The milk cow

“There’s a foot of snow in Edmonton today and its minus 20 with the windchill. The real estate market here isn’t much better than the weather. I think this home owner might have made things more difficult for himself, but he gets points for honesty!” – Blog Dog Cameron

____________________________________________________________

Joanie teaches school. Jason’s an accountant. She makes sixty grand after 11 years. He earns $120,000 and hopes to be a partner in his small company next year. They live in mid-Toronto where they have a kid, a dog and a Mazda SUV. And a $1,525,000 house.

“But we paid only $810,000 six years ago,” she says, “and that was a giant stretch. We still owe more than $400,000, and now it needs a roof. Plus I’m worried sick about mortgage renewal in three years since it’s only 3.2% now. One and a half million dollars? What a joke.”

But the joke’s on them, thanks to MPAC, the dudes who arbitrarily decide what your house is worth, then tell the government so you can be taxed accordingly. In Ontario, as in BC with the provincial assessment agency, residential real estate is turning into the cash cow that revenue-starved politicians are desperate to milk.

So MPAC last week told Joanie and Jason what their house is “worth”, which is $300,000 higher than four years ago, and at least half a million more than they figure they could sell it for, in a rapidly-cooling market. The increase will be phased in over four years, but the couple’s convinced their $9,000 annual property tax bill will be reaching skyward.

“Unfair and arbitrary,” Joanie says. “We get our garbage picked up once every two weeks, pay a big extra charge for water and sewer, and are screwed over by Toronto Hydro. I’ve had it.”

This is no isolated case. MPAC says the average boost in real estate assessments in Toronto is 23%, which will mean a 5.5% jump in each of the next four years. This compares to the average 6.2% that BC properties leapt last year, according to BC Assessment, where $6.2 billion in property taxes is collected based on these valuations.

But at least homeowners in Vancouver, where housing is fading faster than the NHL, get an annual review. In Ontario the next one won’t happen until 2016 – which means taxation will be based on an early 2012 market, when bidding wars were erupting everywhere and SFH prices exploding to unheard-of levels. Those were the days when asking prices turned into opening bids, when realtors created auctions by establishing offer days, and any move on a place in Joanie’s hood had to be accompanied by a certified cheque for at least $100,000.

The world has evolved since then. A million-dollar property selling for 125% of listing price last winter now changes hands for 95%. That’s a $300,000 reduction in the street value of the same place, an effective 30% decline in valuation, and yet taxes will be trapped at the higher assessment, even as conditions deteriorate.

And crumble they will, as the economy grinds into a low-growth phase, job creation stalls and CMHC’s decision to cease insuring million-dollar homes takes its inevitable toll in the areas where Audis migrate home at night. Four successive years of property tax increases, not to mention double land transfer tax in Toronto (buyers of Joanie’s home would pay an extra $55,000 just to transfer the deed), can only hasten the correction.

Of course, higher assessments do not automatically mean higher property taxes (which are the unfairest taxes of all, based on neither income nor consumption). If a home’s assessed value increases at the same pace as all other properties in the city, then there might not be an increase, says MPAC.

In your dreams.

Toronto has a structural deficit and over $4 billion in debt. The budget chief warns of a looming crisis in 2014. The cops say they need $949.1 million a year, or 140 officers will be axed. The transit boss wants an automatic 2%-a-year tax hike to sustain the system. And city politicians recently voted (quietly) to increase their office budgets. Does anyone really believe a 23% jump in property assessment won’t eventually equate to a 23% increase in taxes?

So here’s a great example of what to expect over the next few years – cost inflation at the same time as asset deflation. Day-to-day prices keep rising, along with taxes, while the value of real estate erodes. In fact, one breeds the other. Most people are so indebted these days with borrowing at a record level, that layering on things like higher property tax only negates their ability to move up the property ladder. And just wait until all those former housing virgins in their downtown condos see what this does to monthly costs, while the value of their units plops. Snorkeling, anyone?

Like BC Assessment, MPAC is the greedy and voracious agent of governments patently unable to contain their costs. Cities and provinces should be ashamed at any taxation divorced from income or the ability to pay. Worse, basing future tax on past values is deceitful.

“I feel like protesting, or something,” Joanie says. “But we’re so busy.”

With a whimper.

189 comments ↓

#1 City that smells like it sounds on 11.11.12 at 8:49 pm

Furst??

#2 timmy on 11.11.12 at 8:50 pm

For those who brag that their crappy little Vancouver house is over a million and who use this to get lines of credit, they should also pay tax corresponding to the ridiculously inflated home value.

#3 steve on 11.11.12 at 8:55 pm

Wow all just to sleep at night …crazy

#4 David on 11.11.12 at 9:02 pm

In BC seniors 55 & older, a surviving spouse, and persons with a disability can get a low interest loan to defer all, or part of, their current annual property taxes on their principal residence. The loan only needs to be repaid when the property is sold. Simple interest is charged at a rate not greater than 2% below the prime rate of the province’s principal banker. I can’t see why any qualifying person in BC would ever pay their property tax.

Yes, I am aware of that. One more reason BC is a fiscal swamp. — Garth

#5 Supreme Commander on 11.11.12 at 9:03 pm

Agree with you Garth, Property Taxes are unfair, neither based on income or consumption, there are many nice places to but a home in other countries that don’t have levies such as yearly property taxes.

#6 bob on 11.11.12 at 9:05 pm

-youre either with us or youre with the child pornographers

#7 boston man on 11.11.12 at 9:07 pm

high taxes to sustain the lazy, unioninzed, unproductive city employees. there you go people….. your house is going down, your taxes up. remember that next time garbage collectors or teachers strike.

#8 NKVD Black Raven on 11.11.12 at 9:08 pm

Sorry little sympathy – a teacher and an accountant you’d think they’d know better.

How? — Garth

#9 Ken R on 11.11.12 at 9:22 pm

Property taxes are as unjust as it gets. Politicians will use any means neccessary to extract monies from taxpayers. Home owners are an easy target. Wait until governments start taxing cottage owners in unorganized townships at rates they would pay in an organized community. That’s a bombshell coming soon. So much for retiring at the cottage to save some cash.

#10 grasshopper on 11.11.12 at 9:22 pm

Did I miss the post on withdrawing money from my RRSP tax free?

Oh well.

I “get” property tax. I don’t mind paying my share to maintain the roads or fund schools. But I do object to paying for building tennis clubs or additions to the City Hall (so MORE municipal workers can be employed).

In Halton (Ontario), working for the Region is ranked as one of the top 50 employers…

I wish we all worked for such generous employers. Working for the municipal government “should” be a “good” gig. It should be fair and stable employment. But not “so” good that it ranks in the top 50 in Canada … while there are folks like me who pay excessive property taxes to fund it.

When it comes to municipal governments, less is more.

#11 T.O. Bubble Boy on 11.11.12 at 9:26 pm

Ok, but seriously, how can affording a new roof be a problem for this couple? They paid off $400k of the original $800k purchase in 6 years, and now have a mortgage that is under 30% of the house value. If they can’t find $10k-$20k for a roof, they should sell immediately and live off the $1.1M cash for a few years.

I never thought I’d say this, but get a HELOC already!

#12 TurnerNation on 11.11.12 at 9:28 pm

I mentioned this, a few days ago:

Welcome to “FordNation”.

From a local, Toronto, condo’s facebook group…
—-
“Did anyone notice an increase in their property tax? We were reassessed a month ago and it has been increased significantly.”

“- Mine said 10.11% this year alone.That’s going to hurt!
– Increase of 9.79%
– Mine was over 12.5%…”
—-

…are the replies.

#13 TurnerNation on 11.11.12 at 9:32 pm

You know, this chaste (of late), but circumspect weblog has lately perhaps taken more of a parochial approach to matters of the heart.

I suspect our forum host, after meeting perhaps thousands of Canadians who are totally and utterly screwed financially – locked into such deflating assets as the Orange Guy’s shorts, gold, housing – has moved beyond Blog Dog Carney’s in-action, to a more of a counsel of self-prevation.

Or as Mr. Lahey (Trailer Park Boys) says: Randy, the s__thawks are coming.

#14 What R U Smoking on 11.11.12 at 9:32 pm

#1 City that smells like it sounds

Regina???

#15 TurnerNation on 11.11.12 at 9:33 pm

*preservation

#16 Samson on 11.11.12 at 9:35 pm

Ibn Khaldun’s definition of government:

“An institution which prevents injustice other than such as it commits itself.”

Anchored = highly exploitable

#17 Freedom First on 11.11.12 at 9:41 pm

Beautifully written as per usual Garth. Although a tad optimistic:) and kind. Yes, property taxes……who knew:)

I was talking with a female friend this week. She is a divorced single Mom, mid-forties, 10 year old kid. Said she bought a town house 4 years ago, after her divorce, because she was “tired of throwing her money away on rent”. She has 0$ savings, and said her townhouse will be paid for in 26 years. Pays the same for her mortgage as what she could rent for in the same area. I listened, and just said as tactfully as I could, at different places in our conversation: I enjoy living in balance, being debt free, having a good cash flow, being diversified, having liquidity, and 0 financial stress. I have known her for 10 years, and she accepted what I said with ease, although I got the feeling it all was meaningless. The world being people’s peers, media, RE industry, ignorance and apathy, has done a very good job on many, many people. And world wide too, as we can see. Oh well, at the end of our conversation, she thanked me for our nice chat, as we talked about a variety of things. I don’t get upset for how people think, or their consequences they are facing, I try to help the best I can, but I am simply grateful it is not me. Many people in Canada are screwed, and many are not even aware of it……….yet.

#18 TurnerNation on 11.11.12 at 9:41 pm

Just logged in to check Futures but there is so much going on.

Ps. hoping this weblog will add a post on comma splices, parallelism, adverbs, and so forth ;-)

Update for C01’s crazy semi #2 (17 feet wide). Was Originally listed for$ 1,849,000 back in July. I’d pay about 600k, so it’s overpriced by a mill…

It faces onto a bleak industrial parking lot.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12501951&PidKey=-1090721779

For Sale: $1,589,000.

#19 Smoking Man on 11.11.12 at 9:44 pm

#15 TurnerNation on 11.11.12 at 9:33 pm
*preservation

Copying my style now are we, lol.

I new what you ment

#20 yogi on 11.11.12 at 9:45 pm

Another reason for why I sold my home 3 years ago and now rent. I understand that eventually my rent may rise to compensate (i doubt it though), but in the meantime, I will let me landlord pay the additional taxes. My current price/rent ratio is 330 (or 28 years). Did I mention I have two kids in school?

#21 will on 11.11.12 at 9:49 pm

shocking. totally shocking. down here in my bunker i have no way of monitoring such things. let me know when it’s safe to come out.

#22 Hugh Jasz on 11.11.12 at 9:52 pm

Just read the MPAC letter. My pile of sticks is apparently worth 27% more than it was in 2008.

I suppose I should be ecstatic, but somehow, I’d rather it have been undervalued. It is after all, because it’s half of the equation that the arseholes at Silly Hall use to figure out my contribution to their nonsense.

