Appealing your assessment: a book review
A couple months ago I purchased the book How to successfully appeal your BC Property Assessment and intended to write this article in January which would have been in time to review assessments. Here we are in March, and past the deadline to appeal the assessment, but better late than never.
This book is written by Peter Morris and Tim Down – both of whom have extensive experience on the real estate and appraisal side – and purports to provide a guide to appealing your property assessments in order to lower it and thus save money on your property taxes.
The authors give some interesting background on how BC Assessments are created (mostly automated) and what thresholds they use for manually reviewing outlying properties. The BC Assessment models produce a range of likely values for your property and their stated goal is to get your property’s value near the bottom of that range. There is also a pretty decent explanation of how assessment values are connected to taxes, however I wish they spent a bit more time dispelling the widespread misconception that an increasing assessment means taxes will increase by a proportional amount and vice versa.
BC Assessment’s stated goal is to estimate the market value of your property which is defined as “the most probable sale price of a property in terms of money in a competitive and open market, assuming that the buyer and seller are acting prudently and knowledgeably allowing for sufficient time for the sale, and assuming that the transaction is not affected by undue pressures”. The authors state that your goal is to poke holes into this argument, by showing that comparative sales that were used to value your property were either not sold under the above conditions (perhaps someone paid over market) or are not comparable to yours and should be adjusted in order to make the comparison more fair.
This is a very quick book to read. I started into it partway through a ferry ride after stuffing my face at the lounge and finished it before the ship docked at the other side. That briefness is generally a good thing, since the book dispenses with superfluous background and details and generally sticks to the point however I think it would be a lot more usable with more worked examples of the basic comparison based appraisal techniques they are teaching.
I found it useful to get a description of how the appeals process works, but many of their points stress the importance of calm and logical presentation of your case during the in-person hearing in order to contrast with most appellants that are none of these things and get the appeals board on your side. Good advice, but I think this is a side issue to having a strong factual reason why the assessment is actually too high. The point is not to persuade them of some weak argument through slick negotiating.
And that is the primary weakness of the book. Not enough time is spent on discussing whether an appeal is actually worth it. They talk about making a case that your roof needs replacing, and thus the assessors assumption that the house is in well maintained shape is incorrect. But let’s say that is the case and you are successful in taking the $10,000 for a new roof off your assessment. Depending on your municipal mill rate that will translate to perhaps $70 less in property taxes for a brief time before the roof is repaired. Doesn’t seem worth the hassle. And do you really want to stand in front of a panel arguing about how crappy your house is?
There are fundamentally two types of assessment errors: temporal, and structural. A temporal error might be if a couple comparative properties sell for over market value due to an overheated market and they drag up your assessment. You could appeal that, but realistically you won’t be able to drop your assessment a lot and next year they will use updated sales and it will correct itself.
Structural problems, or a fundamental error in what they believe are the characteristics of your house versus reality, are enduring and are generally worth correcting. For example last year I looked up our house on eValueBC and determined that the floor area they had listed was too high. I called them up and had it corrected without an appeal. That lowered my assessment, reduced my taxes, and will keep them lower in perpetuity. The authors give an example of another structural problem for a unique property that had an ocean view but no longer does due to tree growth. In that case the savings might be substantial.
To help correct structural errors, it would be nice if BC Assessment was a bit more transparent about the factors that were taken into account for your property (quiet road, view, better than average condition, cul de sac, etc). That would enable people to more easily verify whether the estimate was fair.
In the end I didn’t find that much of value in this book. The BC Assessment website itself has a good guide that covers pretty much all of the same points and there aren’t any secret tricks in the book that I think would increase your chances of success at an appeal. What you have to remember is that BC Assessment is not the enemy, they benefit from having accurate assessments and are only too happy to have you do the legwork to improve their data. If you actually have a case you will likely be successful.
Has anyone here successfully or unsuccessfully appealed their assessment? What argument did you use?
New post: https://househuntvictoria.ca/latest
“Local Fool”….I actually wouldn’t participate in a bidding war in this climate of uncertainty. But having said that, it would depend on one’s age. If I were younger, I wouldn’t hesitate so much (without being totally silly of course). There are so many factors. For example: If you are going in with a huge down payment,that would make a difference. If one needed a place and simply wanted to get on with life, that would make a difference.
Under those circumstances, I wouldn’t want to second guess the future prices and be left out. A few years ago, I told a friend of mine in Vancouver that they were crazy not to sell their small bungalow house when they were offered a million dollars. They were recently offered close to $3million for the house. I was proved wrong.
I believe that it’s easy to get left out of the housing market completely and so it is not worth gambling. I still believe that Victoria is amazing value. (Sorry to anger a few people with that statement:)
Virtually any house will sell relatively fast in almost any market, if the price is right. But if you are actually participating in bidding wars at this stage of the game, certainly no one can accuse of you of not walking the talk.
Interesting that we just lost another chance to buy a house which sold with multiple offers and over the asking price. (That’s four now.) The lower range is selling fast when priced right.
Anyone know when this beneficial ownership registry is actually supposed to be created? https://www.thestar.com/vancouver/2019/03/10/who-owns-vancouvers-multimillion-dollar-properties-if-this-new-registry-goes-ahead-the-owners-will-no-longer-be-secret.html
Going to be an investigative journalist goldmine
Formafist has just posted a rather amusing but interesting video on the sudden flood of lux properties renting to students in Vancouver – as he frames it, the owners of these homes may feel that they don’t have a choice.
I strongly suspect the spec and vacant homes tax together is the driver given the sudden change of behaviour – it’s not like the market hasn’t been sagging for the last year and a half. But now if they keep it empty, they may be too clamped by capital controls in China to pay those taxes…a policy success story upcoming, perhaps? Who knows.
In any case, it’s nice to see some accommodations opening up, could be interesting to see the vacancy data over the next 3-6 months.
https://www.youtube.com/watch?v=Ojh1Zd1NGdA&
Just an FYI Leo is a human, not a cyber god.
My point is the headline that you quoted “800 “Spec tax specials” mansions listed for rent in Vancouver for cheap” isn’t supported by facts. Then you refer to it again seemingly as fact when you say “Why all the full [spec] house rentals?”. If some random poster here said it, I wouldn’t give it a second thought. But my experience is that you don’t say something unless you’ve researched it and are prepared to back it up. So I guess I hold you to a higher standard.
Are you standing by that statement that there are are currently “800 spec tax mansions listed for rent in Vancouver for cheap?”
Very curious what those two lots they couldn’t sell on Kenmore will sell for once the houses are complete.
Hard to say. It did sell $4K above assessment. But it sure needs a lot of interior updates. To me, Feltham is one of the busier roads in GH.
@Leo, A problem with filling out the form and feeling unsettled about it all. You really want to answer with the ones that don’t expand into new questions. Now it was a rather simple answer of “nothing happening here.” I didn’t really have a point beyond the potential stress of even the prospect of getting screwed when I was in the middle of screwing myself. Sure I don’t like the tax but I would hate it less if they simply called it the multiple property tax. Of which there are exceptions (subject to change) sure but call it like it is.
What’s the problem there? House is rented out, no spec tax.
Land that is being built on: no spec tax.
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax/exemptions-speculation-and-vacancy-tax/land-under-development
So what is your argument? That the listings don’t exist, or that it is a normal level of listings, or that the flood in new listings is due to something else? Feel free to dig through the rental listings yourself if you doubt the numbers. I don’t see any particular reason to doubt the assertion that the listings are higher than usual. The source is the CEO of the BC Non Profit Housing Association.
You are confusing the Vancouver vacancy tax with the speculation tax.
@ Introvert
So I guess a similar house on a less busy street compared to feltham would sell for like 30 – 50k more eh?
US taxpayers pay less in total because they get to claim property taxes against their state and federal income tax. This isn’t available to a non-resident foreign owner unless they have taxable local income.
The mechanism is different but the outcome is similar.
In regards to the spec tax, I’m glad I was done this building adventure. At one point I had sold my principal residence, was renting, owned a house I was renting out and owned the land I was building on. THAT would have been a problem…. as it stands I just about missed the thing because the letters had gone to the house we were renting and that address is long past the mail forwarding…. Thanks again HHV for keeping me on top of these things. An email to actually request the letter (I guess I’m not that rebellious), and thankfully a simple exercise.
Caveat,
If you buy a condo in Arizona for holiday use, I’m assuming you have no problem with Arizona charging you a similar spec tax, because you’re Canadian, 2% of value of your condo per year, unless you’ve rented it out on a lease of at least 6 months. (btw, They can’t – and don’t – charge Canadians more than Americans, because of NAFTA, but that hasn’t stopped our BC govt that will ultimately lose the NAFTA lawsuit and have to repay it, according to experts).
As far as 737 princess street goes, the comments here are sobering and something to take seriously. Has anyone been inside? Renovated and gutted…..It might make a relatively inexpensive workshop for someone. (Someone who makes guitars for example.)
I was hoping I might get some info on the bones of the place. It doesn’t make sense to go the tenant route. But a workshop for a craftsman or an artist workshop/Gallery might be very interesting.
I like to look further down the road than the immediate situation. Things can change in a city and areas can go through dramatic evolution. It is so close to downtown.
I find it interesting that a lot of the time where I see opportunity……. others only see obstacles. It’s human nature I guess. Having said that, there is a point where some things are better passed over. That might be the case for the house on Princess street.
Why are you now stating it as a fact that (m)any people are renting out homes because of spec tax? That article you linked to doesn’t provide any data at all in it. They found an “author” who says he’s seen a lot of listings of rentals and the best he could come up with is “it’s likely the tax would explain what he’s found”.
Would you accept that as convincing evidence if someone here made a post like that?
The vacancy rate in Vancouver is even lower 0.8% than before the vacancy tax 0.9% so what data there is doesn’t support your statement. Even the Cotu if Vancouver only claims 112 rentals created on year 2 of the tax with no data if they are year around long term rentals or not.
So why aren’t they? Why all the full house rentals if they could just rent out one room?
Yeah I’m alright with it being somewhat difficult to keep a huge empty place on prime Vancouver land.
I have to pay tax this year. I feel like the peasants and serfs are demonizing me.
Wah wah wah!
“So…what’s the story on it? And what’s wrong with it?”
What’s wrong with 737 Princess Ave? For starters, it’s on a 2000 square foot lot, which means it has no yard. Not that you’d want a yard, since your neighbors include Target Self Storage, Tommy’s Auto Upholstery and Ferny’s Autobody to name a few. Oh the smell of fresh bondo in the morning.
