Real Estate Talks

I believe I am an open minded person and believe in reasonable, balanced and objective approaches to solve problems.  I am definitely opposed to the speculation tax, but think some of the NDPs policies are fair.  

I think that all 3 levels of government and even the Metro Vancouver Region as a whole need to work together to solve the current housing issues.  The fact that prices have escalated quickly and have become unaffordable isn't unique to BC.  However, we apparently do have some acute problems that could be resolved to make life easier for people to live in this region.  

So far the Vocal Minority seem to believe the Speculation Tax is the best solution to our problems, but I haven't heard any sound reasoning about how that can solve the problems in our region, other than "at least its something"

What ideas of thoughts do you have.

Feds:  
Mortgage Stress Test, Shorter Amortization, Higher Downpayment Requirements - I think these are all good policies that have been implemented, although they do have the negative consequence of making it more difficult for first time buyers, these are prudent steps in protecting those same people.

Higher Interest Rates - This is the foundation of our economy - As the Economy improves interest rates rise, to cool the economy and this appears to be working now...unfortunately record low interest rates helped fuel the real estate boom in Canada and perhaps is to broad to have assisted Vancouver.  Given the low interest rates were needed in other parts of the county to help industries survive the fallout of the Financial Crisis.  It fuelled the boom in Vancouver.

Crackdown on Tax Cheats and Money Launderers - This is largely a federal issue and more needs to be done to stop these abuses, period.  Again I believe that making Real Estate Agents the police for money laundering is a huge mistake.  Its a lazy move by the feds, (This was a Harper policy BTW) and they should have at least made this the responsibility of the Banks and Lawyers responsibility not primarily the Sales person's job.  As well a federal agency with the teeth to find and prosecute the cheats is needed.

Pre-sales and contract assignments -  This should be drastically restricted, Contract assignment should be outlawed, while Pre-sales should be restricted and reported...at the very least these should be treated as a completed real estate transaction, with all of the tax implications, PTT, Capital Gains reporting, withholding tax applied, etc.

Restricted use of Corporations to hold residential property - The ability to use corporations to hide ownership, trade shares in real estate and generally cheat the system should be banned.  

Provincial - I'm okay with some of the initiatives like the higher taxes on more expensive properties both PTT and School taxes

Speculation Tax as its is applied doesn't make sense.  Why not have a sliding scale the longer you own a property the less tax you pay.  Or make it a true speculation tax, If you are flipping homes for massive profits, why not apply a PTT to the seller too.  Like a surcharge against the profits of the sale in the first year, which slides lower based on the number of years owned.

I think the Province needs to take responsibility for the mental health crisis as well.  More treatment for the marginalized and drug addicted.  So many homeless or near homeless people have mental health problems that need better care to ensure they are on their meds and have a clean bed etc.  I think if we found a way to care for people it could end up saving a lot of money because these people end up in the hospital with major issues like blood infections, kidney failure, etc.


Municipal - Quicker and less expensive building permits - reduction of red tape
Focus on Municipal issues instead of playing politics e.g. Gregor Robertson is on a crusade to leave his legacy now with new parks, green initiaitive, etc.  All the stuff he didn't dare do while facing a voting public.  Meanwhile costs in the city are skyrocketing for taxes, parking, user fees.  

Development of empty social housing lots.  e.g. city owned lots in yaletown that have been empty for 20 years.  I would say open up the prime spots to market real estate and focus on social housing where its needed.  The current policies of trying to spread social housing to every development seems quite silly, why develop low income housing in the most expensive areas...Use the profit to build more elsewhere.

Also the current transformation of Vancouver has proven disastrous for affordable homes and rentals.  As all of the old houses with one or two affordable basement suites get replaced with expensive townhomes, the supply of cheap rentals is being eradicated.  Again unintended consequences of well intentioned policy to add more housing.  Building of modest rental buildings needs to make economic sense.  Why not allow for larger buildings with rental stock that is affordable.  e.g. The current Grandview Community plans that calls for major arteries to be developed with 4 lot assemblies with 4 story buildings seems like a waste.  Why not move to full block buildings that are 6 - 8 stories.  This would maximize the limited space with as much affordable rental stock as possible.  


I'm sure I'm missing a lot...what other ideas are out there.  If you disagree with this thinking, why?  What is a better alternative, Why?  

Agree with everything you have said here.

How about a minimum tax on properties that is punitive yet clawed back based on the required income to own a property.

Something like this:

You own a $5M home in Shaugnessy as a satelite family.  You pay virtually no income tax in Canada or BC because all your money is earned off shore or all your wealth was gained offshore (probably ilicitly).  The province assumes that bought this home on 25% down and have a mortgage of 75% or $3.75M.

Based on the above example - you would require an income of $810K per year to service mortgage payments.  If the person pays income tax in the province like someone who would earn $810K per year, they get charged zero minimum tax.  If they are a poverty family that pays nothing in BC but owns a $5M home (with no income) then we charge them the same tax as someone making $810K per year (approx $130K/year).  If they earn only $150K in BC and pay tax on the $150K, then we hit them with the difference.

This tax can be sliding for people that have owned their home for years/decades to the point it doesn't effect them.  But targets those "satelite" families that have a student owning the home.