If there’s a silver lining, I think it’s that I could maybe sell my collection of pressed cornflakes for higher than the assessment……I’d hate to be stuck fighting MPAC on something that’s completely unfair and unrealistic.

#23 Mean Gene on 11.11.12 at 9:52 pm

This is really sad, a household with an income of $170,000 worried about paying the bills.

It’s such a shame there is so much income tax evasion and avoidance going on.

Also the pinhead denizens of BeeCee voted out the HST which applies to consumption items.

It’s no wonder governments are relying on property taxes to the pay for things.

Just about everyone expects someone else to pay for the the things we expect from government, maybe it’s time to change expectations???

Go ahead and pick something to be cut that applies to you, it’s easy to cut someone else’s benefits.

#24 JSS on 11.11.12 at 9:54 pm

Is Joanne’s last name “Cunningham”?

#25 East Van on 11.11.12 at 9:56 pm

Cities have little choice but to tax properties. They do not have the same ability to tax incomes as the feds who are squeezing them.

Anyone remember the CONs canceling the LIBs new deal for cities when they came to power?

#26 anobserver on 11.11.12 at 9:57 pm

Please allow me, between bites of kd, to show my utterly moral outrage, that this people were forced to spend, six years ago, $810,000 to put a roof over their heads. And now the roof is leaking. Oh, the inhumanity of it.

#27 Van Isle Renter on 11.11.12 at 9:59 pm

Out on the Island property taxes are abusive. Add in the transfer tax and I just don’t want to bother buying. Houses would have to drop 40% before I’d really start to feel like it’s just a house, not an investment, forced savings plan, retirement nest egg, etc.

It is, after all, just a house. The cities and towns are absolutely crawling with them!

#28 prairieperson on 11.11.12 at 10:01 pm

I’m glad to hear about Edmonton. I think we’re all agreed that Toronto and Van area are going to take a serious hit but, for me, the question is how does it spread from these centres? I’ve been tracking some house prices in rural Manitoba and nobody’s slashing their prices. Houses in the country often take a long time to sell so people are used to waiting. Yet, I see prices that seem unsustainable. People asking double the assessed price. Part of this is outflow from the cities as people retire. Sell a house in the city for a million or so and buy in the country for 600k because land is cheaper. With the money from the city house, it doesn’t matter what you pay for the country house. You still have a pocket full of cash. But won’t those 600k houses also drop in price? Doesn’t seem like anyone beleives it.

#29 Silver on 11.11.12 at 10:02 pm

Surprise….
Hmmmm….
Now that should really F..k small business on their property ASSessments… we pay way more than residential…
I know what it cost me running a 27 % average increase per year in Vancouver as a small business operator… I sold.

I’ve been yelling for years… about this… but no one cares… to listen…

Besides the B.C. Supreme Court’s Law Officer told me in no uncertain terms that I don’t own the property anyway… they (the crown) do.
And if I had a problem with that then… Appeal it to the Supreme Court by going to Ottawa…, as there is no place in B.C. to do that…

As I have a offer on my commercial residential real estate ….
I’m taking the profit and shutting down my business in Vancouver ahead of the rush.

I may as well cash out before the ASSessment authorities steal the rest of my profit for the political/public wage increases…

… going fishing.
And rebuilding my world with a C-Can home and shop.
I will lift and move my personal property investment next time they get stupid, leaving bare land to sell.

No fixed property investment for them to tax.
It’s all temporary work/live space now.
… and can be moved to a cheaper location next time the tax gets extra stupid.

The New Capitalist Gypsy.

Silver

#30 Randy on 11.11.12 at 10:07 pm

When I said that the current property tax system was unfair for people like me that have no children….

I had advocated a poll tax since my neighbours had basement apartments and relatives living with them…

I have no sympathy for the folks crying about their property taxes…

You benefit from increased property values because we paid for your infrastructure…so buck up and pay your increased taxes…

#31 FTP - First Time Poster on 11.11.12 at 10:09 pm

Very timely and still relevant – even more than 65 years after it was written:

“This new form of existence, with its mass psychology and social dependence on the fluctuation of markets and wages, produced an individual who was unstable, insecure, and suggestible.

He was aware that his life depended on boards of directors and captains of industry, and he supposed, rightly or wrongly, that they were chiefly motivated by financial interests. He knew that, no matter how conscientiously he worked, he could still fall a victim at any moment to economic changes which were utterly beyond his control. And there was nothing else for him to rely on.

Moreover, the system of moral and political education prevailing in Germany had already done its utmost to permeate everybody with a spirit of dull obedience, with the belief that every desirable thing must come from above, from those who by divine decree sat on top of the law-abiding citizen, whose feelings of personal responsibility were overruled by a rigid sense of duty.

No wonder, therefore, that it was precisely Germany that fell a prey to mass psychology, though she is by no means the only nation threatened by this dangerous germ. The influence of mass psychology has spread far and wide.”

Carl Jung, “Civilization in Transition”, 1946

#32 Patiently waiting on 11.11.12 at 10:09 pm

Ontario’s property tax scheme is going to hit some folks hard. Can somebody explain why Ontario’s strata/maintenance fees are so high compared to BC? I have been told it is because of additional snow removal, heating, and air conditioning costs. It does make sense that they should be higher in Ontario but comparable units in Ontario usually have maintenance fees that are two or three times highter than units in BC. That seems a little excessive to me.

#33 Vamanos Pest on 11.11.12 at 10:11 pm

A timely and well written/argued post, however, boring in that the solution is so simple: don’t buy or own, rent.

Next post please.

#34 Cow Man on 11.11.12 at 10:12 pm

Amigos:
MPAC is a joke. Our home in Owen Sound area went from $480,000 to $676,000 phased in of course over four years. Cob webs on sales every where with lots of homes for sale. One needs to have lots of spare time and resources to appeal an assessment. MPAC had no comparison sales in five years according to the assessment notice. Go figure!

#35 Inglorious Investor on 11.11.12 at 10:14 pm

If the average boost in assessed property value is 23%, then I must be one of the ‘lucky’ ones. MPAC says my home’s value has increased only 16.9% since 2008.

I’ve always felt that property taxes should be based on how much it costs to service the property––water, waste, snow removal, etc, plus your share of services like police, fire, and education––not on the market value of your property. But if anyone can justify basing taxes on assessed value, I’m all ears.

I’ve talked to many people over the years about property values. Those who own a property almost invariably want their home values to go up and up and up. For some reason, it makes them feel richer.

I hope those people are happy now.

#36 Inglorious Investor on 11.11.12 at 10:21 pm

“I feel like protesting, or something,” Joanie says. “But we’re so busy.”

I suppose her property taxes can’t be all that important to her then.

I am currently reading a book on the French Revolution. It reminds one just how bad things really have to get before ‘Jacques Bonhomme’ says that enough is enough.

#37 Sebee on 11.11.12 at 10:26 pm

Boomers are going to love paying higher property taxes on their retirement wealth stores.

Seniors are no doubt going to be pushed out of their homes bringing more inventory.

#38 john smith on 11.11.12 at 10:31 pm

DELETED

#39 Toon Town Boomer on 11.11.12 at 10:31 pm

Here in Saskatoon Mr. Mayor is very concerned about fixing our roads as it was a hot election topic. Guess where the money is going to come from? Then there’s issue of the bridges that needs to be adressed. How the hell are people suppose to pay for all this? it’s hard enough just keeping food in the fridge. Something has to give!

#40 Inglorious Investor on 11.11.12 at 10:35 pm

#91 Crash Test Dummy on 11.10.12 at 2:56 pm

“[…] consumers are doing a great job at managing their debt obligations,” says Nadim Abdo, Vice President, Consulting Solutions, Equifax Canada.”

Let’s parse the article you referenced:

“[…] consumer delinquencies have dropped to 1.22 per cent,[…]”

This means one out of 82 people is delinquent on their consumer debt. Honestly, does that sound healthy to you?

“[…] the lowest level since before the financial crisis.”

So, consumers are only really doing better as compared to the financial crisis. A ringing endorsement.

” […] consumer demand for new credit now is 9 per cent lower than it was prior to the financial crisis.”

This may sound good, but it bodes ill for the economy.

“Balances are declining for credit cards, personal finance and sales finance loans as borrowers turn to bank installment loans and lines of credit to meet their needs.”

Just a shift in credit? I see a lot of anecdotal evidence that people with homes are turning increasingly towards lines of credit rather than credit cards for their rolling credit needs. This is not good for multiple reasons.

“Consumer bankruptcies slightly increased slightly [sic] by 5 per cent from the same period last year.”

Bankruptcies up. But they shunted that fact way near the bottom of the article, perhaps hoping most people wouldn’t read that far?

And finally, the report focusses on non-mortgage credit. Maybe people are just way to maxed out on home debt to afford much more of other types of credit. Just guessing.

All this ‘spin’ is making me dizzy.

#41 AACI Okanagan on 11.11.12 at 10:41 pm

#194 Reid on 11.11.12 at 7:51 pm

dosouth and AACI Okanagan

I agree the market for higher end homes in Kelowna area is sick. Although DA is correct in that there are some sellers who are not motivated that exists in all markets where I have lived in and the MOI numbers here are so bad in the $600k+ market that it will not save the higher end market. High valued homes will be under pressure. Based on the data I have gathered, we plan to continue renting for the next 6-18 months to see what transpires.
————————————————————-
Most people who are not motivated to sell usually take their homes off the market in the fall and winter.. the problem that I am seeing a lot of is that many want/need to sell but can’t reduce their prices because they are leveraged to the hilt.

#42 Grim Reaper/Crypt Speculator on 11.11.12 at 10:47 pm

Joanie teaches school. Jason’s an accountant. She makes sixty grand after 11 years. He earns $120,000 and hopes to be a partner in his small company next year. They live in mid-Toronto where they have a kid, a dog and a Mazda SUV. And a $1,525,000 house.

“But we paid only $810,000 six years ago,” she says, “and that was a giant stretch. We still owe more than $400,000, and now it needs a roof. Plus I’m worried sick about mortgage renewal in three years since it’s only 3.2% now. One and a half million dollars? What a joke.”

====================================

Oh yeah…I want that dude as my accountant….for sure….what does his wife teach…let me guess….drum roll…..accounting…..

badaboom baddabing…acahachacha

#43 bruce on 11.11.12 at 11:06 pm

they are too busy helping themselves at city hall to help you.

#44 Jounce on 11.11.12 at 11:07 pm

When you sign an ‘I.O.U. it renders you into an ” I Own You!” now … as in your my ‘debt slave’ buddy.

You ain’t going no place as your toxic romance with enduring economic shackles gets ever more suffocating the longer the term.

There is only downward mobility here and no upside in a relentlessly imploding market.