Aside from the fact that it’s in an industrial zone and you’ll be huffing glue and paint fumes whether you want to or not, it’s a rooming house. In Rock Bay. Guess who lives in rooming houses in Rock Bay? I don’t have a beef with junkies, winos, hobos and prostitutes, but I suspect they aren’t always the easiest tenants.
I wouldn’t call it an amazing investment opportunity…I think you’d have to be a committed, experienced slumlord to take that one on.
Well this is very entertaining. Is the influx of “fun and wacky” student renters in Vancouver-Quilchena going to cost Andrew Wilkinson his seat? God I hope so. Wonder if this is happening locally… over to craigslist I go!
Sold for $725K. 12 DOM.
Or they can rent out a single room to one person for 6 months (winter), a tiny separate suite could work to avoid spec tax. That’s less trouble than selling, and the “mansion” stays pristine, and it’s good for security to have someone on premises.
btw) 60% of vacant housing units identified in Vancouver vacancy tax are condos, so they aren’t all mansions. Given the City of Vancouver found 985 total empty homes this year, that means about 600 condos and 400 houses. Small numbers compared to the >5k units constructed per year. Yet it allows us to demonize and target people with “pristine mansions”, as well as foreigners, “satellite families” and Albertans,
The lack of interior pictures isn’t helping them, although the interior doesn’t look half bad from previous listings.
I’ve mentioned this property before on the blog. Could be an opportunity there depending on maintenance needs. But with 11 beds you will need to devote significant time to tenant management + live on the property. That’s no easy side gig.
I suspect it’s just an intermediate step. How big is the rental market for $13,000/month mansions? Very small. So many will not be able to rent, and others will rent to groups of students like in the story. And what costs more? Spec tax or the wear and tear from 10 students living in your mansion?
I bet most of these places will end up sold eventually. The owners are just trying to figure out how to make the best of a bad situation. Sell for a big loss, pay 6 figure spec tax bills, or rent out their pristine mansions.
11 bed house for 600k??? Seems like you can get an amazing cap rate for an investment property. What am I missing??
Listed 15 times and sold 4 times since 1998. It also started life as a 3 bed 1 bath, now 11 bed 3 bath.
Let’s say you gotta love landlording.
Damn click bait Leo! $13,000 / month isn’t dirt cheap in my books…. But hey, it’s counter click bait to the tear jerker stories so fair enough.
It’s not all old ladies and cabins with the spec tax.
800 “Spec tax specials” mansions listed for rent in Vancouver for cheap. https://bc.ctvnews.ca/is-this-real-hundreds-of-vancouver-mansions-for-rent-for-cheap-1.4329826
Anyone know what the story about the house at 737 Princess street. It is downtown Victoria and under $600,000.00. It seems like it would be snapped up and yet I’ve seen it listed for ages. Apparently is has been updated. But it sounds chopped up with rooms as rentals. If I was younger, I’d see it as an (((amazing)) investment opportunity for longer term. So…what’s the story on it? And what’s wrong with it? The area surely will become more developed into towers, either office or Condos?
Marko how are things out there right now??
Yes, correct. Thanks for pointing that out.
What I meant was GDP growth was shrinking for the last 3 of 4 quarters, not that it was trending below zero, otherwise technically that would be a recession which we’re not in atm. This is why I said BoC was “behaving as though it was expecting for one to occur” in the penultimate bullet. 🙂
Anyone know what that house on feltham sold for? The on introvert walked by a bunch of times, think it was listed for $759k.
For someone launching a “recession theory”, you should be aware that a recession is typically defined as two consecutive quarters of negative growth. If GDP had indeed shrunk “for the last 3 of 4 quarters”, there would have aready been a recession last year. And there wasn’t.
You should take a mulligan, and have another shot at that one. You could start here, where you’ll see Can GDP growth of +0.3, +0.6, +0.5, and +0.1 in the last four quarters https://tradingeconomics.com/canada/gdp-growth
Local wow you pulled out all the guns for that post. You really are taking your job as king of the bears seriously. Good on you.
Great day to look at houses today. Hope ya got out there
Btw Vancouver and Victoria are not highly Correlated as you have suggested. Check the last 10 years. As been mentioned 3 of the last 4 quarters have not been negative. You really need a fact checker before you post this stuff. :).
Not so. GDP growth was positive in each quarter of 2018
The RBC report didn’t mention multiple owned (vacant) homes as a significant source of new supply. Why?… The numbers tell the story. There are by govt estimates a total of 3,000 second homes in Victoria and we are building 3-5,000 new ones per year. You tell me, how many of those 3,000 second homes do you expect to be freed up with a 0.5% spec tax and a $400k exemption (e.g, $1k tax on a $600k second home) …(maybe 300 freed up, and that’s a one time event, not every year) , and would that be a significant number compared to new build of 3-5000 per year?
Why not just incentivize new building, by less red tape and more flexible zoning? That could change that 3-5000 per year number to 5,000 each year and that would largely solve the supply problem, lower house prices, and we could leave people with their evil second homes in peace.
I guess. Yet none of those things appear to be helping BC’s housing market; in fact the opposite seems to be happening. Why might this be? It’s actually pretty simple.
Canadian GDP has shrunk for the last 3 out of 4 quarters,
Insolvencies, while low, are now beginning to rise,
Credit markets in Canada are falling to levels of growth not seen since just after the huge crash in ’81,
Chinese capital globally is disappearing, their economy is also buckling under the weight of its own debt,
Auto sales in Canada are continuing to shrink,
Sales volumes in Vancouver detached have shrunk to levels not seen since 1985, when the population of the area was 50% less than it is today,
Condo sales, thought to be more durable due to large volumes of entry level buyers, are dropping precipitously just as the detached segment did,
History indicates repeatedly that employment levels and wage growth are usually strongest right before a recession – and you and I can see the BoC is behaving as though it’s expecting a recession to occur,
We know Vancouver and Victoria’s markets are highly correlated:
Having said that, I wouldn’t call it a “crash theory” either. I’d be more inclined to call it a “housing led recession theory”, with everything that entails.
Leo all I am saying is it does not support the crash theory.
Rising employment
Stable rates
Growing wages
Hey Patrick did the RBC report discuss how many homeowners own multiple homes? Do they even consider it as being a factor? I think the multiple homes ownership is a significant and largely forgotten factor across the country.
That’s just the City of Victoria. The metro area had a population of well over 100,000. Anyway, more to the point is that metro Vancouver detached houses were still affordable when the population was well over a million, many times today’s population of metro Victoria.
Don’t you find it interesting that most Canadian cities saw a big decline in affordability around the same time, not when they reached a given population?
http://www.bcstats.gov.bc.ca/StatisticsBySubject/Census/MunicipalPopulations.aspx
In the 1960’s, Victoria was a city of 55,000.
Also, strata title wasn’t a thing until the late 1960’s.
Yeah good employment report. Twice as many jobs created as the US! But careful. Remember you were criticizing others for seeing any news as bearish for housing it seems that you are doing the same (more jobs good for housing, less jobs means rates won’t rise, also good for housing).
77 single family freehold properties sold under $600k last year in the core.
Cheapest was $425,000 for a teardown on Price: http://www.pembertonholmes.com/listing/View-Royal-BC/5-Price-Rd/494e
The cheapest livable place was $440,000 for 593 sqft (!) http://listings.dfh.ca/listing/Esquimalt-BC/1201-Lyall-St/4lho
8 were under $500k
Yeah the last place on Jackson had only 1100 sqft and half the lot size and sold for $595k (after being listed at $695k).
So an extra $63k for double the lot and 800sqft extra space? Seems reasonable and perhaps indicative that the market has weakened a bit further.
67 single family sales in the last 6 months in the core
Same period a year ago was 106 sales. Level of listings is about the same (around 100 active every month)
In core Victoria a lot of the houses are literally from your parents, grandparents, or great grandparents era and they are selling for a lot more now. Even adjusted for inflation.
We are told by some posters here that the housing problem is due to a “bubble” and a “collective mania”. A new RBC Economics report (feb 28, 2019) disputes that, and says that there isn’t a home ownership problem in Canada. And the best measure to provide housing is more building, and govt efforts should be focused on reducing red tape for builders. They say that without increases in building, no govt measures taken will reduce prices. The main point being high housing prices are a symptom and the cause is low supply.
http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/Home_Ownership_Feb2019.pdf
RBC Economics: “We take issue with the notion that Canada has a home ownership problem in the first place….And the proportion of all Canadian households who own a home is one of the highest among advanced economies….Even Toronto and Vancouver—the least affordable markets in the country—rank near the top of global cities on home ownership and have home ownership rates that are about double cities like Paris and Berlin…At the very least, the collective goal should be to remove barriers (regulatory, administrative or otherwise) inhibiting home developers and builders to respond quickly to the demand for new housing …If Minister Morneau’s heart is set on doing something on housing in his budget next month, he would do well to focus on supply issues and let the home ownership rate fall where it may.”
In the 1960’s the entry level property was a house. Today the entry level property is much more likely to be a townhouse or condo. And in real terms today’s townhouse or condo is more expensive than the 1960’s house was then. Not to mention that the same 1960’s house is far more expensive today in real terms.
Good discussion on the GST. Thanks for all the input and thoughts.
From the individual builder perspective it looks like they would need to live in it and not have claimed any tax credits in order to not pay GST on “fair market value”. I was wrong….
@dasmo – the answer is yes, but they claim the GST paid to build it. My prior post, (for those that have actually read it) says ( read the following as Hudson builder being the owner, residential complex is what got built):
“1. If a builder constructs or substantially renovates a residential complex that is:
a single-unit residential complex,
a residential condominium unit, or
a multiple-unit residential complex,
and subsequently supplies
the single-unit residential complex,
the residential condominium unit, or
a residential unit in the multiple-unit residential complex
by way of lease, licence or similar arrangement for use by an individual as a place of residence, the builder is deemed to have sold and repurchased (i.e., self-supplied) the residential complex at its fair market value generally when the unit is first rented. In the case of a multiple-unit residential complex, such as an apartment building, the builder is treated as having sold and repurchased the whole of the residential complex, i.e., the whole apartment building, at its fair market value generally when the first unit is first rented.”
Therefore they pay GST on the FMV of the residential portion, whatever that is. CRA will fight FMV that are too low. Must be in a range that is close to market value.
The commercial part of a building is not disposed of since it is not residential rent and is a taxable supply when sold. Only the long term rental portion is a self supply under the rules. Similarly, had they constructed a hotel or Air BNB they would not have supplied long term residential rental complex that is exempt and would not have a self supply, just claim the GST paid and charge GST on the short term rentals. But if they rent it to individuals under long term (30 day) rentals, they pay GST on FMV at the time of first rent.