This is rough notes - but we have to tax wealth and income.  And offset them so that we aren't double taxing.  The key to me is not to capture an entrepreneur who worked hard in BC, built something, paid tax in BC and now want's to reward them-self with a home and maybe a less taxing lifestyle but to capture people using our housing as a store of wealth without contributing to the city/province/country.

Agree with everything you have said here.

How about a minimum tax on properties that is punitive yet clawed back based on the required income to own a property.

Something like this:

You own a $5M home in Shaugnessy as a satelite family.  You pay virtually no income tax in Canada or BC because all your money is earned off shore or all your wealth was gained offshore (probably ilicitly).  The province assumes that bought this home on 25% down and have a mortgage of 75% or $3.75M.

Based on the above example - you would require an income of $810K per year to service mortgage payments.  If the person pays income tax in the province like someone who would earn $810K per year, they get charged zero minimum tax.  If they are a poverty family that pays nothing in BC but owns a $5M home (with no income) then we charge them the same tax as someone making $810K per year (approx $130K/year).  If they earn only $150K in BC and pay tax on the $150K, then we hit them with the difference.

This tax can be sliding for people that have owned their home for years/decades to the point it doesn't effect them.  But targets those "satelite" families that have a student owning the home.

This is rough notes - but we have to tax wealth and income.  And offset them so that we aren't double taxing.  The key to me is not to capture an entrepreneur who worked hard in BC, built something, paid tax in BC and now want's to reward them-self with a home and maybe a less taxing lifestyle but to capture people using our housing as a store of wealth without contributing to the city/province/country.

Yep that's a good idea and could work...to add to that anyone who owns a property of a certain threshold (and their immediate families) should be disqualified from social programs like welfare, GST Rebates, Pharmacare programs, etc.  If you can afford to live in a mansion, why should you be able to steal from our Social Safety Nets.

Only Canadian citizens buy in metro Vancouver, not landed immigrant. If you aren't willing to become a citizen you're just passing through with no intention of setting up roots in Canada

Only Canadian citizens buy in metro Vancouver, not landed immigrant. If you aren't willing to become a citizen you're just passing through with no intention of setting up roots in Canada

Why Eyes?  Why is this good for our housing market?
I'm willing to listen to the reasons, before I give my reasons why I believe its very bad policy.

Only Canadian citizens buy in metro Vancouver, not landed immigrant. If you aren't willing to become a citizen you're just passing through with no intention of setting up roots in Canada

Why Eyes?  Why is this good for our housing market?
I'm willing to listen to the reasons, before I give my reasons why I believe its very bad policy.

Housing is for security first. Too many foreigners using it as an investment vehicle and manipulating supply. Those investors have no sympathy for the folks that live, work and die here. They care only about money.
And I don't care about shutting out landed immigrant. Too many of those greedy fuckers have that as a way loophole in to our market.

Only Canadian citizens buy in metro Vancouver, not landed immigrant. If you aren't willing to become a citizen you're just passing through with no intention of setting up roots in Canada

Why Eyes?  Why is this good for our housing market?
I'm willing to listen to the reasons, before I give my reasons why I believe its very bad policy.

Housing is for security first. Too many foreigners using it as an investment vehicle and manipulating supply. Those investors have no sympathy for the folks that live, work and die here. They care only about money.
And I don't care about shutting out landed immigrant. Too many of those greedy fuckers have that as a way loophole in to our market.

OK I see why you are saying this
I don't think it would help.  I know someone who lived in Canada for 20 years as a landed immigrant and only got their citizenship when they were leaving Canada for good.   Its far to easy to get a Canadian Citizenship.
First off is this even legal in our trade agreements with other countries?  Who has the jurisdiction to make this law...I don't think the provincial government could legitimately apply this law. Would this apply to all land or just residential homes?  Considering how much commercial real estate is sold to foreign entities, how would this work?
Also on the flip side what about the US people that want to spend summers in BC?  What about the people that come here to legitimately build a life in Canada?  If they live and work here, pay taxes and contribute to society, they shouldn't have to wait a couple years to buy in conjunction with a citizenship. 
On the flip side, I don't think it would be fair to Canadians that they couldn't buy in the US, Australia, Mexico, Europe or any other place if they so choose.
Again this is to general of a policy that hurts far more people than it helps.  If we tighten up our loopholes and force foreigners to pay their share in taxes, than so be it.  If foreigners want to buy and flip pre-sales, I'm not opposed to that, so long as they paid their capital gains tax on the profits.  They also take the risk of losing money on this type of investment.  At some point they are going to lose (we think).  If they want to buy a mansion in Point Grey that their student kids live in, that shouldn't be a problem either.  So long as they pay taxes and are not claiming Welfare and Social Assistance.  
These things are core to a free society and the fundamental values of Canada.  I also think there will be a lot of unintended consequences as well and not to mention its probably already to late for this to work effectively, since so many foreigners already own here.
The fact that we have not applied our laws equally and let cheaters take advantage of our lax rules shouldn't be a reason to block all foreigners from buying in the lower mainland.  Lets start with enforcing our laws, lets get some teeth and hold the cheaters accountable.  If that doesn't work, than maybe more drastic measures could be needed.