#45 Sell in Canada, buy in the US on 11.11.12 at 11:15 pm

Sell in Canada and buy as much as you can in the US. Just like Warren Buffett and REITs.

http://business.financialpost.com/2012/11/10/no-better-time-to-buy-reits-now-invest-in-foreclosed-u-s-homes/

#46 Randy on 11.11.12 at 11:16 pm

If you live in Toronto or the GTA your property taxes might go up due to MPAC re-assessment but it’s a safe bet that you heating and electrical costs will go about 100% up due to the total mismanagement of the energy portfolio by the incompetent and corrupt Ontario Liberal Government…

BTW thanx for paying premium rates for my solar panels under the FIT program….

FAKE Green Energy….the annuity that keeps on Giving !!!

#47 Gladiator on 11.11.12 at 11:18 pm

Hey, Dr. WAYNE,can you advise on post 14, please?

#48 Snowboid on 11.11.12 at 11:23 pm

#25 AACI Okanagan on 11.11.12 at 10:41 pm…

The building we rent in has seen an increase in rentals as the condos just aren’t selling. I was surprised that almost 40% of the building is rentals, and why not when rent is under $ 1500 for a $ 450,000 condo?

The same scenario with rentals was apparent at other ‘high-end’ complexes down by the lake, we may end up in one of them next time.

The one unit we had ‘low-balled’ an offer on has come off the market, we may put another offer in when we return in May!

A couple of friends of ours are liquidating their rental SFHs, all located in South Kelowna – but have no solid offers after almost six months on the market. They are well-maintained and reasonably priced, so what gives?

The next year will definitely be interesting!

#49 South of 49 on 11.11.12 at 11:27 pm

In my town, a house assessed at $1 mil, the municipal tax bill would be $26,000.

I was successful several years ago at appealing my MPAC assessment and got a reduction in the assessed value of my home.

#50 45north on 11.11.12 at 11:34 pm

East Van: Cities have little choice but to tax properties. They do not have the same ability to tax incomes as the feds who are squeezing them.

Cities have no choice but to tax properties. Cities are at the bottom of the food chain.

My house (in Ottawa) would sell for more than my MPAC estimate. Or put another way, if I offered to sell my house for my MPAC estimate, it would sell very fast. And I don’t mean to offer a low price to start a bidding war.

You know there is a kind of “play world” atmosphere about MPAC. If owners complained too much they should be forced to sell – maybe not at the first level of appeal but after a point. Conversely MPAC should be forced to buy.

#51 city slicker on 11.11.12 at 11:36 pm

You just described stagflation in this post, its ok to say the word that fuels gold, Garth. Good read as usual sir!

#52 Lotusman on 11.11.12 at 11:36 pm

The assessed value of a property is only part of the forumla for determing the actual tax payable. The other part is called “mill rate”. Check here for the definition: http://www.investopedia.com/terms/m/millrate.asp#axzz2ByWrvTVQ

The fiscal situation at the municipal level will continue to deteriorate as F and the provinces continue to download governmental responsibilities. Expect more bridge collaspes (like those in Montreal) in the future when municipal infrastructure ages within the larger context of downloading and competing municipal finances. Why are local fire departments answering medical calls (stroke, etc.)? Health is supposed to be a provincial responsibility. We can chalk it up as downloading.

Expect to pay more property taxes in the future, that’s the last “milk cow” available!

#53 islander on 11.11.12 at 11:41 pm

“A million-dollar property selling for 125% of listing price last winter now changes hands for 95%. That’s a $300,000 reduction in the street value of the same place, an effective 30% decline in valuation”

Actually, that is only a 24% decline, or put another way, your math is off by 20%.

A $1 million property that cost $250,000 more last Spring can be had for $300,000 less now. The owner who hesitated selling is out 30%. Or put another way, you need to understand imputed loss. — Garth

#54 abbotsford guy on 11.11.12 at 11:44 pm

Keep in mind that property taxes are higher than average for homeowners, townhouse and condo owners in British Columbia. Real estate developers, estate properties can easily obtain farm class on their 5 acre or 160 acre properties and thus transfer their tax liabiltiy to a single mother in a condo trying to put food on the table. I know a guy that owns a 1.2 million dollar acreage in Langley and pays $ 300 per year. Thats right…three hundred. Of course he does “sell” some eggs from time to time. Only in BC…a reverse robin hood system….the poor helping out the rich. New this year in BC is that a horse riding arena worth $500,000 is now tax free if he sells one horse a year. Fake sales receipts help. Check out bc assessments web site for all the info.

#55 brainsail on 11.11.12 at 11:52 pm

Assessment Values Vs. Reality

We are ex-Pats that have been living in Central Texas for many years. Every year the assessments come in the mail and if it is higher than the previous year it is not a time to celebrate “Hey, Martha we are richer now!” Rather it is the time to do due diligence.

The assessment values are computer generated by two guys under a county contract. One with a computer and the other with an algorithm. Nobody physically inspects your property and nobody even drives by your house. The values are calculated by using recent sold prices, square footage, and house age. They make a lot of mistakes!

We are able to go the County website and view all of neighbor’s assessments and review the recent sold prices on the real estate sites. This year the assessments came out with about an addition tax burden of about $1000 for every house in our cul-de-sac. Several us talked about it and one went to the County and challenged based on a recent sale in our neighborhood. He won and the database was changed and we are back to normal.

My point is that if your assessment is higher than last year’s it is not a time to celebrate with a bottle of Dom Pérignon, it is the time to challenge!

#56 squidly77 on 11.11.12 at 11:55 pm

Here in Cowtown prices are falling precipitously. Watching prices in Hawkwood, Hidden Valley, Tuscany and Bowness. $75-100 thousand dollar price drops from original wanting-wishing (or perhaps needed) prices are now very common. These are modest neighbourhoods with a typical listing of about $400,000.

The stats being thrown around by local realtors and their board is a little perplexing and likely due to condo pre-sales being added to ordinary sales data, and a greater volume of million dollar homes selling that have seen 20-30% price deflation. Only time will tell.

#57 SAM on 11.12.12 at 12:01 am

Hi Garth

Love your work but I think you are inadvertently perpetuating a widely held falsehood that property taxes go up because property values go up. Your comment “If a home’s assessed value increases at the same pace as all other properties in the city, then there might not be an increase, says MPAC.” should get a little more playtime.

Municipal taxes are going up in Canadian cities not because real estate prices are so high but rather because of decaying infrastucture, costs of pensions due to demographics (retiring boomers), increasing populations, inefficiencies in service provision, etc.

Property taxes are not based on absolute property valuations but rather their relative valuations. The City of Toronto sets an annual budget. It then divides the total taxes it needs to raise by the total number of dollars of real estate within its taxation boundries. The result is the ‘mill rate’ or rate of taxation. If all properties increase or decrease in value at a similar rate, then a home owner will see little change in their taxation related to home values. It doesn’t matter if all the real estate in the city is worth 1 billion or 1 dollar. The taxes raised will be the same and will be raised based on relative valuation. Taxes go up because the taxation authority needs (wants?) more money – plain and simple.

example:
Taxes to raise/Value of real estate=mill rate
100/100=1
value of indivdual property X mill rate = taxes
$1 x 1= $1

A year later city decides on same budget (fat chance) and real estate has doubled in value:
100/200=.5
$2 x 2=$1

I thought that was assumed, but thanks for pointing it out. — Garth

#58 SAM on 11.12.12 at 12:05 am

Sorry:
$2 x .5 = $1

#59 Suede on 11.12.12 at 12:07 am

Gentlemen and Ladies,

Lest we forget on Rememberance Day today.

Seeing Pearl Harbour in person and a bunch of Marines having a great time at the pubs on Waikiki peach makes you think of how fortunate we were in the birth lottery to be in North America.

Though I don’t agree with any war I see how young these guys are being sent to do the bidding of their masters.

Why did you enlist? I ask, curiously.

“to pay for college”
“for a better life”

Made me relize how easy it is to kill or steal when you’re one step removed from the situation.

Would you steal cash from an old lady’s purse? Nope
But it’s a lot easier to steal from your company and add another hour of overtime

Can a politician shoot their enemy in battle? Nope
But it’s a lot easier on the conscience if you’re removed from the action and say the word.

Thank you for your service to all the hopeful cadets out there and those serving

#60 OwlEyes on 11.12.12 at 12:17 am

I dunno, Garth, I disagree that property tax is the least fair, since property is a kind of consumption. A SFH owner takes up space and uses resources in a way that a townhouse owner or condo apartment owner does not (I can’t believe I just suggested something nice about condo apartments). It costs $$ to push out those sewer lines, roads and sundry infrastructure. Why should someone with a small property footprint subsidize someone who thinks they deserve an estate in Mid-Town?

Since when is a 30-foot-wide lot an estate? — Garth

#61 Tony on 11.12.12 at 12:31 am

Re: #45 Sell in Canada, buy in the US on 11.11.12 at 11:15 pm

Real estate values could lose another 20 percent over the next year and a half in America. Remember the up months were right before the U.S. election.

#62 Tony on 11.12.12 at 12:32 am

Finally a post on a Sunday.

Every Sunday. Religiously. — Garth

#63 OwlEyes on 11.12.12 at 12:34 am

@#18 – when you look at that house on street view in Google Maps, to see it in context of Portland street, you have to wonder how a responsible city administration could allow that thing to exist; the bleak parking lot should never have existed either. If there were rules governing tear-downs, and the same applied to both sides of the street, it would be nice to stroll down that stretch of Portland on the way to the ballet. This in fact is a great example of what is wrong with Toronto.

#64 Concessionman on 11.12.12 at 12:48 am

Not likely the mill rate is going to drop…ever…

http://www.toronto.ca/legdocs/mmis/2010/cc/bgrd/backgroundfile-29367.pdf

#65 tkid on 11.12.12 at 1:00 am

#58, and Toronto infrastructure is in terrible shape. The Gardiner needs replacing in the next 10 years, and the City was only clued into that fact this year when they ordered sound surveys of the damned thing (chunks of concrete kept missing folks’ heads). Most of the roads in that city are in horrible shape, except for Bay Street which was repaved to impress the numerous political bigwigs who were in town for the G8.

God only knows how much money a new Gardiner will cost, plus all the other fix ups the City needs. But even as a renter I am doing my share – the numerous landlords who gloat on this site have all pointed out renters pay property taxes – without all the caterwauling I might add.

Joanne and her hubby enjoy an income of $180,000 and she’s whining about the roof and property taxes? I paid more in property taxes for a $200,000 townhouse in Bowmanville than I did for a $220,000 condo in downtown Toronto.

Joanne, property taxes in Toronto have been kept flat for nearly a decade, but the City is broke and has major expenses coming. Property taxes in your neck of the wood are going up to the level they should have been at. Either sell and get out – $300,000 gets you a nice house in Bowmanville and the area is good for children – or quitcher grizzling. But there is no sympathy to be found for you from me.

#66 of Mtl on 11.12.12 at 1:02 am

Shocking the govt would be licking their chops at the potential revenue from these rising ‘assets’.

Crappitoba moved their RE assessments up to every 2 years from every 4 to capitalise on price madness. Guess what’ll happen if/when prices drop. Back to every 4 years, no doubt.

How’s that property tax abolition movement going in NoDak?