I know they got professional advice on this.
When millennials refer to their boomer parents or grandparents having it so much easier to afford a house, it should be pointed out that average houses are bigger and better now.
Nowadays, many people consider a 1,600 sq ft home to be tear down “bulldozer bait”. But 1,600sq ft was average size in 1967 (in USA) and now average is 2,700sq.ft.
Also, home ownership rates were lower back then compared to today, and that wasn’t called a housing crisis. More people rented.
https://www.zerohedge.com/news/2019-03-08/new-houses-are-getting-smaller-theyre-still-much-larger-what-your-grandparents-had
Note: This is a US article (and US data throughout), but Canada average house sizes have also increased, though not as much.
“In the fifty years from 1967 to 2017, the average size of new houses increased by two-thirds (67 percent) from 1,570 to 2,631 square feet. At the same time, the quality of housing also increased substantially in everything from insulation, to roofing materials, to windows, and to the size and availability of garages.”
Ok you got me curious inreallove. After reading some on the self supply topic (I’m argumentative for fun but it doesn’t mean I don’t listen). Does that mean the builders of the Hudson (the rentals) has to have these buildings assessed and pay GST on the fair market value upon competition?
Good read!
Realtors warn that if housing market collapses everyone could one day afford house
https://www.thebeaverton.com/2017/08/realtors-warn-housing-market-collapses-everyone-one-day-afford-house/
Lol someone pee in your cornflakes this morning. Sorry
Local and I have been bantering for years. Take a chill pill no one is evil.
Gwac … i know accessment is B.S … dont point out people for cherry picking facts …whether bears or bulls.. both sides know a good deal when it is obvious.. market makes it values heard … claiming every one is bearish and evil because they go against your values is just more BS .. dont get ticked off because people called you out on it
Jamal as I have stated numerous times. Individual assessment are garbage either over or under. Average gets rid of the noise and is useful at giving market direction.
We are 5% over right now. What happens in the following months is something to watch
But yes, consult a pro not me! As you can see from the pro there are complexities beyond the simplicity. So you are right too inreallove. 🙂
Below (one link, one latest post).
The builder being individual is in the last post below.
The INDIVIDUAL builder who builds a residence must live in 50% or more of the building after construction not to have a self supply. Any other builder (corp, partnerhip, jv) or if you rent it have no such rule. Hence self supply applies. Why would I let a builder build a house and rent it to avoid GST on purchase when anyone else who purchases (like Marco) pays GST and gets new housing rebate? Hence the complicated self – supply rules were invented.
The self supply rules are in the link but you have to read through them, Or get professional advice. Sorta like asking why is buying candy subject to GST – only because it is NOT exempted. Same here.
You have to be careful in the tax world, being one thing or another (like spec tax) sometimes catches you. Do not trust the internet.
Doesn’t even go past the Malahat.
Trust me I can tell you work in the industry by the way you just said I’m right.
funny .. cherry pickers picked the property sold over asking .. people then stated the facts of under assessment
trumpian comments of the week .. why not go further out and pick a property in Jordan River… to my understanding, sooke was like the chiliwrack of vancouver .. and i can find lots of property under 375k back then
guess people who pointed out facts are bears
@Dasmo:
Just so you don’t panic, here is a bit more for you. The office is now closed for the weekend.
Personal use by builder
Self-supply rules do not apply
ss 191(5)
The self-supply rules do not apply if the builder is an individual and if, after the construction or substantial renovation of a residential complex or addition to a residential complex is substantially completed, it is used primarily (more than 50%) as the builder’s place of residence (or that of another individual who is a former spouse, a relative or, effective January 1, 2001, a former common-law partner), provided that the builder did not claim any ITCs in respect of the construction or substantial renovation. The residential complex or addition cannot have been used for any other purpose between the time the construction or substantial renovation is substantially completed and the time it is used primarily as the builder’s place of residence.
The builder may trigger the self-supply rules by claiming the available ITCs on the costs of construction or substantial renovation, including those related to the purchase of the land. If a builder has paid tax under the self-supply rules, a new housing rebate may be available under section 256, but only in respect of the amount of tax paid or payable pursuant to the self-supply rules.
“Delta to halt service between Victoria and Seattle at the end of the summer”
https://www.cheknews.ca/delta-to-halt-service-between-victoria-and-seattle-at-the-end-of-the-summer-541345/
I wonder if the NDP/Green – Foreigner Buyer Tax and the Speculation(Wealth) Tax had anything to do with this. With less Americans flying this way?
@Dasmo:
This is GST. I happen to practice in the area, I know you don’t.
Here is a link to the self supply rules so you can argue with them.
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/19-2-3/residential-real-property-deemed-supplies.html
You would similar to one of hundreds of builders (usually in a downturn) getting caught with these rules by converting commercial inventory (unsold houses) to exempt uses (residential property) and without getting professional advice.
Please listen if it matters to you. If you want to argue talk to CRA.
PS – perhaps you are arguing because you built your own house.
Here is your rules from the same site. you should get professional advice.
Overview
A GST/HST new housing rebate is provided for part of the tax paid by an individual who builds or substantially renovates his or her own primary place of residence or that of a relation of the individual or hires another person to do so. The amount of the housing rebate for owner-built homes is calculated on the tax paid for the purchase of land, building materials, construction costs and other improvements for the unit, and depends on the fair market value of the property when the construction or substantial renovation is substantially completed. For a discussion of terms which are used in this section, see Section 19.3, Real Property Rebates.
@inreallove That’s to do with other taxes not GST. GST needs a sale to happen. It’s simple. No need to complicate it. If I make something I don’t need to charge myself GST.
Best start of the year since 1981!!
Wonder how that worked out for 1981…
Forgot, interest rates don’t move.
@ Deryk Houston
#57355
Disagree on what? :S
How can I disagree when you haven’t even made a concise argument.
Price? Yes Sooke has always been cheeper than Victoria, and much cheaper than Vancouver. But that’s “not comparing”, that’s just proximity to amenities, work, recreation… -Life Style/Way of Life!
You still have yet to make a good comparison. As all your comments seem to be all over the place. Your clarification is horrendous. Like your trying to make a point, but not hitting the targe.
What is your focused analogy?
Is it on one, or a combinations of:
Weather,
Price,
Proximity,
The year,
Size,
Amenities,
Parks,
Lakes/Oceans,
General attitude of individual societies.
etc.
The rules and attitudes are different here, obviously. Things today compare to yesterday is, in its self, a whole different story.
You’re almost like that survey that comes out every year that claims Victoria is the worst for crime. They are not factoring a huge amount of details.
So, to me, you should really just stop comparing things that are impossible to compare!
From the CRA website:
“1. If a builder constructs or substantially renovates a residential complex that is:
a single-unit residential complex,
a residential condominium unit, or
a multiple-unit residential complex,
and subsequently supplies
the single-unit residential complex,
the residential condominium unit, or
a residential unit in the multiple-unit residential complex
by way of lease, licence or similar arrangement for use by an individual as a place of residence, the builder is deemed to have sold and repurchased (i.e., self-supplied) the residential complex at its fair market value generally when the unit is first rented. In the case of a multiple-unit residential complex, such as an apartment building, the builder is treated as having sold and repurchased the whole of the residential complex, i.e., the whole apartment building, at its fair market value generally when the first unit is first rented.”
As I stated before, be careful where you get information from.
Thanks Dasmo about thoughts on the GST issue. Thanks also to the post by “Inreallove”. And yes….I totally agree that it is always good to get professional advice to confirm everything. I just wanted to know in general for the time being for quick guidance.
I guess me and “YeahRight” will just have to disagree:)
That’s fine too.
@ Deryk, Another way to frame it is that GST is a sales tax. So if nothing is sold the tax is not applied.
@ Deryk Houston
#57352
Interesting.
But, Vancouver is Vancouver, Victoria is Victoria, and Sooke is Sooke. No comparing other than, of course, prices are cheeper for land vs each other. Other than that the comparing stops.
Did you not factor in Nanaimo? How about Port Hardy? Hell their giving away, basically, free land out east in other provinces.
I really don’t understand your final point.
Stop comparing Apples to Oranges. When you basically comparing where to live by price, not proximity!!!
“YeahRight”: Listen… it’s very simple. We looked at Vancouver five years ago and said….wow! …..Vancouver is so high compared to Victoria or Sooke.
So….We bought the brand new houses in Sooke at $375,000.00 each with a legal suite in each one. People at that time said….OH ….you can’t compare Vancouver to Victoria and Sooke.
Well….. we did! And we made a bundle despite all the naysayers and the Bears.
Vancouver then continued on an upwards climb to historic prices unheard of.
Vancouver…even at todays dropped prices is still way out of whack compared to Victoria or Sooke.
That’s why I still say that I believe that Victoria prices (And Sooke prices by the way) are still quite inexpensive.
That was simply the point I was trying to make.
Lots of things go up with inflation. House prices, rents etc. But not “everything” … one thing stays the same if you own… your mortgage payment. 🙂
Happy househunt everyone!
Globe and Mail:
Bank on the fixed-variable mortgage rate spread at your own peril
“We believe the Bank of Canada has now reached its terminal rate of 1.75 per cent for this expansion.”
If rates don’t drop, they can go horizontal for quite a stretch. In the first half of this decade, they moved sideways for more than four years. That too is variable-rate friendly.
https://outline.com/jMVG2y
Everything goes up Patrick.
It’s called inflation.
Mortgage Rates Heading South Again
With the Bank of Canada seemingly taking rate hikes off the table and GDP down 3 out of the last 4 months, markets are now pricing in a greater probability of a rate cut this year than a rate hike.
https://www.ratespy.com/mortgage-rates-heading-south-again-03078484
And the US today under crony capitalism is better off than it was for its people than during the time of slavery, or during the early 1900s with the garment factory fires and everything else.
Snowed in GH, too. So much sadness and despair.
https://www.cnbc.com/2017/08/09/the-happiest-countries-in-the-world-also-pay-a-lot-in-taxes.html
@Deryk – on the builder turning something into long term rental:
The builder essentially has a disposition for GST (not tax) and must pay the GST at FMV to government. They are also entitled to housing rebate if the price is below maximums. They of course claim the GST on build as a builder but that is almost always less than the GST on the FMV they pay (assuming FMV > [cost of build +land]). It is now exempt as it is long term rents and can be sold GST free assuming it continues to be long – term rent.
