1003 replies to this topic

[spanky123]

In the example above, where are you getting the mortgage rate? And whom is it available to? Will a particular person qualify for a $300,000 mortgage?

And what are the condo fees? What’s the insurance? And what’s the tax burden? How old is the condo? Does it require upgrades? Is a levy coming from the strata?

 

There is insurance, utilities, property tax, and maintenance which all have to be factored into ownership costs.

[GetLisaSomeHelps]

To illustrate my point. Here are two basically identical condos in the Janion. 1 for rent, 1 for sale.

The rental is $1,325 per month. To buy it is $330,000. Even with 5% down payment, your monthly mortgage payment combined with condo fees are going to be cheaper than renting.

https://www.usedvict...t_36439616.lite

https://www.realtor....ctoria-downtown

 

Huh? The mortgage payment on a 330k purchase with 5% down alone will be more than $1325....

[GetLisaSomeHelps]

The suggestion is that the Feds will remove the capital gains exemption on the sale of a primary residence. 

 

I could see a sliding scale coming into place, but the straight up removal will result in a civil war.

[GetLisaSomeHelps]

Renting normally = better cash flow but worse than owning when it comes to your net worth over the long-term (unless you are investing the cash flow savings into higher returning investments, which is unlikely for a number of reasons)

[spanky123]

I could see a sliding scale coming into place, but the straight up removal will result in a civil war.

 

Will also result in higher housing prices as it would dampen supply.

[GetLisaSomeHelps]

Will also result in higher housing prices as it would dampen supply.

 

100%. instead of selling their condo to any prospective first time buyers, many owners will simply refinance & rent out their unit to avoid the capital gain when moving up the property ladder.

[VIResident]

100%. instead of selling their condo to any prospective first time buyers, many owners will simply refinance & rent out their unit to avoid the capital gain when moving up the property ladder.

 

And there it is.  Creates more 'rentals', affordable and otherwise.   Full stop. 

[VIResident]

Will also result in higher housing prices as it would dampen supply.

 

This too.  Who benefits from higher housing prices and reduced supply = increasing demand?

Win. Win.  More rentals, higher 'profits' from increased property values due to less supply.  Sure, a tax in one hand but more money in the long run in the other hand. 

[spanky123]

100%. instead of selling their condo to any prospective first time buyers, many owners will simply refinance & rent out their unit to avoid the capital gain when moving up the property ladder.

 

I don't agree with that assessment. Getting into the rental business is not the intention of most homeowners. 

 

What will happen with a capital gains tax is that it will make it less economical for people to upgrade their homes (ie by the time you pay the CRA and the realtor you have less funds available to upgrade) so they will be more likely to stay in place longer. That means fewer homes being sold and less supply. 

[lanforod]

It'll also mean a lot of people work till they are much older.

[GetLisaSomeHelps]

I don't agree with that assessment. Getting into the rental business is not the intention of most homeowners. 

 

What will happen with a capital gains tax is that it will make it less economical for people to upgrade their homes (ie by the time you pay the CRA and the realtor you have less funds available to upgrade) so they will be more likely to stay in place longer. That means fewer homes being sold and less supply. 

 

That's fair. Maybe a combination of the 2 but in hindsight it makes sense that the large majority would end up staying in the same home longer.

[LJ]

I don't agree with that assessment. Getting into the rental business is not the intention of most homeowners. 

 

What will happen with a capital gains tax is that it will make it less economical for people to upgrade their homes (ie by the time you pay the CRA and the realtor you have less funds available to upgrade) so they will be more likely to stay in place longer. That means fewer homes being sold and less supply. 

And less property transfer tax for the province.

[Victoria Watcher]

Canada will start taxing foreign nationals who use Canadian homes to park their wealth, according to the federal government’s fiscal update released on Monday.

 

“Too often, the price of homes is out of reach for Canadians, in particular for those looking to buy their first home,” the update reads. “Speculative demand from foreign, non-resident investors contributes to unaffordable housing prices for many Canadians. To help make the housing market more secure and affordable for Canadians, the government is committed to ensuring that foreign, non-resident owners, who simply use Canada as a place to passively store their wealth in housing, pay their fair share.”

 

“The government will take steps over the coming year to implement a national, tax-based measure targeting the unproductive use of domestic housing that is owned by non-resident, non-Canadians, which removes these assets from the domestic housing supply,” the update adds.

 

 

https://thinkpol.ca/...ign-homeowners/

Edited by Victoria Watcher, 30 November 2020 - 06:11 PM.

[spanky123]

^ So BC tax on top of Federal tax?

[Nparker]

I've just had the "pleasure" of once again assuring Big Brother that I am the owner and occupier of my home.    The Speculation Tax exemption declaration may be the most irritating bit of bureaucracy I have to endure each year. 

And just like clockwork, my speculation tax declaration notice arrived today. Remind me again how this is creating more affordable housing in BC?

[Matt R.]

Oh sweet. This year I won’t get one at all! #exempt

Matt.

[Victoria Watcher]

On the third anniversary of B.C.’s adoption of a vacant home and speculation tax, the province says the tax has turned empty units into homes.

 

But experts remain divided on its benefits and note it’s hard to isolate the tax’s exact effect on the supply and market of housing and rental stock.

 

The B.C. Ministry of Finance, in a 22-page technical briefing to mayors made public Wednesday, points to Canada Mortgage Housing Corp. figures that it says shows the tax “helped” add 18,000 units to the long-term rental market in Greater Vancouver in 2019 and 2020 as investors repurposed their properties toward long-term rental and added newly completed units to the market.

 

_____________________________________________

 

Pavlov said that the speculation and vacancy tax and other NDP housing measures are choking new housing starts, pointing to a recent drop in building permits in the Metro area.

 

Pavlov says the tax can devalue a new housing asset because it reduces flexibility in its use and can also reduce other government revenues, such as from the property transfer tax.

 

“The way to increase affordability is to increase supply,” said Pavlov, who specializes in risk management for real estate investments, mortgages and financial derivatives.

 

The latest CMHC rental market report notes that a combination of “market forces and housing policies from different levels of government” have led property owners to convert units from existing uses to long-term rental, creating new rental supply. The CMHC report notes that in 2020, 3,631 of the 7,137 condo units added to the rental market were conversions of existing units to long-term rental.

 

 

 

https://www.timescol...ference-4757374

[Sparky]

Meanwhile our family’s winter swampland/summer recreational vacant lot which can never be built on, continues to incur a speculation tax.

It’s been in the family for 60 plus years. You think we would have speculated before now.

[A Girl is No one]

Carole James’ cottage is exempt from it….

[Nparker]

Carole James’ cottage is exempt from it….

Shocking (said no one).