#67 Concessionman on 11.12.12 at 1:12 am

It is an unfair system for sure…

– I have no kids but have been paying school portion for 20+ years
– I live on the north edge (rural) of my municipality, so have no street lights to maintain, no sidewalks or curbs to maintain, no water pipes (on well/septic) to maintain, yet pay the same rate as those 10 miles south of me that have this infrustructure.

Still not sure what I’m paying for other than cops (lol), fire (have pond/pump/gennie) and plowing the Concession Rd a couple times a year…..

#68 Nostradamus Le Mad Vlad on 11.12.12 at 1:20 am

-
“. . . and yet taxes will be trapped at the higher assessment, even as conditions deteriorate.” — Roughly goes with the following link (“These are merely”). Taxation, all kinds, is about to become a whole lot heavier.

“And crumble they will, as the economy grinds into a low-growth phase, job creation stalls . . . cost inflation at the same time as asset deflation. Day-to-day prices keep rising, along with taxes, while the value of real estate erodes.” — As said prior to and following this para., the baby is being thrown out with the bathwater.

RE and sports are two items that won’t necessarily be missed, esp. some of those nonsensical wages paid. They will happen, but at a much lesser rate than before. It will give sheeple a chance to re-examine their own lifestyles / lives.
*
#13 TurnerNation — “Or as Mr. Lahey (Trailer Park Boys) says: Randy, the s__thawks are coming.” — Ah so Quasimodo! You is correct. See following link — When China Rules The World has (apparently) been updated, and the new version is out, plus Chinese Consensus.

It does not explain the cycle change which is more of a spiritual theme, but merely takes a look at how the whole system is changing. Today was the first time I had ever heard of the book, so I’ll read it later. These are merely add-ons to what is happening in the western world.

#29 Silver — “The New Capitalist Gypsy. Silver” — Agreed. If various levels of govt. screw people based on false lies (we don’t have enough money so we’ll tax you more), then two can play at that game.

Either sell and rent or permanently rent. Lotsa people do. Owning a home is not a right, it’s a bloody stupid purchase. Bypassing purchasing a home lets people pay for their own pensions, not some grubby little politico who’s chomping at the bit waiting to get his hands on our money.
*
Foodstamps surge But the press release was delayed. How convenient; Wars Etc. “If central bankers start all the wars, are veterans heroes, or mercenaries and dupes?”; Germany “With Greece and Spain unraveling financially, if France’s economy starts to wobble, and if the French government starts defaulting on its debt obligations, this will be the absolute denouement of the Euro.” wrh.com and EZone can’t agree on anything; Cheapskate Queen advertises for cleaner, below living wage; Greece This is what politicos are good for — saying yes to the money men, no matter the consequences to folks;
Simple Fix Politicos and lobbyists don’t like simple. It’s too hard for them; Strange One and Strange Two. Don’t believe everything you read and Roll Over Beethoven; Oz Corporate bankruptcies way up; Shrinking Japan in more ways than one; Eerily 1987 all over again.
*
Obomba and Noddin; Yahoo Surely, if this happens, a lot of eyebrows will be raised and questions about dubya; Gold In My Sacks Peddling trouble across the world, starting in Argentina; Ice Age sooner than expected? Check with Alta., Skatch and Manitoba about their temps. this weekend; One min. clip Wonder if this has anything to do with drones and / or kickstarting the NMF? Sheeple are expendable, plus Add this to California’s troubles FEMA, New Jersey and GM; Tower of London robbed Another version of Ben Bernanke? Obombsta Rats scurrying away; Obomba Socialism is in, capitalism has gone; China, Russia and Obomba’s second coming; Foretelling one’s own demise; Nice win! Drink red wine and get lucky; 1:04 clip Dog and deer’s friendship.

#69 Dave on 11.12.12 at 1:24 am

In BC you also get a homeowner’s grant for the property tax on your principal residence. It definitely helps reduce the cost of your property tax.

#70 Roial1 on 11.12.12 at 1:32 am

#59Suede on 11.12.12 at 12:07 am

Lest we forget on Rememberance Day today.

Yes, you are right.

For me the enlightenment came this past spring. I visited the Canadian war graves in Belgium and France.
I was there to fulfill a wish of my late father to visit the grave of his brother. (18 yrs old when death found him.) He served with the Highland Light Infantry of Canada (Gault) regiment.
I read the stones. It is shocking how young they where.
Most where in the late teens and few over 25.
And there are so many stones. And so many grave yards. Especially in and around North western Belgium.
I now think that it would be good for ANY politician to be forced to go there before starting to spout about the “Glory” of war.

#71 Interesting Times on 11.12.12 at 1:58 am

HGTV Virgins get out there and start low balling these realtards by 50 percent. Don’t waste your time going to open houses when you could just sit on MLS and low ball these used car salespeople by email. Get out there and get your revenge, show them that you are not as stupid as the show protrays you!

– jobs being lost everywhere still and the Canadian economy is slowing down.

– austerity starting already in Canada. Many in government jobs will be bye, bye.

– all manufacturing jobs have moved to Asia and back to the US.

– 70 percent of CDN living pay cheque to pay cheque and have no savings and over 50% have no pensions

– 60% of boomers 60 years and older entering retirement in debt

– empty condos being built everywhere and will be going for 50 percent off soon.

– seeing empty homes all over the MLS, can you say power of sales have started

– for lease signs everywhere in business districts and commercial areas, I guess business has moved away from Canada

– Canadians are 163 percent in debt! More than the US, Ireland, and UK when they had there crash.

– Over 6 months of dropping RE sales.

– And remember a home is only worth what a buyer will pay.

– the realtards, banks and builders are in full out panic

The 50 percent crash is here my virgins get out there and start low balling as the time is now for your revenge. Don’t sign up for bank slavery like the other 70 percent of the virgins in Canada. They are screwed for life now as they were sold the Koolaid by the RE industry!

#72 prairieperson on 11.12.12 at 2:18 am

I downsized two years ago to a sfh that was half the size of my previous one. Sold in Victoria, bought there again. Mistake, I expect. However, what I see is that people may be selling their properties and moving outside various cities but they aren’t downsizing. They’re retirement age, kids gone, and they’re bldg or buying 4,000 sq ft houses with top end finishing and furnishings. Why? Do they think it’s an investment? Just because they can? Who do they think is going to buy these houses? Young families who need allthose bedrooms and bathrooms? Really? Retirees coming along ten years from now? And a lot of these places are outside of towns, cities, away from hospitals, doctors, stores. You have to drive to buy a litre of milk. Obviously, I’m missing something. Do any of these people actually say before they build or buy, I’m 60 or 65, who, in 10 years, is going to buy this place? On this blog we talk about young house horney couples but from what I see, there are a lot of old hhcs around.

#73 hawk on 11.12.12 at 2:25 am

A good article but what can one do about governments that engage in massive theft of the citizenry’s wealth.
Contrary to popular mythology countries are not “free” countries.

#74 DonDWest on 11.12.12 at 2:29 am

The people are getting exactly what they deserve when they believe in this farce called democracy. No system of government has historically caused more death in such a short order of time.

Not that I’m advocating we go back to the systems of old, but at least with a monarchy the king’s/queen’s head often ended up on a platter if he/she screwed up. Not to mention the king/queen also had to deal with long term consequences, whereas today with pathetic democracy our leaders bribe/spend their way to fame for 4 years, all but to leave the nation in ashes for their “lucky” successors.

Oh well, life goes on; the fools will keep on voting and keep on believing. They will continue to believe in the false hope religion that is democracy. Democracy, it truly is synonymous with a suicide pact.

Anyways plebs, I hope you enjoy your real estate paper gains – and the real taxes you’re going to have to pay for it. Let’s just say I called this a few years back, and I was met with people going lawyer on my ass, suggesting that increasing real estate values don’t correlate with increasing property taxes. They showed me the documents – see DonDWest you don’t know what you’re talking about. I showed them the pen – see this you fool?! This pen when wielded in the hand of a politician can change the documents by tomorrow. So here we are, but it’s all fine because you’re voting for a silly name on a ballot in a couple of years to fix this, right?!

#75 Riding the Pine on 11.12.12 at 2:56 am

#60 OwlEyes

The developer pays to install those services, plus possible future upgrades, and usually a “gift” to the city for being able to develope the property – cash, land donation, etc. The purchaser of the home pays for the infrastructure through the developer.
In theory (not really true for any type of property), the city then has a larger tax base to draw from to pay for and grow services. This is one of the big misconceptions in community planning. Other more complicated and indirect aspects come into play.

#76 Tom from Mississauga on 11.12.12 at 3:24 am

TTC has subway trains over 40 years old. Twice last week I was on a train the electrical system was failing.
Haven’t to been on a streetcar less than 25 years old. The rain from Sandy leaked through the roof.
Need to build a Downtown relief line, Scarborough and York U extentions as well as another east/west line to the north on Sheppard or Eglinton.
New buildings at habourfront have no transit infustructure built at all.
2%? It needs a lot more than that. Toronto Transit needs billions and billions, soon.

#77 martin9999 on 11.12.12 at 3:25 am

Since when is a 30-foot-wide lot an estate? — Garth

Now days an estate is an estate. Even if it is 25-foot-wide lot

Sometimes Garth, you should go out; just a bit more

#78 Skip Breakfast on 11.12.12 at 4:11 am

Great article. Totally agree, especially in your forecast regarding property taxes. I’ve believed for a long while that property taxes have no where to go but up in this nasty deflation. Tax authorities are desperate. A deflation crushes tax revenues as business fail and incomes dwindle. The authorities have to keep the bloated game going as long as possible, however, and that means any tax and penalty they can raise will be raised. Property owners are stuck and easy prey as a result. It will be yet another nail in the heavy coffin that is our real estate–eventually more and more people will reject real estate based on the fear of escalating property taxes. First they go up 5%, then 10%, then 15%. It gets to a point that would-be buyers say, what next? How high can it go? I won’t buy without knowing where the end is. Which only perpetuates the downward spiral of dropping values and the need for authorities to grab more taxes. Unfortunately, the property tax system will be forced to create a two-tiered system where they finally accept you can’t get any more blood from a stone and they start to leave the broke homeowners alone, targeting instead only those homeowners who can pay. The richer ones. And you will see a more “progressive” property tax system that gouges only those who can pay, driving those people even further away and underground. A two-tiered property tax is coming, I will bet on it, whether by decree or de facto (as they simply stop bothering to try to collect from the broke-ass homeowner and target anyone with any cash in his bank account).

#79 Uwinsome on 11.12.12 at 4:19 am

SPAIN: the country is dotted with empty housing of all kinds, perhaps as many as two million units, by some estimates.

http://www.cnbc.com/id/49784935

#80 Onemorething on 11.12.12 at 5:12 am

the dudes who arbitrarily decide what your house is worth

Haha love it!

There is no escaping the downward spiral of not getting out of RE in time especially with buyers are 1 in 50 and are looking to low ball big time to cover off this inflated value when doing the math.