The above does not apply to short term rentals since they are NOT GST exempt and there would NOT be a disposition for GST in that case. There is also the issue of income taxes payable which ONLY occurs on the actual disposition, but the builder may have a mixture of business gain and potentially capital gain due to change in property from inventory to capital.
Again, professional advice is recommended rather than using internet forums for advice.
LF, Viola is describing a different graph than your frequently posted Hawk crash graph. You should draw up Violas graph, and try posting that and you’d have an easier time convincing people. Don’t forget the “over the long run it goes up” part of her graph because for the bulls, that’s the best part. 🙂
This is a great slogan that will live on after 20th century communism is but a footnote in history.
The reason it resonates is because it has obvious truth. Not everyone is capable of the same contributions, but everyone has basic needs.
While this particular phrasing is from Marx (translated to English) similar ideas had been expressed centuries before, and indeed this echoes passages in the New Testament.
@ Deryk Houston
#57299
Hate to do this, but…
You were talking about distance to proximity to downtown Victoria vs proximity to downtown Vancouver in a previous comment.
But then you switch to saying you meant Sooke in your ambiguous next comment. Huge, no YUGE!, difference in proximity for comparison.
Either you are confused about time, proximity, and cost of what you are truly trying to convey. Or your trying to skew your point, in your favour, by leaving out the details.
_
Sooke was way off our radar when we were investigating the market from 2005 – 2012.
And today it still would be if we were still looking. It’s like a whole different world in Sooke and really (IMO) shouldn’t be part of the GVA, but unfortunately it is. The commute would still be a factor for us even if there was no traffic.
On that note, just the “tip” of Langford would have been a factor. Our radius was factoring a 1 hour bike ride to downtown Victoria (We try not to use the car as much as possible). But even a car ride in rush times from around the core of Lanford to downtown Victoria would be a big issue for us.
I’m still a little skeptical about the $375K for Sooke even “5 years” ago. But like I mentioned, It’s off our radar.
For the record, I haven’t purposefully misspelled anyone’s name in my life.
My days would be less enjoyable without you Local…Keep on trucking!
Have fun at the open houses this weekend…
Hm. Well, what I was actually intending two things –
_
Historically, you might note I don’t usually focus on employment numbers whether they go up or down, because they’re dependant on other factors I feel are better to watch. IMO, this is especially true here in BC given the composition of our GDP.
As for the graph, I post it for you, Gwac. If you’re saying you don’t want the nostalgia, I won’t continue to remind you of the loss of your friend. You’ll definitely hear more from me on Oz though. Sorry. 🙁
USSR/ Russia – failed democracy crony capitalism is still miles better than Stalin, failed democracy crony capitalism vs Brezhnev is at least a closer contest.
China – the current Communist Party totalitarian dictatorship is much better than earlier versions of the Communist Party totalitarian dictatorship on two important dimensions. (1) While still murderous it is much less murderous than before. (2) On a material basis it is at least improving the life of its citizens.
Some how todays unemployment number is good for your theory. If it would have been negative you would have been on here beating your chest saying look the economy is crashing, than something from Vancouver that is negative, than something from Australia than Hawk`s graph. Oh and than cherry picking a below assessment as the final piece of the show. 🙂
I always see this kind of stuff, and wonder if people actually look at those USSR countries now under capitalism and think about whether they’re better off now? Also, China is still as communist now as Russia ever was, so is it a success?
Okay, so, what am I twisting in your opinion?
Local the dream can never die when you can twist things every which way. 🙂
Says the person who purposefully spells people’s names wrong.
I doubt it’s a sign of anything except for volatility existing amongst a larger trend. The reason I have my doubts that this is some kind of “turnaround” is that the consumer credit cycle in Canada is decidedly winding down in what I believe will be a housing-led recession.
I would never expect to see employment that is nothing but worse month after month after month. You’ll always see upticks, and the largest ones actually tend to occur at the onset of and during a bear market. So, it’s important to watch the other macro indicators in conjunction to get a sense of what kind of trends we’re more likely to see. Right now, most of those are pointing downwards.
Sorry Dasmo….. I’m still not clear on that.
So let’s say I build a house. I do not try and sell it to anyone.
Are you saying that I don’t have to pay any extra GST on the house because I paid the GST on all the materials?
That would seem odd to me because when I “buy” a new house I have to pay GST on the purchase price which includes the builders costs as well as his profit margin.
I’m asking just because I want to understand this. (Not because I think you are wrong.)
Getting worried Josh, Don’t worry April 1st is the day the crash happens. 2 houses for the price of a big Mac in Oakbay no less.
I sleep real good next to my dog. He keeps me warm on these cold nights.
Finding bulldozer bait to espouse the extreme value of Victoria has got to be erksome to the bulls that do it. Keep it up if I helps you sleep I guess.
Wow todays unemployment numbers. Wow I am changing my tune definitely a sign a crash is just around the corner. More jobs bad for housing I got it now. Look out bottom.
I know jobs are a lagging indicator and the crash has already started in Victoria and next month we will loss a million jobs and half will be in Victoria. Victoria will shut down and houses will go for 5 bucks. Happy Friday everyone.
You pay GST when you buy something. Builder already paid GST on everything he bought. Builder would use input tax credits to get that GST back because they would be sending the Gov the GST they collect from the buyer of the house.
Does anyone know what happens if a builder decides to take his property off the market and rent it instead? Does he have to pay the GST portion on the house to the government. I’m not looking for guesses:)
Does anyone know for sure whether the builder would have to pay the GST on his new house before renting it out because he can’t sell it for the price he wants?
Damn you Introvert, stop poking the weather gods. I got snowed on this morning riding to work.
Thank you Sen. Joe McCarthy, have you spotted a communist hiding out on the forum?
I disagree. Barrister is correct. 100M people died under communism. A fact people seem to forget. Some people need to be put in their place.
There’s no need for insults like that, especially in the middle of polite conversation.
I don’t demonize anyone for wanting a second home – a holiday cabin, ski chalet, island getaway – whatever. I also don’t think it is class warfare to make someone pay a bit extra for the privilege of a second home when that second home is located in a city with a housing problem.
Politely – that is BS. A household would have to be truly destitute to avoid paying all our wide ranging taxes like HST, PST, and carbon tax.
Even just for income tax this is not true. Low income folks pay income tax. If you are low income with kids you get more in benefits then you pay in tax. If you are low income with no kids you don’t get most of those benefits and end up paying net tax.
Oh oh – Jerry is going Galt
Fine. Diversity of opinion is great. Just don’t pretend that you need to see some data on the success of the tax, when in fact no data would change your mind.
Viola: Maybe start with redoing high school.
@Barrister Also, re: “time to go back to school” – I think your suggestion lacks specificity. A degree in math would get me nowhere near having such an in=depth (total) understanding of political theory that you appear to possess 😉
@Barrister as a liberal I reserve my right to co-opt whatever principle I fancy, thank you very much!
Viola, you have no idea how hard it is to convince people of that, LOL
@guest_57186
“If it’s the latter…might some of that have happened in Victoria? Juuuust a little bit, maybe? Let’s watch the data unfold over the next several months and find out.”
Sure it’s going down, all of it. But eventually it’ll go up again.
Nothing new or out of the ordinary. Real estate goes up, then down, then up more than down, then down, then up more than down, then down. Over the long run, it goes up. It is too bad for those who have life events that force them to sell when it’s down, but what a great opportunity for others!
Viola P You are not quoting a liberal principle but are directly quoting Marx. That experiment was run repeatedly in the last century and resulted in mountains of dead in over a dozen countries. it has nothing to do with classical liberal doctrine.
Time to go back to school for you.
Vancouver condos appear as though they’re going to be faring much worse than even now – the chart below shows the dramatic spike in inventory, and that’s excluding the 40,000 units that are going to be coming online soon.
:
Was it because “everyone wanted to live here”, but now they don’t? Or was it because everyone wanted to chase a rising asset and now they see the gig is up?
If it’s the latter…might some of that have happened in Victoria? Juuuust a little bit, maybe? Let’s watch the data unfold over the next several months and find out.
😛
From the G&M article:
Funny how the industry experts are great at isolating “a host of factors”, except for the one glaring factor that’s actually the reason for the nosedive.
If they are the same economists as the first paragraph above, then I guess I’m not surprised. Who knew that 4 million dollar bungalows weren’t sustainable? 😛
A little side comment:
It’s actually deeper than that and a really interesting sociological phenomenon. Did you know that there are actually cycles of war, somewhat like in RE or other markets? They just occur over much longer periods.
Broad-based demonization of wealth in society is a symptom of excess inequality (whatever “excess” actually means). The latter is connected to economic supercycles, migration patterns and technological disruption – the conclusion of which often bring about great conflict and sometimes even revolution. I find it interesting, anyways. 🙂
https://outline.com/C6feBd
I can’t read the whole article because of the paywall but wow
The average price of detached houses sold in Vancouver has plunged more than 1 million over a 16-month period, a 33-per-cent decline as the downturn in real estate deepens, newly released statistics show.
Within the City of Vancouver, the price for detached properties averaged $2,070,030 last month for sales on the multiple listing service, down sharply from $3,080,563 in October, 2017, according to an analysis of publicly released sales data by real estate agent Steve Saretsky. The last month that Vancouver’s average detached price dipped below $2.1 million was in February, 2015.
https://www.theglobeandmail.com/business/article-average-price-of-detached-houses-sold-in-vancouver-plunges-33-per-cent/
@Jerry
Good points. Demonizing wealth is the flavour of the day. Re-distribution via taxation could be done more efficiently and more so without the “politics” involved.
Being fortunate to monetize one’s efforts and talents should not carry social stigmatism. Having a few “luxuries” in life, whatever your definition, should be celebrated and cherished. During my childhood, having a chalet @ Mt. Washington or lake house up @ Shawnigan was cool and envied. Created motivation to try to ascertain that lifestyle. Now, more than 1 place or a fancy car? …. you are a speculator and destroying the environment with you big a$$ SUV… My oh my, how optics have changed in such a short period of time.
@Jerry
I guess you’re really not into the whole liberal principle of “to each according to need, from each according to ability”
I’m happy about the spec tax. It’s total BS, imo, that housing can be allowed to be traded and held like a stock. People – especially those that don’t live here – shouldn’t be able to buy up houses and hoard them and not rent them out while the homeless population/rents/housing prices balloon. Thank you government for stepping in! If only they had done something sooner.
Unlimited growth increases the divide.
“12 sfh on mls in the core is my count…600k or less
here is 1
https://www.realtor.ca/real-estate/20356202/2-bedroom-single-family-house-954-mason-st-victoria-central-park”
Re: Mason street house
I’ve seen things happen outside that house… Eventually that entire block will be bought out/demo’d and new condos will go up. Eventually….
