3 ms·

I didn't read the bill, but if it's literally what's on the tin and reported in TFA then I think this is a horrible over-reach. A property is by far the most e

by zaroth 10y ago

I didn't read the bill, but if it's literally what's on the tin and reported in TFA then I think this is a horrible over-reach. A property is by far the most expensive asset most people own. Usually "own" in this case means paying a small percentage of the total cost each year and financing the rest. Now there are a million reasons why you might need to leave your house for 6 months or longer where you cannot afford the cost and risk of moving out all your belongings and renting the place to a stranger. Vancouver is saying that they will fine you 1% the value of your house because of this? Someone commented on the AirBnb thread about how "owning" a home in SF was really just a long-term lease you are very likely but not guaranteed to be able to renew. Policies like this make it crystal clear; you own nothing, even owners are renters, and circumstances be damned they will tell you what to do with your house, and heck probably even have a say in who you rent it to, before the day is done. Many single family houses cannot realistically be rented for a true net profit if you really account for all depreciation and wear and tear. Oh, and remember, it's illegal in many jurisdictions to even dip into a security deposit based on "normal wear and tear". Now if any given property had a vacancy budget of, let's say, 3 years, before this kicked in, then I could at least accept this isn't going to screw over legitimate vacancies. But the idea of an "illegitimate vacancy" on a house I own that I'm paying property tax on... That is truly bizarre. A city should be happy to have the tax revenue with none of the burden.

andkon 10y ago
Here's some math that should make this make sense to non-Vancouverites: A 1200sqft bungalow across the street from me sold for $2.8mm four months ago; it's now back on the market for $3.2mm. If you put 20% down, that'd be a monthly mortgage payment of $11,500. That's 1/6th of the average Vancouver family's annual income, per month! I have a feeling that if you're paying $11,500 a month on your mortgage, you're not worried about 1% of the value of your house, and you're definitely not worried about renting it out at a profit. You're just hoping it keeps appreciating enough to pay for interest and this new piddly 1% tax. That's who this tax is targeting. And I welcome it wholeheartedly.
- quickben 10y ago
  Just thinking about this in a detached, mathematical sort of way. The increase or 400,000 over 4 months, is more than 1% of the value. Depending on how crazy the market it, prices may jump even higher short term to accommodate the added speculation loss. In any case, hopefully Toronto doesn't reach that level of insanity.
- ryanwaggoner 10y ago
  A 1200sqft bungalow across the street from me sold for $2.8mm four months ago; it's now back on the market for $3.2mm. That's incredibly frustrating, I get that. I'd love to live in the Bay Area again, but it's too expensive to be worth it to me. What you're describing is a classic bubble. Speculation divorced from the underlying asset value. Presumably not enough Vancouverites would think that $3.2mm for a 1200 sg ft house is worth it to keep that value there. So it's temporary and will eventually pop. Bubbles hurt a lot of people while they run up and when they pop, but it's not clear that price controls do anything other than shift the pain elsewhere, usually while making it worse. I'd rather try and understand what's driving the underlying bubble and fix that if we can. The vacancy is a symptom, not a cause. That said, that's probably not something Vancouver can deal with directly, as it seems more tied to global macroeconomic conditions.
  - orthecreedence 10y ago
    > I'd rather try and understand what's driving the underlying bubble and fix that if we can Foreign real estate investment? Driven by economic forces in foreign countries? I don't know if you can really "fix" that, but you can sure as hell tax it while it's happening. And 1% isn't bad at all if the houses are gaining that much in value over such a short period of time. Whoever's flipping these is certainly beating inflation still. EDIT: Read some more comments, particularly emptybits': > It's an experiment. Much like our recent 15% foreign buyers tax reported a few months ago. We're all watching the experiment. Perhaps our role is to serve as a lesson to other cities? So it seems as though they are trying to curtail the bubble caused by foreign influence, and my comment about "fix"ing it was made in ignorance. However, I still think it makes sense to tax both ends of the spectrum...the buyer tax limits new purchases, the "living here" tax limits houses already bought.
ethanbond 10y ago
The burden is lack of housing and therefore skyrocketing housing costs, what are you talking about?
pbhjpbhj 10y ago
>there are a million reasons why you might need to leave your house for 6 months or longer // Could you give a few examples? I know some rich middle-class (UK) people who have left their home for a couple of months whilst they've had renovations. And I know a few people, again pretty well off, that have travelled extensively abroad or lived abroad and rented out. Beyond that though? I do think they should adjust to allow small-scale local-owner rental. >Policies like this make it crystal clear; you own nothing, even owners are renters [...] // I think they make it clear that peoples housing needs are being preferred over rich peoples right to profit from those same housing needs.
- sokoloff 10y ago
  I might want to live in a warm climate for 183 days per year and Vancouver for the rest. I might have a temporary overseas assignment. I might have a military deployment. (Or UN or Peace Corps.)
  - pbhjpbhj 10y ago
    3 months is a long overseas assignment in most roles, I guess your company would have to pay you enough to make it worthwhile. That's not the city struggling for housing stocks problem. Military deployment, seems reasonable, I wonder how many deployable military are living in these houses; also wouldn't the location remain your primary residence and so avoid the tax? Wanting to live somewhere else? That's exactly what the tax is for - pay up or change your residence.
    - sokoloff 10y ago
      You asked for reasons why someone might choose to move out of their house for 6 months or longer rather than rent it out. I gave a few; nothing more. By all means, I support the local government's right to pass whatever laws/policies/incentives they want as representatives of the residents and a policy could be good on balance even if it screws over a few edge cases. BTW, most of our overseas assignments are 2 years initially. 3 months seems more like a long business trip, not an overseas assignment to me.
theseadroid 10y ago
The sooner some of you guys get the idea that you own nothing, the sooner NA will become a better society. Living inside a society means your rights are not granted by the god or by nature, it is granted by other people around you, by the society. The right and law of ownership is the same. It is merely a consensus how the society distributes its wealth. The issue you described doesn't really exist in Vancouver, where it has one of the lowest vancancy rate in the world (0.6 percent), it's a seller market and rent is high enough comparing to local income/maintenance cost. BTW, Switzerland has the lowest house ownership in Europe according to [1] 1. http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/ http://qz.com/167887/germany-has-one-of-the-worlds-lowest-ho...
emptybits 10y ago
> A city should be happy to have the tax revenue with none of the burden. This is true. The city (actually province & city) receive the tax revenue. Unfortunately, rental stocks are so low in Vancouver that it's very difficult to find a place to live among all the (apparently) empty condos and houses owned by people who don't live here. The average house price is $1.4 M. A small 2 bedroom condo will still set you back half that. Thus, the pressure is on the rental market and finding/encouraging a larger rental supply. So while the government is fairly paid by absentee home owners, there is an argument that the government should be doing something for its resident citizens. It's an experiment. Much like our recent 15% foreign buyers tax reported a few months ago. We're all watching the experiment. Perhaps our role is to serve as a lesson to other cities? :-)
zanny 10y ago
Sounds like all you need is a primary address exemption. IE, a property needs an associated primary addressee, rather than occupancy. You would not be able to claim a primary address for your second or third home, so if it goes unused it can then be taxed.
- aianus 10y ago
  Their second, third, and fourth homes are in Shanghai, Beijing, and Hong Kong. I don't think Canada has any access to their land registries.
spott 10y ago
Honestly, you aren't the problem. The problem is speculative investors who are buying lots of property in nice areas and sitting on them: not renting them, not living in them, but just letting them sit vacant. For a city like Vancouver, that drives up the cost of living for everyone as it drives the price of real estate through the roof, which is exactly what those speculative investors want. They have a perverse incentive to buy up all the property and not rent it out. A tax at a percent of the property value destroys the motive to do that, which is in the best interest of the city. There are exemptions for primary residencies and properties that are rented for at least 50% of the year by month are exempted.