#81 For Sale on 11.12.12 at 6:55 am

My neighbor and I get exactly the same services; garbage pick up, school bus etc., but he pays more property tax. It shouldn’t matter if his house is bigger or that he has an extra toilet.
Point is, local property taxes are supposed to reflect local services, so, since we all get the same services, every property should pay exactly the same tax amount in their tax rate area.
Am I wrong?

#82 Picasso on 11.12.12 at 8:15 am

Making a 100G a year just living in your house. Only in Canada. lol

#83 Devore on 11.12.12 at 8:19 am

Cities and provinces should be ashamed at any taxation divorced from income or the ability to pay.

If you cannot afford something, you should sell it, no? Or not buy it in the first place. One of the expenses of owning a million dollar house is paying property taxes on a million dollar house. If you drive a gas guzzler, you don’t get to credibly complain about the cost of filling up. If you live in a 4000sqft house, no one takes you seriously when you complain how expensive it is to heat it.

#84 Picasso on 11.12.12 at 8:20 am

Oh ya… that’s a 100G a year tax free too.

#85 Devore on 11.12.12 at 8:26 am

Out another way, we’re told constantly how we shouldn’t buy things we cannot afford, and that’s how things should be. Can’t afford a house in the city? Buy in the burbs, or buy a condo. Can’t afford to buy in your choice area? Buy somewhere else, or rent. But when home owners can’t afford their houses, it’s a tragedy.

In most cities, renters pay much more property taxes than equivalent owner would, due to owner-occupier (principal residence) discount most cities give. To the subject of today’s blog: suck it up princess, or ask your accountant husband what he recommends his clients do with overvalued assets.

#86 NYCer on 11.12.12 at 8:59 am

So my friend who bought the condo 1.5 years ago and whom I warned about the condo crash is now telling me is having an open house this coming Saturday to test the market before it goes down too much. This is the same one I posted about and told her to rent since she is just moving out on her own, who spent over $20k renovating a very old condo (cheap to buy, expensive maintenance fees) and now wants to sell after 1.5 years.

Good luck to her, I didn’t have the heart to tell her I told you so. She’s also living in a crappy area too, along Park Lawn and Lakeshore and wants to move closer to the city.

We shall see what happens.

#87 TurnerNation on 11.12.12 at 9:17 am

A little secret for all. As per the former Toronto mayor, John Sewell, now a police critic, on average Toronto police answer one call per shift, each. One. So what are the doing the rest of the time? Nothing. Or Revenue Collection.

Now you know why the State piles on new law after new law never to be removed. In the past two years you are now a criminal if you idle your car for more 3 min, or if you touch your cell phone, or if you are at .05 BAC.

Yet the socilaistic police force tells us if they lose even one cop we’ll be taken over by the gangs. No mention they are brought here under Harper’s hug-a-thug immigration policy.

Anyway, I used to hate the cops for this now I feel stupid. I spent 4 years in school and many years working just to reach their level of wages!

Parents, let your kids become Toronto cops! Highest paid in the country. FordNation knows to take care of his private army, first.
Don’t waste money on student loans.
Dangerous? I wager that school teachers face more assaults, daily, than cops. Construction workers are more likely to die on the job.

Free police college.
After 4 years you’ll be earning $85,000-100,000 plus whatever OT or paid duty you care for.
Paid duty $65/hr.
Job-for-life.
Free legal defense.
Full pay even if you are dishonourably suspended.
Job reinstated even if you break the law (recently a Durhram area cop who stole a firearm from evidence but got his job back).
Full health, dental, vision, drug plan for you and your family forever.
Sick days, personal days, vacation days, stress days.
Indexed DB pension.
Rooms for advancement, why not drive a desk one day.
Endless salary increases.

#88 detalumis on 11.12.12 at 9:23 am

#83 what happens when your 1,153 square foot bungalow becomes a million dollar house and you are forced to move after you retire because of the tax bill. I see my biggest problems being the escalating costs of utilities and property taxes, both things I have zero control over. I think that if they keep downloading to the bottom tier they should make property taxes deductible.

There is no way I could stay in my house because of taxes in the future and in a way I can see it sort of like back in the day with the “block busting”, it’s a way to force all the Pore Folks out and replace with the ones who feel they deserve to live here more.

#89 young & foolish on 11.12.12 at 9:29 am

Good post ….

The tax man will get you either way. Today MPAC, tomorrow RRSPs, and maybe even TFSAs. Today RE is overvalued, tomorrow perhaps your equities (where there too, you must sell at the top to realize your gains).

You will pay to live in a civilized society, where politics always trumps economics. But you need not pay more than you have to. Buyer beware!

#90 Steve on 11.12.12 at 9:40 am

Does anyone really believe a 23% jump in property assessment won’t eventually equate to a 23% increase in taxes?
____________________________________________
Garth, there is already enough evidence in past posts to indicate that some believe their MPAC assessments lead immediately to tax increases. Your statement above, which can be read as suggesting correlation, is atypical – you are usually far more precise. I believe that there is no correlation between the percentage change in assessed property values and the percentage change in taxes collected.

Unless your property assessment is not fair, compared to your neighbours, it is not an issue. You should certainly appeal if there is an error. What is most relevant to the amount of tax that your municipality chooses to collect is the state of the municipality: its growth, its decay, and the quality of the people running it. This determines how much money they want or need to spend, and your muncipality is where the focus on controlling taxes should be.

We will all be fine with MPAC, etc., as long as they are consistent in their approach. After all, it is the value of our property, divided by the total value of the all the property in the municipality that defines our share of the tax bill. If the values all raise and fall consistently, then our share remains the same.

#91 Tony Right on 11.12.12 at 9:44 am

Yay, another story about a rich couple from Toronto! The other 99% of us reading this blog would love to have all these rich people “problems”.

#92 Steve on 11.12.12 at 9:50 am

#81 For Sale on 11.12.12 at 6:55 am
_______________________________
Actually, I prefer that those who can afford the McMansions pay a larger share of the property tax, even if the services delivered to us are all of the same value. That way my share is less. This (current) method biases the property tax system to be wealth dependent, although I am certain there are examples of large properties owned by the bankrupt. Perhaps that should be stated as ‘house rich’ dependent…

#93 Realitybytes on 11.12.12 at 10:06 am

Garth, I don’t understand the hate on property tax??

It IS a consumption tax… an indefinite one that people are aware of when they purchase a property. And they expect their property to appreciate, and know the tax will climb with it.

That’s like people complaining about the price of gas after they buy a hummer!

Who would do that?

#94 Inglorious Investor on 11.12.12 at 10:17 am

#46 Randy on 11.11.12 at 11:16 pm

I looked into the microFIT program myself a while back. I don’t know what rate you are being paid, but when I considered it, the rate was 83 cents/kWh.

I calculated the inflation-adjusted, after-tax ROI to be 1.44%.

That does not include things like maintenance costs; repair/parts replacement costs; hydro connection fee (about $1,500); extra insurance costs, billing fee, etc. Furthermore, it is likely that you would need to replace your roof before the installation (recommended). For me, that would have added about $9,500 to the roughly $70,000 project cost. If you finance the project with a loan, fuggettaboutit.

Solar installers like to claim an ROI of 10 – 15%. The reality is somewhat different.

#95 EIT on 11.12.12 at 10:19 am

anger RISING

#96 cry me a river on 11.12.12 at 10:22 am

poor Joanie and Jason, their roof needs fixing.

but they just made $700K in the last few years for doing absolutely nothing but living in their fine house.

booh hoo hoo…..can you hear that little scratching sound? That is me playing a sad, sad song for you on the world’s tiniest violin.

grab a brain, and look at the people and the world around you. you are really lucky, and you shouldn’t be whining.

end rant

Always interesting how a principle – such as arbitrary taxation – is completely lost in clouds of envy. We are so human. — Garth

#97 TimV on 11.12.12 at 10:30 am

Property taxes are the only routine wealth tax we have. As a wealth tax, they are not perfectly correlated with wealth, but income taxes are certainly not perfectly correlated with income. I don’t see how a wealth tax is somehow less fair than an income tax. And income is highly volatile, whereas at least wealth has some stability (barring stupidity).

That said, $180k/year isn’t enough for a $1.5m house. Perhaps that’s the real problem.

#98 Uwinsome on 11.12.12 at 10:48 am

# 81 For Sale Said: “My neighbor and I get exactly the same services; garbage pick up, school bus etc., but he pays more property tax. It shouldn’t matter if his house is bigger or that he has an extra toilet.
Point is, local property taxes are supposed to reflect local services, so, since we all get the same services, every property should pay exactly the same tax amount in their tax rate area.
Am I wrong?”

I think you are. If you have a bigger House, you potentially can house more people, create more garbage and most importantly (with that extra toilet) make some additional fertilizer that has to be treated. If you play – you should pay.

#99 Regan on 11.12.12 at 10:50 am

No surprise that blog commenters think MPAC is to high – they think all RE prices are too high. And yet, this is what they sell for and, therefore, that is their market value. And why shouldn’t the city, that has to coordinate all the services needed to prevent itself from sinking into I Am Legend chaos up in here, get a piece of that action? I’m more concerned that the City hasn’t made a bundle already off the pace of new construction. Isn’t a boom time a good time to pay off debts and put some money away? I need and want good services, and I don’t mind paying collectively for them through tax. I have a $300 plumber coming today to clean out my drains – but if it’s a City tree blocking them, the City picks up the tab. Thanks, City!
As for the overextended couple in the million dollar home that can’t fix their roof – your problem is not MPAC. Your problem is that you are totally overextended. The upside of low inflation is low interest rates (usually), but the downside is that those payments that stretched you 6 years ago will continue to stretch the whole life of your mortgage unless your income takes an unlikely jump. Sell and move into something more affordable. You’re not underwater. You haven’t lost your job or health. It’s not like you don’t have choices.

#100 nnso on 11.12.12 at 10:51 am

“Canada cannot afford to be a preparatory school for people from European countries whose ultimate destination will be with our neighbours to the south.”
Charles Dickie
Conservative Member of Parliament, 1923

Today conservative have prepared the Canadian to south by keeping the Canadian dollar high and Increase the amortization to 40 years.

High Canadian Dollar, High Property value.
Once in a life time opportunity to ditch Canada.

#101 Stickler on 11.12.12 at 10:57 am

The problem is cost control. No government branch can keep them contained. The fed offload all they can to the provinces, the provinces off load all they can to the municipalities…and none of them can control their costs.

Solution: 15% cut to ALL government workers compensation, phased in over 3 years. From the PM to the police & teachers. ALL.

You are welcome.

#102 Ozy - High property taxes (linked to value) should be maintained on 11.12.12 at 11:12 am

High property taxes (linked to value) should be maintained, the modern exploatation system will not function without them.
And we need people exploited at maximum, since they are “stupid” anyway.
This is a Collonial regime cosmetized as trasitioned in a fake-democracy (very well camouflaged oligarchy, a true neo-global-collony). More to come.

Kunta Kinte anyone?
http://www.youtube.com/watch?v=H_A2o8ICcIQ

#103 GTA Engineer on 11.12.12 at 11:26 am

Garth – you’re wrong.