I don’t think anyone pre-judged the “spec tax” as a failure but quite a few of us pre-judged it as an immoral outrage. Four out of ten households pay no tax yet enjoy all the best that a modern civil society offers at no cost. They also vote. They vote for governments who will keep the trough full and point fingers at the those nasty entitled people who have made a success out of their lives. The ‘spec’ tax is dogwhistle (hog call?) politics at its worst, accomplishing nothing and arbitrarily demonizing wealth.
Only two possible solutions: a flat tax rate for all adults or withholding voting rights from those who don’t pay tax. Failing that we will continue to get the governments no truly integrated citizen would elect – hacks, apparatchiks, and panderers.
“Deryk: The story remains the same….”
Except that it was a house in Sooke vice Victoria which is quite a bit different and really changes everything about the story, in terms of context, and the point it was trying to make.
Unless i just experienced it differently.
They’re easy to find. Just go to BC assessments, and browse some homes, and they have sales histories. Here’s the first core SFH I found under $600k sold in mid 2018. You can also see that many of them are assessed well under $600k so a sale under $600k shouldn’t be hard to believe.
https://www.bcassessment.ca/Property/Info/QTAwMDBITk5QTA==/
918 Bay Street
Sold
27-07-2018 $560,000
@guest_57217
Ok, first that post is from Dec 20th, 2018(yes it’s 2018 but clearly very recent) and secondly provides no specific example it’s purely anecdotal info from your fellow bull Deryk.
I’m genuinely looking for examples as I don’t recall any in that price range.
Yes, and fortunately a lot of people were like me, and also prejudged this spec tax, and complained loudly about it. Remember, the NDP announced it in the 2018 budget as 2% for everyone, with no deduction. And gulf islands included. So “pre-judging” it resulted in lots of complaints, forcing the govt to amend it more than once, and lower it dramatically to 0.5% with a $400k exemption for BC residents.
That 2% rate would have had that retired piano teacher paying an absurd $24K per year for her Belcarra summer cottage. So, yah, I “prejudged the spec tax”. You should have too.
” YeahRight” …..Thanks for pointing that out. I didn’t word that correctly. The $375,000.00 new houses were in Sooke, (Not Victoria:)
The story remains the same though.
“3148 Jackson
$800,600 2018 Assessed
$599,900 List
$663,000 Sold
$727,500 2017 Assessed”
Poster child example of those who should go for BC assessment appealing …
@ Deryk Houston
#57289
NO, no no. 375K, with a suite. In Vic., No!
We had been looking at the market since 2005. And It was hard to find a regular SFH for 350K that was decent, let alone 450k in 2012 when we bought.
I think you are pulling numbers out of your arse.
The “focus” on sob stories comes from the media and opponents of the tax:
The media publishes these sob stories, usually taking the owners claims at face value with no investigation at all. The media has not gone looking for (1) Second or third homes sold because of spec tax, (2) Formerly empty or STVR homes rented out because of spec tax. Thus at this point the ONLY media stories on the tax are these sob stories
At some point there will be some reporting on (1) and (2) and also of course on how much money it takes in. At that point it will be easier to judge how successful or unsuccessful the tax has been. Folks such as yourself don’t seem to need any data as you have already pre-judged the tax as a failure before one cent has been collected
Assessed houses that have either been recently renovated or have never been renovated are not assessed at a sale able price ones under assessed ones over. 3148 no chance in hell that was ever worth 800k…. That place is close to a tear down so someone paid 660k for a lot or needs to spend 200k to get something updated
12 sfh on mls in the core is my count…600k or less
here is 1
https://www.realtor.ca/real-estate/20356202/2-bedroom-single-family-house-954-mason-st-victoria-central-park
ones a boat 🙂
https://www.realtor.ca/real-estate/20083344/1-bedroom-single-family-house-b4-1-dallas-rd-victoria-james-bay
“If bears here are waiting for better value than $663k for a SFH house like this, they may never see it.”
So, lets talk about value. In order to do so lets add a bit of context. I think it is worth repeating what a couple of posters have pointed out already, which is as follows:
3148 Jackson
$800,600 2018 Assessed
$599,900 List
$663,000 Sold
$727,500 2017 Assessed
So this house went for $137K below 2018 assessed value and $64,500 below 2017 assessed value. Is that good value? I would say, at this very specific point in time, when put up against comparables (1308 Merritt St – 405 714), then today this house was good value.
Now, in terms of bears waiting for better value here is my thoughts. We have a house, that needed to be sold, and was priced as such. It was priced in order to sell, with the hopes there would be multiple bids to get it the most amount in this market. In my opinion, this seller needed to sell and wanted it sold quick. This seller, and what they just did, is what sets market price. Now, comparable homes in that area will have a hard time justifying over assessed asking prices because buyers (smart ones at least), will look at the most recent comparable homes, like 3148 Jackson, and determine that the new value / market price for a comparable house in that area is at the $663,000 level.
People that need to sell, the outliers as JJ used to describe them as, set the market price. You can ask whatever you want. If you don’t need to sell you can hold on at that price level. But if your neighbour needs to sell, well that changes everything.
So value for today yes. An indication of the market and its direction… yes. Value in 3 months… not so sure.
Actually in some areas it’s already retrenched to 2014 levels, others are back to 2016 – and the declines are still growing. Sorry, had to say that. 😀
Personally, I would say that represents decent value and as you point out, it’s clearly worked out well for your family. Tenants paying off that much is a total bonus.
But it’s like any investing – there’s a time when a market is investable, and times where it isn’t. I don’t see a broad based investability here right now (at least in terms of purchasing most residential RE today). Someone may disagree on the basis of expecting capital gains, but that person isn’t really a RE investor IMO.
Here’s a post from 2018.
https://househuntvictoria.ca/2018/12/20/slow-on-the-uptake/#comment-53708
“My point is that houses in Victoria are still inexpensive. You can still buy a house within a short bike ride to downtown Victoria…. for around $600,000.00 …which is amazing actually.”
If you visit that post thread, it’s interesting to see the response to it. The usual suspects (bears) replied immediately, with insults (same as they do now) and predictions how these $600k prices are too high ,and will crash. There were many specific examples of $600k houses posted in 2018 on the forum too
Local Fool: I looked at Vancouver five years ago and was “stunned” at the huge differences even then in prices between the two cities. (Think about how much Vancouver has climbed since five years ago)
I recognized that Vancouver was an international city and that Victoria was only a capital city with great surrounding beauty.
But I still felt that the difference in prices was too big of a difference and that Victoria had room to increase in value. It seemed incredible at that time that one could buy a brand new house with a legal suite for only $375,000.00. And so we put our money where our mouth was and bought 3 houses out there between ourselves and my children. My son just sold his house out there for $552,000.00 because he now wants to buy one in Victoria. It’s not a huge amount of money in gain….. but not bad. His tenants in the meantime have paid over $120,000.00 in rent and paid off a nice chunk of his principle as well.
People are still coming to Victoria and that will not change. Yes there will be wobbles.
@ Patrick
I disagree, I’ve been following the housing market carefully since I moved back to Victoria. I don’t recall seeing a single one in 2018 & possibly even 2017. Though maybe Leo can do some magic and pull some statistics.
There have always been houses in the core selling for $600k range. Deryk has been pointing out specific examples on this HH site for years.
Basically:
Bears love/agree with bears.
Bulls love/agree with bulls.
When was the last time houses in the core were selling in the 600k range? I think that shows the current state of the market.
Deryk,
Agreed. And thanks for posting the specific examples on these $600k houses. I find your posts to be some of the best and most helpful here.
Deryk,
I was rejecting your comparison of the two markets to arrive at that kind of conclusion which to date, has consistently been your thesis.
Whether an individual thinks Victoria does or doesn’t have value at a particular moment is irrelevant; the market decides that. And whatever the market decides, we see it in the data. Many people obviously saw tremendous value in Vancouver in 2016. Ditto Victoria, and much of southwestern BC.
The main story of the Vancouver Empty Homes Tax is what a flop it’s been. The problem isn’t the rate, the problem is that there aren’t that many vacant homes. About 10% of what was estimated.
https://www.vancourier.com/opinion/don-t-expect-speculation-and-empty-homes-taxes-to-increase-rental-stock-in-vancouver-1.23644971
“When this tax was first proposed, we were led to believe there were anywhere between 10,000 and 25,000 empty homes that could be brought into the rental market. However, according to the report, the number of homes declared vacant, without valid reason, was 1,085 in 2017 and 922 in 2018 — 525 properties were declared vacant for both years.”
If these tiny numbers of vacant homes translate to Victoria, that would be about 600 vacant homes in all of Victoria. And we build 5,000 new units per year.
I completely disagree with the “Local Fool”, I still stand by my opinion that Victoria is amazing value:)
Nobody bat an eye when Vancouver introduced their vacancy tax a couple of years ago. Now that NDP made it province-wide, suddenly there are all these sob stories appearing in newspapers. It appears to me that all the whining is much more political than a representation of what people actually feel about the spec tax.
They are considering increasing the tax next year for this very reason.
Yes, a rental like this is a good option for her. More like a loophole than a solution. Because I just don’t think it helps much with the crisis of affordable housing. Freeing up a useless “winter” cottage rental like this, 8 months a year with difficult access, and no utilities seems only a solution designed to meet the govt requirements. City of Vancouver found a tiny total of 82 units converted to rentals with their vacancy tax, and most of them are likely useless “winter” forced rentals like this.
Rather than focus on spec tax examples where the litmus test is whether people “feel sorry” for the owner, can anyone instead give a single “success story” of a quality year around long term rental freed up because of the spec tax?
what a change from a year ago…many place use to be 100k above assessed values .. now 100+k below
So, basically, we need not feel sorry for her, which was my original take.
I agree with Deryk, that is amazing value. The bears here are hung up with the comparison with Vancouver, but that isn’t needed to show the amazing value. With 20% down, the mortgage is about $2,500 per month. Over the 25 years of the mortgage, thats an average of $900 interest and $1600 principal pay down per month.
For that, you get a SFH in Core Victoria, 2000 sq. ft, in reasonable shape, big yard. Congrats to the purchaser.
And yet, one of the bears tells Deryk that with this example that Deryk is “continuing to conflate “cheaper” with “value”. If bears here are waiting for better value than $663k for a SFH house like this, they may never see it.
Thanks for setting me straight on this detail of the spec tax Patrick.
So our Belcarra-owning, basement-suite-dwelling senior thus has three main options.