by zaroth 10y ago

andkon 10y ago

Here's some math that should make this make sense to non-Vancouverites: A 1200sqft bungalow across the street from me sold for $2.8mm four months ago; it's now back on the market for $3.2mm. If you put 20% down, that'd be a monthly mortgage payment of $11,500. That's 1/6th of the average Vancouver family's annual income, per month! I have a feeling that if you're paying $11,500 a month on your mortgage, you're not worried about 1% of the value of your house, and you're definitely not worried about renting it out at a profit. You're just hoping it keeps appreciating enough to pay for interest and this new piddly 1% tax. That's who this tax is targeting. And I welcome it wholeheartedly.

quickben 10y ago
Just thinking about this in a detached, mathematical sort of way. The increase or 400,000 over 4 months, is more than 1% of the value. Depending on how crazy the market it, prices may jump even higher short term to accommodate the added speculation loss. In any case, hopefully Toronto doesn't reach that level of insanity.
ryanwaggoner 10y ago
A 1200sqft bungalow across the street from me sold for $2.8mm four months ago; it's now back on the market for $3.2mm. That's incredibly frustrating, I get that. I'd love to live in the Bay Area again, but it's too expensive to be worth it to me. What you're describing is a classic bubble. Speculation divorced from the underlying asset value. Presumably not enough Vancouverites would think that $3.2mm for a 1200 sg ft house is worth it to keep that value there. So it's temporary and will eventually pop. Bubbles hurt a lot of people while they run up and when they pop, but it's not clear that price controls do anything other than shift the pain elsewhere, usually while making it worse. I'd rather try and understand what's driving the underlying bubble and fix that if we can. The vacancy is a symptom, not a cause. That said, that's probably not something Vancouver can deal with directly, as it seems more tied to global macroeconomic conditions.
- orthecreedence 10y ago
  > I'd rather try and understand what's driving the underlying bubble and fix that if we can Foreign real estate investment? Driven by economic forces in foreign countries? I don't know if you can really "fix" that, but you can sure as hell tax it while it's happening. And 1% isn't bad at all if the houses are gaining that much in value over such a short period of time. Whoever's flipping these is certainly beating inflation still. EDIT: Read some more comments, particularly emptybits': > It's an experiment. Much like our recent 15% foreign buyers tax reported a few months ago. We're all watching the experiment. Perhaps our role is to serve as a lesson to other cities? So it seems as though they are trying to curtail the bubble caused by foreign influence, and my comment about "fix"ing it was made in ignorance. However, I still think it makes sense to tax both ends of the spectrum...the buyer tax limits new purchases, the "living here" tax limits houses already bought.