Tax assessments are not used to increase taxes. Where’s your evidence of this? It’s definitely not historical evidence. Although tax increases are regular, they are orthogonal to the tax *assessment* system, which itself is revenue neutral. ie. if assessments go up 20% on average, the tax rate drops 20%. Net no change. Yes, if your house assessment goes up 30% at the same time, your taxes will increase. Likewise, if your assessment goes up 10%, your taxes will DECREASE.

Overall tax increases are a separate issue – ALWAYS. They are *not* buried in rising average assessments.

From the City of Toronto website: (http://www.toronto.ca/taxes/property_tax/faqs.htm):

“The effect of reassessment, at the municipal level, is “revenue neutral” and does not generate any additional revenue for the City. With a reassessment, the City must adjust the tax rate to remain revenue neutral, so no new funding comes to the City of Toronto as a result of property valuation changes.”

Note the word ‘MUST’. Time to get your facts in order.

I understand the system quite well. Rising assessments are the foundation upon which municipal politicians inevitably build higher revenues. It will come. Return here in 2016 and show me taxes have been orthogonalogically transfixed. — Garth

#104 GTA Engineer on 11.12.12 at 11:28 am

And note the follow-on comment from the same link:

“The City may need to increase taxes due to its budget requirements, however, this is separate and not related to reassessments.”

Separate. Not buried within the reassessment.

#105 broadway skytrain on 11.12.12 at 11:39 am

#81 For Sale on 11.12.12 at 6:55 am
My neighbor and I get exactly the same services; garbage pick up, school bus etc.,……………………………………….

of course you are joking, nice. really funny!

my piece of empty land in the inaccessible bush in bc pays the same taxes as fully serviced lots in town.

we have ;

no road.
no water.
no septic.
no power.
no schools.
no garbage or recycling collection
no fire protection
no school bus or streetlights
no police have set foot in the area for decades.
no sidewalks
no community centers
no phone service
no public transportation
no transportation infrastructure whatsoever
no libraries
no snow removal

so, you see its very clear taxes have nothing to with services offered.

OH, my mistake, there is one service offered which seems to be world class, the building department will track you down and hound you relentlessly if you build a simple platform among the steep rocky , dense bushland, like a flat spot to put the bbq.

#106 GTA Engineer on 11.12.12 at 11:43 am

I understand the system quite well. Rising assessments are the foundation upon which municipal politicians inevitably build higher revenues. It will come. Return here in 2016 and show me taxes have been orthogonalogically transfixed. — Garth

———————

That very well may be the case, for as with investments, past events are not always an accurate predictor of future ones. I can’t argue against a prediction, though I’ll throw mine own in the ring and maintain that assessments will continue to remain distinct from tax increases. The likelihood of tax increases in the years to come is pretty damn near 100%, but I believe those increases will continue to be levied outside of the assessment system. If that’s not the case, people are going to get very pi$$ed. Then again, it seems like most of the sheeple, including many comment posters (let the flames begin) already think that an increase in assessment means an increase in taxes, which may make the actual institution of such a system something that flies ‘under the radar’. Were it not for loudmouths like me that is..

#107 maxx on 11.12.12 at 11:43 am

“With a whimper”. Brilliant, Garth, says it all.

Oh yes, MPAC. Arms-length agent affording greater control over tax payor queries and objections. Before we dumped our condo in Ontario 6 years ago, we had been assessed at an almost 40% increase a few years previously. I had contacted the geniuses at MPAC and got absolutely nowhere. Stonewalling and canned remarks aplenty, through mouthpieces attached to proprietary software. That told me all I needed to know about the future of Ontario.

There is virtually no control over property assessments, nor reductions in municipal services.

Many wanting to hold on to RE will need to make large sacrifices going forward in order to keep up with ballooning taxes, soaring hydro rates, meterage and repairs. Those increases will chew through disposable income like it never existed.

And retirement? Public pension and healthcare reductions on top of future taxation levels, energy and surprise fees? Better re-learn how to enjoy those interminable Canadian winters again.

RE, finance, investment protection and lifestyle flexibility smarts are the new status symbols.

#108 Snowboid on 11.12.12 at 11:45 am

#85 Devore on 11.12.12 at 8:26 am…

“…In most cities, renters pay much more property taxes than equivalent owner would, due to owner-occupier (principal residence) discount most cities give…”

Huh? As a renter in Kelowna, I don’t pay any property taxes, maybe you mean the landlord pays more?

Of course, if one assumes that renters cover all of the landlords’ taxes, strata fees, mortgage, maintenance, etc – then you are correct – but is there any city in Canada where rents are high enough to cover the landlords’ expenses and allow for a profit?

#109 Snowboid on 11.12.12 at 11:48 am

#87 TurnerNation on 11.12.12 at 9:17 am…

Why not apply? If you haven’t walked in a ‘cops’ shoes then you have no right to comment.

But it is apparent you still have a ‘hate’ on for them!

#110 Dr. WAYNE on 11.12.12 at 12:13 pm

#1 City that smells like it sounds on 11.11.12 at 8:49 pm

Furst??

“City that smells like it sound” … LOOKS very much like an a$$hole.

#111 Steve on 11.12.12 at 12:13 pm

I understand the system quite well. Rising assessments are the foundation upon which municipal politicians inevitably build higher revenues. It will come. Return here in 2016 and show me taxes have been orthogonalogically transfixed. — Garth
__________________________________________

Garth, a connection between MPAC increases and tax inreases till does not make sense to me. Higher municipal revenues will tend to occur regardless of assessments. Assessments are definitely the foundation for municipal revenues, but this is true whether they are rising or falling. If assessments were going down at 6% per year, should we expect taxes to drop? I say no. The funding ‘needed’ to run the municipality is independent from the changes in (MPAC) value of the existing housing stock, where services are fairly static.

I simply see no causality to go from rising assessments means more taxes. More taxes will likely occur, but blaming assessment increases is misdirected. Keeping property taxes in control is accomplished by keeping your municipal issues and politicians in control, not by raging about MPAC, however imperfect it may be.

#112 Linda Pearson on 11.12.12 at 12:16 pm

I understand the system quite well. Rising assessments are the foundation upon which municipal politicians inevitably build higher revenues. It will come. Return here in 2016 and show me taxes have been orthogonalogically transfixed. — Garth
*****************************
orthogonalogically – okay, that’s not even in the dictionary. What’s it mean?

A secret between us engineers. — Garth

#113 Dr. WAYNE on 11.12.12 at 12:22 pm

#47 Gladiator on 11.11.12 at 11:18 pm

Hey, Dr. WAYNE, can you advise on post 14, please?

Actually … it is probably REGINA … I should have ‘smoked’ the good stuff daily to make the six years I lived there bearable.

#114 broadway skytrain on 11.12.12 at 12:22 pm

#109 Snowboid on 11.12.12 at 11:48 am
#87 TurnerNation on 11.12.12 at 9:17 am…

Why not apply? If you haven’t walked in a ‘cops’ shoes then you have no right to comment.———————————————–

riiiight….

does one need to steal to comment on a thief

does one need to be a lazy, unproductivre, unethical drag on society to comment on the city union workers who stand around for 7.5 of 8 hrs on the job

do i have to make ignorant , illogical, rules about who can comment on what topic, in order to reply to you

the nanny state sickens me.

#115 Thomas W on 11.12.12 at 12:24 pm

Very good article about the Australian housing bubble. Impress your friends with scary stats and their theoretical underpinnings.

http://www.debtdeflation.com/blogs/2012/11/01/a-bubble-of-ludicrous-pettifoggery-2/

#116 PeterfromCalgary on 11.12.12 at 12:34 pm

In Calgary we have something called revenue neutral assessments. Basically as average property values go up the tax rate goes down and if average property values go down the rates go up. If the city needs a revenue increase they have to approve a tax hike.

Of coarse you still end up paying more taxes as the city spends more and individual assessments can be done incorrectly leading to an appeal. But a least tax hikes are called tax hikes not re-assessments.

It is not a perfect system but it seems better then Toronto’s. But hey at least you guys in Toronto have Lake Ontario and can drive to Buffalo to shop.

#117 Dupcheck on 11.12.12 at 12:37 pm

Garth great piece.

To MPAC/GOV, if you are going to charge more tax, what are we getting more in services? How is justified? This is a pure form of bullying. We pay taxes to get bullied by the GOV. Wow hold on a minute here. Since when is GOV a MOB or a Gangster?

MPAC is not a fair organization and it should be abolished. We should change the constitution to include a fair establishment of property taxes. A house is a sanctuary a roof over your head. Gov please do not play games with our basic needs such as a roof over our heads. Please do not turn us all into slaves, or we will soon revolt. Enough is enough.

Another thing, the Gov gives a tax break to the senior citizens on property tax subsidy so they do not revolt. So less people to complain. The younger generations are too busy with their lives to even think about revolting. See the big picture, the machine has made us obedient slaves so they get their agenda done. They have molded us day by day into slaves !!!! They keep pulling on that rope a little at a time, but without breaking it. It is evil and sad!!!! Wake up!!!

#118 Tom from Mississuga on 11.12.12 at 12:45 pm

Follow up on TTC funding post #76. For somebody traveling from say Etobicoke to the Airport the return fare is $10.40. For full-time minimum wage one might refuse the work as 1/8 of your pay is transit, not including income tax. Prices increases Jan 1. In New York City, go anywhere return for $4.00.

#119 Brad in Calgary on 11.12.12 at 12:55 pm

Garth – When can the Calgarians (like me) expect to see your official blog apology? You know, for lumping us in with the other stressed markets, even though we stated multiple times (with statistical evidence to support us) that the Calgary market is strong and will continue to be. Check out the latest numbers – they aren’t as funny as your rhetoric, but they tell an interesting story nonetheless.

#120 Iconoclast on 11.12.12 at 1:20 pm

The ideal tax, of course, is the one that *you* don’t have to pay.

Homeowners don’t like property taxes.
Salarymen don’t like income taxes.
Anyone with assets wouldn’t like asset taxes.

So true wealth taxes are not likely in our future, because governments are run on behalf of those with the wealth. (duh!)
But you might see an RRSP asset tax because only the LIttle People have put their money in plain sight in RRSPs.

#121 DonDWest on 11.12.12 at 1:23 pm

#117 Dupcheck

“Since when is GOV a MOB or a Gangster?”

Barrowing this statement, just comes to show how many people behave as if they were born yesterday.

“The younger generations are too busy with their lives to even think about revolting.”

Stop listening to your baby boomer mom who lectures you about paying your dues and contributing to society by working two, maybe three, jobs. As hard as it is to believe, she doesn’t have your best interests at heart, you’re a cow for her retirement.

#122 Hoof Hearted on 11.12.12 at 1:26 pm

Here in HAMville Richmond BC….

I say we will become a disaster. City Hall has gotten spoiled with all the no brain HAM $$ coming here.

Last year they said an average 3 % property tax increase.