1) Pay the tax. Article stated she pays 12000 in property tax. If a holiday home in a Vancouver suburb is super important to this family. I suspect they could just cough up the extra 4500. I get they that aren’t super thrilled about paying extra but that in itself is not a public policy problem.
2) Sell the place. If she sells it for close to assessment she’ll have lots of money to take her extended family on vacations even more luxurious than that cabin
3) Rent the place. People are living in cars/tents/RVs, garages etc to make ends meet in Vancouver. Back in the 90s when things were WAY less desperate I had a friend who literally lived in a plywood box on the side of Burnaby mountain while he completed studies at SFU. He knew many others doing similar. Absolutely someone will rent this for the 8 month cool season and then leave it free for the family in summer. I am not aware of any law that says you must have sewer service to rent a place. Where i grew up there used to be plenty of places with outhouses rather than proper septic or sewer. People rented these places out.
Everyone, I’m cautiously optimistic that we’ve rounded the corner on this winter BS. If anyone needs me, I’ll be outside counting flowers.
https://flowercount.com/
A little perspective on that Jackson St property. It was priced significantly below assessed value – Assessed at $800,600 and listed at $599,000. So $201,600 below for the ask and the pending price is still $137,600 below assessed. According to BC Assessment, neighboring recent sales have been for above assessment. This was definitely priced for a bidding war. Yes people are still looking for properties and yes it can still be a flat (without quotation marks) market.
https://www.nytimes.com/2019/03/07/style/uber-ipo-san-francisco-rich.html
Deryk, I’m not sure what your point is either.
IMO, you’re continuing to conflate “cheaper” with “value”. When you’re comparing it to one of the most inflated housing markets in the world, it becomes almost meaningless because anything compared to it looks like “value”, when it may not be.
It would be like me selling a $50.00 set of kitchen cutlery for $150.00, but you’re offering that set for $75.00. Neither one of our prices represent value to the consumer, although the latter is literally the better deal. Two years ago, folks were arguing that Vancouver represented value because “Hong Kong is more expensive”. IMO, not a good argument.
Sure, maybe you’re thinking it’s not meaningless because those Vancouver buyers are coming here and buying, but there’s several problems with that assertion, the largest of which is that the migration data isn’t really bearing that out anymore. We did get a surge in 2015/16, but that’s dropping off pretty quickly as expected.
Out of town buyers are nothing new Deryk, and whether or not they are buying isn’t in itself the telltale sign of market trajectory – credit/market liquidity is. The latter is what’s disappearing which is why the Vancouver buyers are disappearing, and the reason why HAM is disappearing from Vancouver. So as VanRE continues to decline, the impetus for that migration you’re referencing starts to vanish.
British Columbia has a very visible and established pattern of migration coming into the province during booms, and exiting during busts. I see no reason to think that this will be any different.
affordability is relative
why not make comparison of port hardy to victoria ?
Barrister…..yes…it is amazing….a house in the “downtown” for $663,000.00.
($70,000.00 over the asking price in a “flat” market.) That price range is still smoking hot.
The house on Jackson was a reasonably nice little house and in solid condition on a massive sized lot. A great family house for an entry level house….or for older people downsizing.
Jamal McRae: (Not sure what your point was).
I do know that my point was that Victoria has amazing value when one considers that in Vancouver’s kitsilano area you would pay $2.5million dollars for a similar house on a 120foot lot and in Victoria within walking distance of downtown…. you can buy one for $663,000.00 on a super large 200 foot deep lot. (That’s what Jackson street house has just sold for apparently.)
Deryk… News flash.. Vancouver is not located in kitslanlano only.. similarly, Uplands does not represent Victoria… 30 years ago kitslanlano was cheap.. but now it is sky high prices.. just like Gordon head.. was relatively cheap locally.. now one of the pricy area ..
My commute in Toronto was less than 5 minutes of walking. I paid $350 a month for the room (mid 2000s). You could have easily lived downtown, you just chose not to.
Deryk: I absolutely agree with you on the fact that Victoria is still very affordable. The only minor difference in opinion is I dont see this property as being close to downtown but rather it is actually downtown. From my perspective Greater Victoria includes Sidney and the whole peninsula and stretches out to include the whole west shore. I will let others argue about the status of Sooke,
I did a quick search for the greater Victoria area (excluding Sooke ) and there are over 150 SFH listed at or under 750k. By the way all of those houses are still a much shorter commute than I did my whole working life in Toronto.
Barrister: Yes…. Jackson street is very near the Finlayson park with the artificial fields. It’s a handy area to town. Close….a quick walk to Mayfair mall and downtown Victoria. Try finding a house for around $650,000.00 on a two hundred foot long lot in Vancouver with the same walking score to downtown:)
The asking price was under $600,000.00 and the house is quite solid and interesting for it’s age. (I’m guessing that the bid would be under 7 hundred thousand.)
It’s why I keep saying Victoria is amazing value. (A 33foot lot in Kitsilano with an old war time bungalow is getting $2.5 million even in the vancouver depressed market.)
Deryk: Thanks for the update and if anybody finds out what the house sold for finally please post. By the way, what part of town is Jackson in? Is that Quadra and Finlayson?
I am not sure that denad at that price range is surprising considering incomes in Victoria.
Went to an open at Jackson and there were so many people going through the house. It was priced very well. There were twenty five pairs of shoes sitting on the front steps at one point! There were also multiple offers. Clearly that was the whole point of listing it low. But it does give you a sense that there is a huge demand for houses in the $600,000.00 range. It also had a huge lot. (Not sure what it has sold for, but definitely well over the asking price.)
On the topic of assessments. We were significantly over assessed and were able to argue the assessment down over %20. It helped we purchased our house in 2018, but were able to do it without having to go through the appeals process.
People can have a summer home and a winter home. RE agents didn’t invent that.
In law, and even in the spec tax law the concept that people can have multiple homes is recognized. A third party tenant must make it their home or the landlord gets charged spec tax, and the tenant might also have a home and live elsewhere. Their have been househunt discussions on that too.
If that retired music teacher lives in her cottage for 5 months and her bsmt apt for 7 months they are both her home during that period, and likely she has made both of them her homes in law for 12 months each.
The article states that she lives in it in the summer.
“Robson, who has children and grandchildren, said the family uses the cabin as a summer vacation getaway.”
A more important point is how few properties get freed up for rents by this spec tax. Vancouver City announced a whopping 82 properties changed from vacant to rented on year 2 of the empty home tax, and their population is almost twice Victoria. .
That’s weird. Maybe there was an intervening sale between those two dates?
Of course, the whole point is that these properties aren’t their homes, or anyone else’s.
The misuse of “home” to mean any property has been promoted by the RE industry in an attempt to make buyers more emotional, and this kind of thing is the ultimate absurd result.
BC Assessment says sold 02-06-2016 for $6,069,000.
https://www.bcassessment.ca/Property/Info/QTAwMDA3NzEzUQ==
The good news for today is that my friends from Toronto have not put Victoria even on their maybe list of places to retire. One less person to compete for housing.
I still dont have any feel for where the housing market is going this spring but I am not seeing a flood of new listings in James Bay, Fairfield or Rockland. Not a scientific conclusion of month to month comparisons but just a mere observation. But it might just be a slow run up this spring.
Maybe we should all be encouraging Josh to move to Ottawa and that would free up a rental unit here and take one potential buyer out of the market. We are leaving soon so the least you can do is leave as well.
Not looking for your sympathy, just your logical reasoning. Govt estimates that there are 3,000 vacant properties in Victoria. We usually build 2,000 units a year, but this year we are building 5,000. That one year excess building of 3,000 units is equal to number of all vacant homes. The point being that building homes is the powerful solution. Only some of the 3,000 vacant properties are going to get freed up, and that’s a one time fix, and is small numbers. All energy should be put into building lots of homes each year until the problem is solved, not trying to “smoke” people out of their vacation properties. For example, build 5,000 homes for 10 years, and that’s 50,000 compared to the 3,000 vacant homes that people here seem so concerned about.
They’re sent to me automatically. Most of it’s pulled from social media, but also news articles.
Canadian Housing Market This Bad Normally Means Recession: BMO
Residential investment is falling, and that’s a clear sign of hard times in Canada’s economy, the Bank of Montreal says.
Usually, when Canada’s housing market is this badly in the dumps, the country is in a recession, according to a research note from the Bank of Montreal.
Canada’s economy ground to a near-halt at the end of 2018, according to data from Statistics Canada, with growth slowing to a 0.4-per-cent annual rate in the fourth quarter. Among the weakest parts of the economy recently have been anything related to the housing market.
Residential investment, which includes building new homes and buying and/or renovating existing homes, has dropped 7.5 per cent over the past year, BMO senior economist Robert Kavcic said in a report earlier this week. “Historically, declines of this magnitude in such an important sector have usually correlated with a broader recession,” Kavcic wrote in a client note.
When Kavcic called residential investment “such an important sector,” he wasn’t kidding. A recent report from CIBC noted that residential investment had become larger as a share of the economy recently than “at any other time on record.”
https://www.huffingtonpost.ca/2019/03/06/canadian-housing-market-bmo-recession_a_23685930/
And if you’re lucky you can sometimes warm your hands by the fire engulfing scrapped vehicles on a Schnitzer Steel barge going by.
P.S. I hope you’re at the hospital and that the anticoagulants are working. Get well soon!
Interesting paper on the spec tax out of SFU.
http://www.sfu.ca/content/dam/sfu/mpp/WorkingPaperSeries/Speculation%20and%20Vacancy%20Tax%20Explainer%202019%20Gordon%20Final.pdf
NDP Lets stop calling it a spec tax. Just call it a tax on properties where there is a housing affordability issue and the property is not being used to its fullest extent….
Not snowing on the Gorge right now.
Belcarra is a 19min drive to the center of Coquitlam. It would’ve a shorter commute to much of Vancouver than other satellite areas. Hardly ‘remote’.
I like how this tax was implicated… They saw potential loopholes and closed them. If they allowed exemptions for Belcarra just think of all of the other areas that would get exemptions. No thanks, there’s a reason those cabins are worth over a million bucks… They’re in greater Vancouver. Add some insulation and rent it to a student, throw in a kayak and you could get an easy 2k/m. Or pay the measly tax or sell. No sympathy for people not using their million dollar properties or making them accessible to others in a housing crisis. If there was a water shortage and you had a lake on your property we’d want access to it or would charge a fee for the ability to hoard it, I don’t see how the spec tax is any different.
Love these old articles. Interesting to see the reference to out of town buyers behind the 1980 boom. Where are you finding those?
Can confirm, soul gone. Worth it though.