ethanbond 10y ago

The burden is lack of housing and therefore skyrocketing housing costs, what are you talking about?

pbhjpbhj 10y ago

>there are a million reasons why you might need to leave your house for 6 months or longer // Could you give a few examples? I know some rich middle-class (UK) people who have left their home for a couple of months whilst they've had renovations. And I know a few people, again pretty well off, that have travelled extensively abroad or lived abroad and rented out. Beyond that though? I do think they should adjust to allow small-scale local-owner rental. >Policies like this make it crystal clear; you own nothing, even owners are renters [...] // I think they make it clear that peoples housing needs are being preferred over rich peoples right to profit from those same housing needs.

sokoloff 10y ago
I might want to live in a warm climate for 183 days per year and Vancouver for the rest. I might have a temporary overseas assignment. I might have a military deployment. (Or UN or Peace Corps.)
- pbhjpbhj 10y ago
  3 months is a long overseas assignment in most roles, I guess your company would have to pay you enough to make it worthwhile. That's not the city struggling for housing stocks problem. Military deployment, seems reasonable, I wonder how many deployable military are living in these houses; also wouldn't the location remain your primary residence and so avoid the tax? Wanting to live somewhere else? That's exactly what the tax is for - pay up or change your residence.
  - sokoloff 10y ago
    You asked for reasons why someone might choose to move out of their house for 6 months or longer rather than rent it out. I gave a few; nothing more. By all means, I support the local government's right to pass whatever laws/policies/incentives they want as representatives of the residents and a policy could be good on balance even if it screws over a few edge cases. BTW, most of our overseas assignments are 2 years initially. 3 months seems more like a long business trip, not an overseas assignment to me.

theseadroid 10y ago

The sooner some of you guys get the idea that you own nothing, the sooner NA will become a better society. Living inside a society means your rights are not granted by the god or by nature, it is granted by other people around you, by the society. The right and law of ownership is the same. It is merely a consensus how the society distributes its wealth. The issue you described doesn't really exist in Vancouver, where it has one of the lowest vancancy rate in the world (0.6 percent), it's a seller market and rent is high enough comparing to local income/maintenance cost. BTW, Switzerland has the lowest house ownership in Europe according to [1] 1. http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/ http://qz.com/167887/germany-has-one-of-the-worlds-lowest-ho...

emptybits 10y ago

> A city should be happy to have the tax revenue with none of the burden. This is true. The city (actually province & city) receive the tax revenue. Unfortunately, rental stocks are so low in Vancouver that it's very difficult to find a place to live among all the (apparently) empty condos and houses owned by people who don't live here. The average house price is $1.4 M. A small 2 bedroom condo will still set you back half that. Thus, the pressure is on the rental market and finding/encouraging a larger rental supply. So while the government is fairly paid by absentee home owners, there is an argument that the government should be doing something for its resident citizens. It's an experiment. Much like our recent 15% foreign buyers tax reported a few months ago. We're all watching the experiment. Perhaps our role is to serve as a lesson to other cities? :-)

zanny 10y ago

Sounds like all you need is a primary address exemption. IE, a property needs an associated primary addressee, rather than occupancy. You would not be able to claim a primary address for your second or third home, so if it goes unused it can then be taxed.

aianus 10y ago
Their second, third, and fourth homes are in Shanghai, Beijing, and Hong Kong. I don't think Canada has any access to their land registries.

spott 10y ago

Honestly, you aren't the problem. The problem is speculative investors who are buying lots of property in nice areas and sitting on them: not renting them, not living in them, but just letting them sit vacant. For a city like Vancouver, that drives up the cost of living for everyone as it drives the price of real estate through the roof, which is exactly what those speculative investors want. They have a perverse incentive to buy up all the property and not rent it out. A tax at a percent of the property value destroys the motive to do that, which is in the best interest of the city. There are exemptions for primary residencies and properties that are rented for at least 50% of the year by month are exempted.