Mine was approx 30%…..an $800 increase. I previously asked BC Asessment WTF was going on…and they said my class of property was due for a review. Well I found out that the sample base was only 3%, as our class (ALR) generally has fewer comparables ie fewer annual sales.

It is a racket, between City Hall and the Assessors, I was convinced of this years ago.

What is scarrier is we have the Olympic Oval, a white elephant upon conception. People are starting to realize how much of our taxes are being thrown into denying this, at the cost to programs elsewhere. Last year they built a $1Million dollar climbing wall…this year they are proposing a $6 Million Olympic museum.

Prior to the Olympics..they signed a deal with the public Sector unions with 17% increase over 5 years..to buy labour peace during the Olympics.

What is worse is we have disproportional amount of current or retired civil servants on Council which in my view has a very skewed view of reality. Ours was 5 out of 9.

The warning sign IMHO is the average age of Council and Staff…if they are at or near retirement…they can bail at any time and leave one hell of a mess for the next bunch.

The Golden Gooise is DEAD..

#123 GTA Engineer on 11.12.12 at 1:28 pm

#112 Linda Pearson on 11.12.12 at 12:16 pm
I understand the system quite well. Rising assessments are the foundation upon which municipal politicians inevitably build higher revenues. It will come. Return here in 2016 and show me taxes have been orthogonalogically transfixed. — Garth
*****************************
orthogonalogically – okay, that’s not even in the dictionary. What’s it mean?

A secret between us engineers. — Garth

——————

Lol – I didn’t want to be the jerk grammar nazi, but it’s actually ‘orthogonally’. Some related ways to put it: ‘mutually exclusive’ or ‘decoupled’.

The wiki definition: “Orthogonality is a system design property which guarantees that modifying the technical effect produced by a component of a system neither creates nor propagates side effects to other components of the system.”

#124 GTA Engineer on 11.12.12 at 1:35 pm

#116 PeterfromCalgary on 11.12.12 at 12:34 pm
In Calgary we have something called revenue neutral assessments.
.
.
.
It is not a perfect system but it seems better then Toronto’s.

—————-

Peter – you should read some of the comments. Toronto’s system is the same as yours.. We’ve been busy pointing out to Garth that he didn’t make it clear ;)

#125 Sell in Canada, buy in the US on 11.12.12 at 1:41 pm

@ #61Tony on 11.12.12 at 12:31 am

Wow, I think you’re well on the way to poverty. You have to take calculated risks bud and buy value when it presents itself. It won’t last. Right now residential housing in the US is available at value pricing. I can buy a new (~ 2006) house in the States for less than a Harley! Housing in the States is the cheapest it’s been in 40 years! Housing in Canada, although dropping is the most expensive it’s been ever! Where should I put my money, the US or Canada? In case you missed it that’s a rhetorical question! Just so I’m clear it’s the US! Warren Buffett, one of the smartest investors in the world, and huge REITs are now investing in US real estate. They are buying everything they can get their hands on. I think I’ll follow the lead of people who know how to make money, you should too!

http://business.financialpost.com/2012/11/10/no-better-time-to-buy-reits-now-invest-in-foreclosed-u-s-homes/

#126 IvanDrago on 11.12.12 at 1:45 pm

#11 I was thinking the same thing. Roof problems? Lol

#127 Snowboid on 11.12.12 at 1:59 pm

#114 broadway skytrain on 11.12.12 at 12:22 pm…

Point taken…

…but there is nothing illogical or ignorant about questioning the myth of how easy a profession is, using age-old stereotypes, without first-hand knowledge.

#128 Just Park It on 11.12.12 at 2:00 pm

With the ever increasing costs – this should put a fire under people’s pants and get the mortgage paid off – or better yet – buy what will take you a maximum of 10-12 years to pay off without starving.

We took a 25 year term – and will get it done in 12. How, first we bought that was below the 3X income rule.
I really don’t know how people are able to hold a 40yr term – and property taxes going up to the wazoo

#129 Daisy Mae on 11.12.12 at 2:16 pm

“One more reason BC is a fiscal swamp.”

*****************

But…but…but, the BC government tells us every day that we’re ‘leading the way in Canada’ and that employment is UP…and everything is just WUNDERFUL…so, how can this be?!

#130 Daisy Mae on 11.12.12 at 2:20 pm

By the way, I know ‘wonderful’ is spelled wrong. Did it on purpose…just being sarcastic.

#131 Bottoms_Up on 11.12.12 at 2:47 pm

They live in a home they can’t afford to buy at today’s price. That says it all.

#132 Old Man on 11.12.12 at 2:55 pm

#119 Brad In Calgary – with spot sweet crude oil now at $85.84; the so-called oil sands is toast, as takes an expense of about $30.00 a barrel for that heavy oil to show its ugly head to be refined in USA for a further discount of about $20.00 a barrel – do the math. Now there is further bad news, as Japan is going down the tubes bigtime. I say any Real Estate in Alberta is in trouble, and might be headed for a crash. Please tell me am wrong.

#133 Bottoms_Up on 11.12.12 at 2:57 pm

#85 Devore on 11.12.12 at 8:26 am
—————————————-
Owner occupied property tax discount? What cities offer that? Not in Ottawa that’s for sure.

#134 Victor V on 11.12.12 at 3:01 pm

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/avoid-nightmare-on-retirement-street-pay-off-your-mortgage/article5186342/

The chilling truth is that there are just over 9.3 million Canadians age 55 and over and 43 per cent of them say they haven’t saved enough for retirement. But by 55, time is running out. A Statistics Canada study in 2009 found that people in their 70s spend only five per cent less than they did in their 40s. It takes years of saving to replace that kind of income and dispose of a mortgage.

By now, you’ve probably sensed that being pro-active is key. But many people haven’t been. As many as one in three say they plan to live off the equity in their homes. That’s a gamble in any real estate market. But if you’re retiring in the next decade and relying on uncertain home price appreciation, it’s especially risky. You need diversified savings and you need that mortgage out of the way.

#135 Linda Pearson on 11.12.12 at 3:21 pm

#123GTA Engineer on 11.12.12 at 1:28 pm
#112 Linda Pearson on 11.12.12 at 12:16 pm
I understand the system quite well. Rising assessments are the foundation upon which municipal politicians inevitably build higher revenues. It will come. Return here in 2016 and show me taxes have been orthogonalogically transfixed. — Garth
*****************************
Lol – I didn’t want to be the jerk grammar nazi, but it’s actually ‘orthogonally’. Some related ways to put it: ‘mutually exclusive’ or ‘decoupled’.

The wiki definition: “Orthogonality is a system design property which guarantees that modifying the technical effect produced by a component of a system neither creates nor propagates side effects to other components of the system.”
*********************************
Thanks for that. I was tempted to ask G what kind of engineering – social or medical but leaning toward the medical, though perhaps misspelled.

Funny enough, in googling all round the term, I ended up at a Nasa site where the word was spelled the same way as Garth spelled it. And no, I can’t duplicate here and now how they defined it; communication with lesser mortals such as myself is not their forte.

#136 Tony on 11.12.12 at 3:24 pm

Re: #125 Sell in Canada, buy in the US on 11.12.12 at 1:41 pm

You make me laugh, we’ve been hearing the same thing since mid 2007 and you see a few fabricated up months in U.S. housing right before the U.S. election. You’re the one who doesn’t get it but in the coming months as housing falls in America you’ll remember Tony was one of the very few who got things right.

#137 broadway skytrain on 11.12.12 at 3:25 pm

#127 Snowboid on 11.12.12 at 1:59 pm
#114 broadway skytrain on 11.12.12 at 12:22 pm…
there is nothing illogical or ignorant about questioning the myth of how easy a profession is, using age-old stereotypes, without first-hand knowledge.
———————————
ignorant was the wrong word, i apologize. i was still mad about my bldg inspector problem, and i misdirected some anger, again, my bad.

however …. reading this again, i will call out ppl when i sense they are restricting free speech “you can’t comment on…” . …oh yes you can!!!

and nobody said a’coppin is an easy job. it’s not. but it’s also not worth 2-3x other comparable, equally taxing, private sector jobs which require similar skill levels (you don’t need to be a big smoke financial advisor to be a cop!)

also , maybe this is a generalization and/or maybe the problem is hdtv, but when the rcmp marched in ottawa war ceremonies yesterday what really caught my eye was the jiggling cheeks and jowls of excess fat on the faces of about 80% of the ‘troop’. how much do we pay our much fitter soldiers who do a much tougher job – oh ya, non union so about 1/2 as much over a career.

#138 Canuck Abroad on 11.12.12 at 3:26 pm

#97 TimV – “…That said, $180k/year isn’t enough for a $1.5m house. Perhaps that’s the real problem…”

Bingo. That’s it exactly.

#139 FTP - First Time Poster on 11.12.12 at 3:29 pm

It’s official – some realtor with a Gr 10 education said that Calgary and Edmonton are the two strongest RE markets in Canada!

http://www.edmontonjournal.com/business/real-estate/Calgary+real+estate+investment+market+Canada/7535200/story.html

#140 Canuck Abroad on 11.12.12 at 3:35 pm

Garth, this same thing happened in Whistler when it had its big run-up in prices several years ago. Long time residents were selling up and leaving because property taxes became too expensive. After prices crashed there, homeowners appealed to the municipality to have there taxes reduced and most were successful.

#141 Tony on 11.12.12 at 3:46 pm

Re: #119 Brad in Calgary on 11.12.12 at 12:55 pm

Calgary will get pulverized as both the U.S. and Canada will be either in recession or depression next year. That really bodes well for oil as it’ll probably make a new low below the U.S. $34.50 area.

#142 IM in C on 11.12.12 at 3:48 pm

@120 Iconoclast
The ideal tax, of course, is the one that *you* don’t have to pay.
Could not have said it better myself !!

#143 Canadian Watchdog on 11.12.12 at 3:57 pm

Which Canadian cities and towns had the highest mortgage loan-to-income ratios for pre-approvals? CanEquity Data

#144 anotherwhistleblower on 11.12.12 at 4:13 pm

I believe that the vermin in government have studiously created the two family income structure and the national debt to income burden specifically to keep people, as Joanie states, too busy to protest.

My conclusion, some years in the making, is that the ‘complacency factor’ in Canadian society has developed out of excessive financial overburden initiated by the governments continued cost of living increases on the citizen. People don’t have time to think…let alone protest. This is not by accident…this is policy driven social engineering by the left who have been in a class war mode for close to four decades.

When people are desperate, they are dependant on the government for everything from hospital , to day care, to life support in their personal financial matters. Has anyone thought of why government is so adamant to control every aspect of the citizens life…..and if you have you must ask the logical follow up…..what are they doing with the power? When people can no longer to have children the governemt gets to play with all sorts of liberal policies…

In all fairness to the liberals of Canada…a great many of these initiatives are and have been genrated out of Euro-centric leftist think tanks. One glaring example to effect Canada was the Trudeau era signing on to gut the industrial economy of Ontario and Quebec in order to fund sustainable development in the third world…..that was a Norwegian initiative through their UN partners. The policy wonks did not foresee how wrong that would go……and even though they now admit that their position papers on immigration, industrialization and sustaining development in uncontrollable areas such as Africa ( that all degenerated into mass corruption and theft of aid dollars) ….the Canadian left turned out to be patsies in this.