Never mind…. Best to keep this child friendly…
OMG, it’s possibly lightly snowing right now where I am. Fuck me, and fuck this weather.
Rest in peace, Hawk. Devastatingly wrong about everything for almost four years, yet a beacon of hope for so many. I hope he’s in a better place. His rental in the Gorge didn’t sound like it was that good.
So much for those interest rates rising…. Hawk’s prediction of 3.5% at year end isn’t looking like so good.
Yes, and perhaps opportunity for a jackpot bet that the first to buy occurs after an epic bidding war between the two of them 🙂
This is not news, Soper. And I’ll point you to what Leo said the last time this came up, which I like:
Have I ever demonstrated that I have any?
What’s going on with you, Soper? Your concept of me is suddenly fuzzy, and you’re confusing Victoria and Vancouver in terms of which one is selling 5% above assessed … I think you might be having a stroke. Does one side of your face feel tingly?
Didn’t realize that. I guess all the Australia posts make sense now.
Also based on this map, seems like there are a lot of development opportunities in Victoria right now!
https://www.arrivaseychelles.com/
I love how Introvert is personally cheering for a lower rate because of incoming recession because it benefits her, since she’s up for renewal soon.
Where’s your empathy now?
I know that James and you are referring to houses not selling above assessment. Are you looking to buy in Vancouver? or Victoria?
This is House Hunter Victoria…
The article you were responding to was about Vancouver in the 80s.
Maybe you should look at the map before you send it.
Josh I don’t care because it still selling above assessment. This is not asks but sells.
You can relist it a 1000 times. A buyer can find that out and chose to offer what he wants.
After how many months on market and reposts?
James
We are in Victoria. I can send you a map if you like,
Leo posted today. On average houses are selling at about 5% above. That is here in Victoria. I know the bears hate facts that interferes with their crash narrative.
The spec tax defines principle residence differently…and it’s different than the usual one where you can “designate” it.
Here is the spec tax definition… .
http://www.bclaws.ca/civix/document/id/complete/statreg/18046
”principal residence” means, subject to section 10 (1) [rules relating to principal residence of spouses], the place in which an individual resides for a longer period in a calendar year than any other place;
Sorry local fool. Wrong again. It’s assessed at $4,644,000, and houses are still selling for over assessment.
True for now, but to paraphrase what you said yesterday….
“(w)ife is what happens while you’re making other plans.” 🙂
Talk about getting your face ripped off and then some. One of the worst I’ve seen yet. This one from Surrey.
13988 34th Avenue, MLS R2018995
Purchased July 2016 for $5,780,000.
After trying to sell it since at least last summer at varying price points, they finally just unloaded it for $4,050,000.
By the time you add carrying and transaction costs, that’s a roughly 2 million dollar loss.
Article doesn’t make sense. First of all if she is a BC resident as appears the tax based on the assessment of 1315000 would be $4575 not 6000.
Second the article states she lives in a basement suite. Unless she owns the house where the basement suite is located or owns some unmentioned other home why doesn’t she just claim the Belcarra place as her principal residence. You can absolutely claim a cottage as a principal residence.
If she does own another Vancouver area house she could add some of her family members to the title and one of them that doesn’t own another home could claim the cottage as PR.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate/what-a-principal-residence/does-a-property-qualify.html
Or just pay the damn tax.
The level of these spec tax sob stories is getting pathetic.
So many exemptions!
So much whining!
What a property sells for is it purchase price. Most of time that purchase price in a fair and competitive market is equivalent to market value. But not always.
Sometimes the purchaser can make a better deal and sometimes the vendor can. Because of the differences in motivation between vendors and purchasers market value is not a precise number. Market Value is actually a range of prices where the majority of properties with similar physical aspects to a home lays. In an area with homogeneous housing, such as Gordon Head, that market value range is small. In an area with little market activity and large variations in physical aspects of the homes that range can be much larger.
There is also the possibility that within a contract to purchase there are terms and conditions to the sale that will affect the purchase price. Such as preferential financing or the inclusion of chattels. Those sales would not be considered at arms-length and not suitable to rely on in determining market value.
Just because a property sold near the July 1 date does not in itself make it a reliable indicator of market value.
I would say the number one disagreement between real estate agents and appraisers is over this point. What a house sells for does not mean that it sold at market value. To determine if a property sold at market value you have to look at all the sales of similar properties to that of the house that sold but not including that sale. If the offer to purchase falls within this range then it is considered to have sold at market value.
FYI: An ugly old rotting fence, falling down on it’s own, does nothing for the assessment.
When we tried to fight our assessment years ago, the agent lumped in a house, for comparison, that we considered 2 story. Based off the info I got from their official website. Yes the steps go up to the 1 floor. But the garage and crawl space sits below the door. At the time (on their website) it was considered a 2 story. I even informed the agent of a video on their site that explains this (Video now long gone).
The agent was so adamant, that I had to show them my wife’s picture of the house, as she walks by it to go to work, to prove that it’s a two story that they are comparing to our 1 level cement slab of a property!
After showing them some other issues and such we showed that there was an argument from what we paid, from evidence of how much work still needs to go into an old house (and an ugly fence that doesn’t count, according to this agent).
In conclusion: The judges were in our favour. But the agent wouldn’t budge on the land. However the agent would, with hesitation, budge on the house. We got $25k off the house.
…Next year, the house shot back up $20K+ and of course the land went up as well.
?!? —Not improving anything on the house! How is it that the value goes up on the house?
Yes the land, but the house?
It should have stayed the same or cost less. But, no, it goes up $20K+ with nothing done to it!
The whole system is rigged!
-Not worth the hassle, they just do what they want after the fact.
Local
You don’t want little ones to suck the living soul out of you?? Come on….I guess you want to travel and enjoy life…..
Haha. Trust me, I’m in no rush to buy and neither is the lady. I said 2019 is possible but that’s not a statement on how likely it is as much as it is an indication that I lack clairvoyance.
Josh I think, has more imperative because he wants kids. We don’t. I would like my own workshop, but it’s not a hill to die on. Pending kids can be a huge pressure point for buying, but atm buyers have little selection anyways. That will change, but for today…
Bank of Canada Rate Decision: Nearing the End
As for the market, it made its position immediately known by driving down bond yields after the BoC’s statement. Canada’s 5-year yield (the most-watched indicator in the mortgage market) fell below 1.70% for the first time in 15 months.
The discount of Canadian two-year yields to two-year U.S. yields is now the biggest in over a decade. That’s market testimony that Canada’s rate-hike cycle is finished, or close to it.
Those who locked in when rates were under 3% are still sitting pretty. In fact, many of our readers in 2016 snagged 5-year fixed rates at an unbelievably low 1.99% or less. Will we ever see those rates again? 100% yes. The next recession could take us there; we just can’t tell you when.
https://www.ratespy.com/bank-of-canada-rate-decision-03068452
Patrick:
LF v. Josh first to buy….we should game this…pints from the losers? 😉
Regarding assessment, I’ll copy/paste a comment I made back in January about my experience with getting a re-assessment:
So assessments were taken July 1, and our house deal closed July 13. To my surprise our assessment came in $74K over what we paid so I promptly made a call to BC Assessment and said, seeing as we have a true market value for the house, can we not use the sale price as the assessment price? The answer I received was No, they won’t use sale prices solely, however the chap I was speaking with said he looked at some specifics of our house and adjusted downwards on a couple of items. He said that would change things to instead assess at $27K over what we paid. (A drop of $47K) I still think it’s bonkers as there is no better gauge of market value then, you know, what it actually sold for 12 days after assessment, but If I want more, I have to take it to the review panel. I guess I’ll take what I can get as a $47K reduction is better than a kick in the teeth. Maybe it won’t impact my actual property taxes that much, but if assessments keep going up, keeping the total down now will hopefully help soften future increases.
PS
I think the only reason I received this without having to go to the panel was precisely because the sale happened so close to the assessment date.
Now looking like even money that both Josh and LF buy by year-end.
There have been a couple hundred sales this year.
It’s basically anecdotal at this point.
Intro, her specific property exemption is different from her communities exemption.
Josh,
“Unrentable” isn’t enough to get an exemption it’s got to be uninhabitable due to a hazardous condition.
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax/exemptions-speculation-and-vacancy-tax/individuals#uninhabitable
“All owners of a property may claim an exemption if no one can live in a residence because it’s uninhabitable due to a hazardous condition or because the residence has been substantially damaged or destroyed”
https://www.timescolonist.com/seniors-with-unrentable-homes-near-vancouver-face-huge-speculation-tax-bills-1.23653819
In Vancouver?
Are you sure?
That’s bait, right? She should have an easy time getting an exception for an unrentable property.
Local
I would be looking at a shit hole in a good area for the next few months and getting dirty….Good luck with the search….Hope you find something that meet all your needs.
We might buy this year but if we did, it would be well into winter. I’m not convinced the prices will move much by the time summer comes around. Even winter is questionable but who knows, all you can do is watch.
Thanks for bursting my bubble, bub. Can I at least hope for a smaller tax hike compared to the average Saanich household? Come on, man!
Haro Woods has dirt jumps, too. Not sure if they’re still being used by the “youts.”
WTF! Even after all the doom and gloom every day on this blog?
Bears, you’re screwed. But surely you’re used to the feeling.
That’s a good argument, for sure. However, my personal policy is to never feel sorry for millionaires (usually).
Local
Hard to get upset at a dreamer. Society needs all kinds. My bet is you will be buying this year. You seem like a smart guy (even when you are posting 40 year old rubbish articles) and you realize this year is probable is good as it is going to get.
It’s been interesting to see the comparisons between this downturn and that one.
Then, you had very high rates, high inflation and everyone was scrambling to get into houses to hedge. This time you have very low inflation, very low rates and everyone scrambled into houses for yield.
Keep in mind, back then the bubble was still inflating rapidly when rates were above 20% – in fact, the most aggressive price increases were then. When it finally popped, rates soon started falling, but it didn’t matter once the psychology turned and momentum down began.
Some markets saw similar declines in Canada a decade later, despite rates being proportionally much lower then. Looking to the USA a decade later and rates far lower still, the market still fell 40%.
So I would suggest the market didn’t die on rate hikes per se, it died for much the same reasons were seeing today. The prices simply got too high relative to whatever the debt servicing costs were.
At these levels of debt, it would appear they are worried that Canadians can’t handle a real interest rate of 0%. Not really convinced that’s a good sign, but I digress.
I am not seeing a flood of listings in my area but I am wondering if the weather has put a bit of damper on it all.
