owning a SFD, this week I’m stealing from poor renters…. FFS does the TV/bike folks sit in their parent’s basement dreaming up these bizarre concepts to justify why they’re so miserable therefore everyone else has to be miserable?

[rjag]

But it's the only way for aspiring political hopefuls who are real-estate experts to be divisive without looking divisive.

One key to political success is to vilify your political opposition, and promise to impose taxes on them.

I can think of one in particular Saanich resident that is just itching to lecture us all on how we should live in our homes! Heaven forbid if he gets in!

[A Girl is No one]

Its all semantics. The H.O.G. is applied to the vast majority of homes. Therefore its not really a grant but the actual baseline. Any commercial operation such as a rental property or a 2nd home is charged a premium.

Exactly!

[Nparker]

...FFS do the TV/bike folks sit in their parent’s basements dreaming up these bizarre concepts to justify why they’re so miserable therefore everyone else has to be miserable?

Congratulations - you've just defined socialism.

[marks_28]

Why are some people so eager to pay more tax?

 

I dont have a $500k annual income, my mortgage is paid because I and my wife worked 2 jobs each, took in boarders and busted our butts to be mortgage free. AND YOU IMPLY LIKE THATS A BAD THING????

 

That isn't a bad thing at all, that took a lot of hard work, and should be commended. All I am trying to say is there are people who really, really do not need a government handout, yet taking that away seems like the worst thing the government could do.

[marks_28]

Not worried at all. And the government will be forever grateful to you. Don't you want the government to be forever grateful to you?

 

But now you're getting an idea of what homeowners face, when they move. Every hop and skip, they pay that tax. The government doesn't care if you're a first-time buyer either, unless you buy the cheapest real-estate on the market. If you buy a home for over $525,000 (which is literally every home on the south Island), you're paying that PTT!

 

Even if you just lost $30,000 because you and your partner split, and you had to sell your 2BR+den condo the bank wouldn't let you carry by yourself, your next place will still carry a PTT, regardless of its value since you're no longer a first-time buyer. Now you're $30,000 in the red, plus you pay PTT to buy your new bachelor unit.

 

If you get a job in Nanaimo two years later, and have to sell your new bachelor unit at a loss of $15,000, you'll still pay the PTT on your new place. And no, you won't want to rent, because you already lost $30,000 after your first sale, paid PTT for your second home, lost $15,000 on your second sale, and rent means you'll lose another $15,000 in a year. So off you go, paying PTT for a third time to buy back into the market.

 

Look, I can tell you really don't like this tax. And that is okay! But it is also possible to say the PTT is a tax grab AND recognize that the HoG is benefitting the wrong set of individuals. They can be mutually exclusive. Maybe you can scrap the HoG, put the $1 billion to a better use elsewhere, and look for ways to improve the PTT. Raise the minimum amount to $750k for first time buyers?

 

And yeah, that is an unfortunate set of events for Joe Homebuyer in your scenario. Luckily there is not a real world transfer tax on renting, so maybe he can do that after him and his partner split. Is it a good idea to buy another property immediately after the fact? Maybe renting for a bit is prudent. There is a decent chance the property has gone up in value during that time, which can help ease the cost of any future PTT and legal costs of the breakup. But buying real estate has its risks, as Joe became well aware of. There are benefits sure, but it isn't a risk free investment, even in Victoria. 

[Mike K.]

It's not a handout, though. It's just described in a way that makes it look like a handout.

 

The reason why renters indirectly pay a higher property tax through their rent is because their landlord holds the property as an investment and as a business venture, so the tax is higher. The landlord chooses to carry over their property tax burden to the tenants to pay, but the tax is destined for them for their investment property. If a landlord passes that cost on to his or her tenants, their profit margin increases.

 

Here's a handy calculator that helps describe some of the costs associated with moving/selling as a homeowner: https://www.opendoor...sale-calculator

 

If you happen to have to sell during a relatively flat market period, or during a declining market, you're going to be underwater very quickly. You need a half-decent period of appreciation to stay above water, when you sell.

[Mike K.]

Look, I can tell you really don't like this tax. And that is okay! But it is also possible to say the PTT is a tax grab AND recognize that the HoG is benefitting the wrong set of individuals. They can be mutually exclusive. Maybe you can scrap the HoG, put the $1 billion to a better use elsewhere, and look for ways to improve the PTT. Raise the minimum amount to $750k for first time buyers?

 

And yeah, that is an unfortunate set of events for Joe Homebuyer in your scenario. Luckily there is not a real world transfer tax on renting, so maybe he can do that after him and his partner split. Is it a good idea to buy another property immediately after the fact? Maybe renting for a bit is prudent. There is a decent chance the property has gone up in value during that time, which can help ease the cost of any future PTT and legal costs of the breakup. But buying real estate has its risks, as Joe became well aware of. There are benefits sure, but it isn't a risk free investment, even in Victoria. 

 

I don't think you've really looked into the home buying and home selling process, from a cost perspective.

 

You speak of renting for a little bit once you sell. Sure, you can do that, but your bank is going to charge you thousands of dollars if you're not porting your mortgage over to a new property, because your mortgage is an agreement with your bank to pay them $x in interest over $x period of time. Most mortgages are very rigid, and the bank loves it when you decide to sell before your term expires, then rent. Less rigid mortgages have higher interest rates or much higher down payment requirements, or both, so the choice is yours.

 

But now you're not only paying banking fees to end your mortgage, you're also paying to rent and have a 1 year lease, and eventually you'll pay more PTT to move into your new place.