Thankfully my friends from Toronto are leaving this morning. Love their company but a week of playing native guide is about my limit. They were checking out possible retirement spots and are planning to make a move this summer. They have been considering different locations for about a year now.
Off to Brentwood Bay for lunch today.
Wow! Thanks for the heads-up, NE14T.
Didn’t these developers get the memo about the declining market, buyers not willing to catch a falling knife, etc.?
I’m kidding, of course. I bet all these lots will sell in a snap.
Ya Local sounds real familiar. Let see the Bank of Canada just halted rate hikes at 1 3/4.
1982 was cause by rates going to 20% and the fallout from that. MY good buy some better quality weed….so ya can deal in reality. House prices are still going for over assessment.
A little time warp for you…perhaps some of this sounds familiar, as the market shifts to the downside.
The market indeed recovered over that decade, and was chopped down again around 1990.
Still averaging 5% over assessment on the single family side.
I dunno. Can’t see any public policy goal being accomplished here by forcing the sale of a cabin that is really not a home. Seems like this should fall under a special case. No utility hookups, no spec tax.
Seniors with unrentable homes near Vancouver face huge speculation tax bills
https://www.timescolonist.com/seniors-with-unrentable-homes-near-vancouver-face-huge-speculation-tax-bills-1.23653819
My take: unless that land is unsalable for some reason we should not feel sorry for her.
Bank of Canada leaves key interest rate unchanged at 1.75%
https://globalnews.ca/news/5025942/bank-of-canada-interest-rate-unchanged-1-75/
Province balks at condo Airbnb tax proposed by Victoria
“For them to say that it’s too much trouble to take the additional step for determining that if the property is used as short-term vacation rental it appropriately pays the same tax as a hotel, seems to be an inconsistent position,” Young said.
https://www.timescolonist.com/news/local/province-balks-at-condo-airbnb-tax-proposed-by-victoria-1.23654022
How are the sale prices comparing to the new property assessments?
Recently, while doing some family history research and going back to the 15th century my father came across a chimney tax list for a village where some of my ancestors originated. It was an interesting document. Home owners were taxed on the number of chimneys , at the time it was a measure of wealth.
There were some interesting notations by the tax collectors : “widow, husband drowned at sea, 5 children cannot pay”, “two old people always in bed cannot pay”. It was clear the tax collectors went door to door and there was some humanity in the system. More important the system had an inherent stability as your chimney count was pretty constant.
Nothing has changed much in the last 500 years. We have become more sophisticated and the chimney assessment in all its simplicity have been replaced with the annual Land and Building assessments. The expression of wealth is now a function of recent sales and the combined new assessed value of the land and buildings in the neighbourhood.
My father has successfully appealed his assessment twice and both times it was in comparison to waterfront properties nearby who had similar assessments. In both cases he was able to argue that his property should be much lower due to the value of waterfront land. I should have gone with him to witness the process.
Yes and no.
Yes in that in the Real Estate Council’s rules, unpermitted work constitutes a “material latent defect” (a defect that is not obvious upon normal inspection but affects the property’s use or value as opposed to a patent defect which is obvious upon inspection).
If you use a REALTOR® to sell your house he/she is required to disclose work done without permits to any buyers. https://www.recbc.ca/psm/disclosure-of-material-latent-defects/
Given work without permits is so common, that won’t necessarily drop the value much, but it will give the buyers some pause when they are asked to sign the disclosure that the property has a material latent defect (sounds scary).
If you are selling the house yourself it’s a bit of a grey area. At common law you are still required to disclose any material latent defects, but I am unfamiliar if there is case law that would actually include simple lack of permits as a material latent defect if the alteration is otherwise of high quality.
See some comments on the difference between the stricter real estate industry disclosure requirements vs common law:
http://www.bcrea.bc.ca/news-and-publications/publications/legally-speaking/legally-speaking—may-2016-(486)
https://www.lawsonlundell.com/Commercial-Litigation-and-Dispute-Resolution-Blog/disclosure-obligations-in-residential-real-estate-transactions
In short, if you are selling your house yourself that includes work done without permits, consult a lawyer to ask if you should be disclosing that work.
Penguin:
Undergrad or grad school? I think there have been BMX jumps there on and off..the local kids build them (at least my nephews did periodically).
Since caveat emptor brought up the subject of unpermitted work, I understand insurance may not cover a person if they have unpermitted work done but I am curious about resale issues. Let’s say a person has finished their basement (or is in the process) and has realized they should have got permits for electric and plumbing. Will this be an issue when they go to sell their house?
When I was in my first year of uni the orchard had a bunch of dirt jumps. You wonder if kids are allowed to do this kind of thing anymore… It wasn’t that long ago. Wait….15 years ago!?!
I wouldn’t count on it. Budget increase will presumably be higher than normal due to the health tax downloaded onto the munis. +5.8% it looks like: https://www.saanich.ca/assets/Local~Government/Documents/2019-2023-draft-financial-plan.pdf
Now that is perverse. Volunteering for more taxes! Although I do hear you on the accuracy bit.
Historical:
Rew.ca/insights
Create an account, then login.
But having a PCS account will record faster results on sale prices for current transactions.
If you don’t have an account, you can have any realtor set one up for you.
Good point. Special assessments are a good reason to appeal your assessment.
You mean the townhome on Marifield? $815k.
@guest_57177
“Another plot of land I’m keeping my eye on is one I call “the orchard” on Feltham Rd.
It’s only a matter of time…”
1816 Feltham Road is already being subdivided into 10 lots… http://kasapiconstruction.com/1812-feltham-road/
Yeah, I’m up 65% since buying, and that’s including my -2% this year, which should translate into a tax decrease (I’m hoping) since the Saanich average was something like +5%.
I’ve never appealed an assessment; however, many years ago I e-mailed BC Assessment to correct my square footage figure, which was low. My love of accuracy made me do it.
Oh yeah! Is that still undeveloped? I haven’t been past there in a while.
Speaking of appeals, what I like most about Saretsky is his sex appeal.
Can anyone tell me what the place on Marfield went for? And remind me once again where I can check this stuff for myself?
From the previous thread:
Wonder where they went? Switzerland? Oh no, not there, they have a capital tax of 1 or 1.5% depending on canton, yet the rich don’t seem to be fleeing. Anyway, millionaires are not necessarily rich. Most retired university faculty and middle level civil servants have a pension plan worth more than a million. In fact, most of the wealth of most Canadian millionaires would be exempt under a tax regime that exempted all but the richest 20%.
Really decent Howe St. Interview with Steve Saretsky on what’s happening in the BC RE market, with a direct mention of Victoria. For those of you who don’t want to listen to it, here is the segment in text, but the entire thing is worth listening to IMO.
“Steve, do you have the latest numbers for the rest of BC?”
“Preliminarily, in talking with agents, is that it’s just a continuation of the trend, and those other areas like Victoria and the Okanagan – they continue to slow and they’re basically on a lag effect on Vancouver. They’re probably, I would say, 10 or 12 months behind where we [Vancouver] are, so I think their sales numbers will continue to dry up and I think they’ll continue to see prices edge lower but again, on a lag from Vancouver.”
“So, people living in these areas, if you want to gauge where your market’s heading, all you have to do is look at Vancouver and I think that’s the leading indicator – it was certainly the leading indicator on the way up as prices exploded higher; people cashed out equity and moved over to the Island or the Okanagan etc, and now as prices basically start to decline and liquidity evaporates in the Lower Mainland, there’s just a whole lot less money moving out from Vancouver and into those areas.”
So, it’s one realtor’s opinion anyways. But, I do respect and trust his observations. I value his down to earth analysis that just observes simple, matter-of-fact and time honoured market principles and makes it so accessible to everyone. I feel like I’ve certainly learned things from him and I hope some of you have too.
https://www.youtube.com/watch?v=CFzGP4bz4eM
B-21 seems to be mostly some tweaks on the insurance side (Genworth/CMHC) to ensure they are acting prudently in assessing risk of lenders. Doubt it will have significant impact.
http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/b21.aspx#2.6.0
So what do people know about the new B-21 rules that are about to come out?
http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/b21_let19.aspx
There’s another big one we used to cut through at the end of san mateo.
Hey, deer are people too!
Another experience – relayed second hand so a bit fuzzy on the details.
My Dad appealed assessment on a condo facing a fairly massive special assessment to fix issues with the building. BC Assessment accepted the rationale and knocked quite a chunk off the value of every unit in the building (16 units). Tax savings was a couple of hundred bucks per unit. Next year (or it might have been two years) after assessments were paid and repairs completed values pretty much returned to what they had been plus market appreciation.
As my Dad described the reactions of folks in the building most were super grateful for a small but significant savings at tax time, but a handful were royally pissed that he had somehow “sabotaged” their unit value
Appealed my Victoria home twice.
First time was the year I bought it (2008) and it was significantly overassessed. I won about a 75 K reduction in assessment basically arguing on comparables plus the sale price I paid (after the assessment, but well before the appeal). They took the 75 K off of the structure and not the land. I assume the reason was because if they knocked down the land they might have had to knock down the assessments of my neighbours on either side with completely identical lots.
Second time was perhaps 3 years later. BC assessment for some reason got in their head that I had done some unpermitted renovations (I hadn’t). This time I got 40K off but had to go to the second level (property assessment appeal board) and had to let an inspector view my house. The second time was emphatically not worth the effort. I got two years of tax savings and then they jacked my place back up again wiping out what I had won.
I am now back to being slightly over-assessed IMO. Did not have time or energy to appeal last year or this year though I discussed it with one of my neighbours who also felt she was overassessed. Current value is up 63% from my re-assessed 2008 value so it is not grossly out of line either.
So they may not be making more land but they are developing it.
Nothing to do with Assessments but i wonder what will happen when the wealth effect has changed.
Another plot of land I’m keeping my eye on is one I call “the orchard” on Feltham Rd.
It’s only a matter of time…
Steadily, the last semi-large pieces of private undeveloped land in Gordon Head are being subdivided and developed.
A while ago I told you guys about the house on Blair Ave whose backyard was pretty much a long narrow field. The house was torn down and 7 brand new houses were built on the land. Here’s a satellite shot of the parcel during construction:
Well, I recently noticed the big field at 4080 Gordon Head Rd has a development application sign on it:
It looks like 2 bare land strata lots and 5 fee simple lots are going in:
https://www.saanich.ca/assets/Local~Government/Documents/ActiveApps/4080gordonheadnov0618land.pdf
https://www.saanich.ca/assets/Local~Government/Documents/ActiveApps/4080gordonheadnov0618.pdf
All I can tell you is, the deer are not going to be happy about this, and some have no doubt already contacted Saanich council.