What we are left with is the institutionalized corruption of the civil service that we read about every day and that Garth refers to in the insidious inflation of service costs in this country……policy is so entrenched that costs have spiraled out of control resulting in a loss of quality of life for the masses.

People here can’t afford to have children….the left naturally solved this problem by importing babies from abroad….nothing said about lowering costs for Canadians. People like Joanie have hit the wall at the same time as every other Canadian worker.

Look at the future

http://news.nationalpost.com/2012/11/12/amid-crumbling-economy-racist-attacks-in-greece-on-the-rise/

In Greece and Europe generally the policies of government have failed and are degenerating into chaos. This is what we have to look forward to if Garths simple math projections on cost continue to collapse inward on Canadians.

Why even question why your cost are going up when you’re so complacent about every civil servant making hundreds of thousands of dollars per year on average? Of course it’s a pyramid scheme….playeed out by a cycnical left who cares little about the future…only about how much they can loot the country for now so that they get out with a bundle before it all collapses in a heap…..as it has in Greece……and citizens are forced to fight each other for scraps just to survive.

#145 Daisy Mae on 11.12.12 at 4:20 pm

#98 Uwinsome: “I think you are. If you have a bigger House, you potentially can house more people, create more garbage and most importantly (with that extra toilet) make some additional fertilizer that has to be treated. If you play – you should pay.”

****************

Would it also have something to do with ‘ability to pay’?

#146 Herb on 11.12.12 at 4:28 pm

Outstanding post, Garth, but here are a few additional points on property taxation.

MPAC is not the enemy. City Hall is. MPAC, or any assessment agency, merely assesses and reports the current value of individual properties. It does not determine the taxes levied as a result. City Hall does. MPAC can afford to be objective and use the best information and methodology available since it has no skin in the game. An arm’s length provincial crown corporation, it is funded by municipalities – and could be controlled by them. Municipalities don’t want to admit that they have any control over MPAC, but they do appoint the majority of the directors on the MPAC Board.

City Hall determines the “demand” side of the property tax equation. It wraps the various operational and capital requirements into an annual budget that then has to be met by taxation, fees and charges, the “supply” side of the equation. It is the demand side that has to be controlled to keep supply requirements down. City Hall (Council and Staff) must should massage “must do’s”, “should do’s” and “could do’s” to keep budget pressures down. And this is where councils come unstuck: saying “no” is hard for politician who want to be re-elected and need goodwill – and campaign contributions. So budgets become balls of wax, with genuine requirements wrapped up with pet projects and favours owed, leading to rising costs needing greater property tax revenues.

Forget MPAC – it is only the mechanism and scapegoat for higher taxes. Check your assessment – fight it if you have grounds. You paying too much in your estimation is not grounds; those would be factual errors, property condition, and closer comparables. Above all, pay attention to what is happening at City Hall. You may not know what is happening nationally or internationally, but you certainly can find out in your municipality. Practice real democracy: motions, minutes and supporting papers are available on the internet; demand facts, reject soft soap, speak your mind, and vote! The worst part is that municipal politics stays below the horizon until tax bills are received, at which point it will be too late for this year, and things will blow over for the next.

#147 IM in C on 11.12.12 at 4:55 pm

WRT taxes : You get what you pay for:
Case and point:

Back in 1950 my aunt graduated from Grade 11 , then went to teachers college for a year. She got her first teaching job in a 2 room school house. However, the province had passed a regulation saying that 2 or more teachers, a school had to have a principal. Since the other girl was 18 and had taught there a year the board offered the job to her. Will I get paid extra asked the older girl . No was the reply. Then I am not interested said the older girl!. At that point my aunt chimed in and said she would be the principal.
And that is how my 17 year old aunt, without a days teaching experience, became a school principal.

You want the quality of services we have today, and I submit the vast majority of the readers of this blog do, then you will have to pay for them with higher and higher taxes.

#148 Hoof Hearted on 11.12.12 at 4:57 pm

Reading local BC blogs…I think it is fair to say prices have dropped 30%.

2013 Assessments are out in about 6 weeks.

I can already smell the piss and vinegar..people complaining about lost value(aka where did my $300,000 go) and the icing on the cake is the City Mill rate adjustments to achieve the same revenue….City of Richmond policy is 3% minimum increases……

#149 Old Man on 11.12.12 at 5:07 pm

I remember the day during the 1970’s that Calgary was booming, and gals rushed out of Toronto to take jobs in a bidding war, and yes some of them were making big money, as it was all about supply and demand, and both man and woman rushed for the pot of gold like a herd of cattle. Well, that too came to an end as with a boom came the bust, and they all came back home. Alberta is a one horse town, and no stable economy can be based on one horse, as the winds of change can happen; nor a future with employment, so will history repeat itself?

#150 Canadian Watchdog on 11.12.12 at 5:32 pm

Almost near 0% mortgage rates. U.S. housing recovery success!

30-Year Fixed Rate Mortgage Average
15-Year Fixed Rate Mortgage Average
5/1-Year Adjustable Rate Mortgage Average
1-Year Adjustable Rate Mortgage Average

This can now only end in a complete catastrophe. Guaranteed.

#151 Steven Rowlandson on 11.12.12 at 5:33 pm

There are times that I find myself being glad I am a renter even if the space is limited.

#152 Old Man on 11.12.12 at 5:41 pm

The other thing that really gets my blood boiling is the cost at the gas pump, as we are all being hooped, and those in government will rationalize that it is because this and that – all bullshit. But on the other hand, this becomes being taxed at the pump for the benefit of all to pay for services that we all need. I will accept this to be taken for a few dollars, as it bothers me not; such is life. Just another form of taxation, so once again will throw in $10.00, as do all of an average cost basis to beat the system.

#153 broadway skytrain vectorhead on 11.12.12 at 5:48 pm

easy peasy – the closest thing to garths shiny new word

Orthogonal Vectors
Two vectors and whose dot product is u . v=0 (i.e., the vectors are perpendicular) are said to be orthogonal. In three-space, three vectors can be mutually perpendicular.

artist version – point your finger and thumb like a gun, look at you finger and thumb. presto, orthagonal.

#154 Questioning Calgary stats on 11.12.12 at 6:08 pm

#119 Brad in Calgary

Garth said that Calgary’s housing market is not yet at the point where Vancouver and Toronto are in terms of correcting, but getting closer.

Garth’s 2008 prediction about a housing market correction/crash in Calgary and the rest of Canada was correct. In 2008-2009 Calgary house prices dropped about 20%.

He was unable to predict the extreme, dramatic, unprecedented, emergency intervention that suddenly stopped the crash. To summarize it, in 2009 CMHC had a total of $300 B on its books and now that total is almost $600 B, three short years later. Nobody predicted that intervention, Brad, not even Bob the realtor.

How did Calgary house prices double since about 2000? It was excess credit that caused this (false) housing boom.

Now that credit has been tightened significantly, prices will fall significantly across Canada, including Calgary. Once prices start to fall, Brad, don’t expect there to be the same intervention as in 2009. This time it will be different.

#155 Ronaldo on 11.12.12 at 6:13 pm

http://flipyourclassroom.einstruction.com/performances/1bwd49czdv?back_url=http%3A%2F%2Fflipyourclassroom.einstruction.com%2F%2355

Pay attention teachers.

#156 jess on 11.12.12 at 6:23 pm

Deferred prosecution ?

Friday, November 9, 2012
Moneygram International Inc. Admits Anti-Money Laundering and Wire Fraud Violations, Forfeits $100 Million in Deferred Prosecution
Also Agrees to Enhanced Compliance Obligations and Structural Changes in Connection with Five-Year Agreement

…MoneyGram’s BSA failures spanned five years, and resulted, among other things, from the failure of its fraud and AML compliance functions to share information and from its regularly resolving disagreements between its sales and fraud departments in the sales department’s favor. One notable such disagreement occurred in April 2007, when, at a meeting attended by senior MoneyGram executives, the fraud department recommended that 32 specific Canadian agents that were characterized as “the worst of the worst” in terms of fraud be immediately closed. The sales department disagreed with the fraud department’s recommendation, and these outlets were not closed; instead, MoneyGram continued to process transactions from the 32 outlets despite continued complaints of fraud.

http://www.justice.gov/opa/pr/2012/November/12-crm-1336.html

#157 live within your means on 11.12.12 at 6:30 pm

#98 Uwinsome on 11.12.12 at 10:48 am
# 81 For Sale Said: “My neighbor and I get exactly the same services; garbage pick up, school bus etc., but he pays more property tax. It shouldn’t matter if his house is bigger or that he has an extra toilet.
Point is, local property taxes are supposed to reflect local services, so, since we all get the same services, every property should pay exactly the same tax amount in their tax rate area.
Am I wrong?”

I think you are. If you have a bigger House, you potentially can house more people, create more garbage and most importantly (with that extra toilet) make some additional fertilizer that has to be treated. If you play – you should pay.
……………..

#IIRC, where PIL’s live in France, taxes are based on size of house & lot and mostly the # of people that live in the house. Sounds reasonable to me.

On the street where I live (older end) lot size doesn’t seem to matter. We’ve had an online system since 2001 where anyone can view all property assessments.
A neighbour has a double lot yet it does not affect his assessment. Our lot is 70 X 190′.

Between 2010 & 2011 our assessment increased just a bit over 20K but our taxes only increased by $27. (Never had a tax assessor visit our home.) For 2012 our assessment increased only $2500. but our bill decreased by 2 cents – LOL. We live in Dartmouth (house built in 1984) in a nice area & did some major renos inside & out in 2010. This summer DH removed all the original carpeting in the b’rooms, laid down plywood & with a knowledgeable friend, put in hardwood flooring – thankfully I was away some of the time.

BTW, our home is 2250 sq ft. (incl. my DH’s workshop – instead of a garage) & is only assessed at $253,300. Highest on our end of the street is $324K Newer end is quite a bit higher, with mostly smaller lots & huge garages.

Pardon my long post.

Tho we have no children, I certainly don’t mind paying school taxes.

#158 Ken R on 11.12.12 at 6:45 pm

#101Stickler on 11.12.12 at 10:57 am

Solution: 15% cut to ALL government workers compensation, phased in over 3 years. From the PM to the police & teachers. ALL.

Not enough; the biggest single controllable expense is labour. About 1 in 5 government employees in Ontario needs to be fired. Everyone wants a painless solution to the problem and there isn’t one.

#159 anotherwhistleblower on 11.12.12 at 6:52 pm

DELETED.

You were warned. Now you are silent. — Garth

#160 broadway skytrain vectorhead on 11.12.12 at 6:57 pm

#101Stickler on 11.12.12 at 10:57 am

Solution: 15% cut to ALL government workers compensation, phased in over 3 years. From the PM to the police & teachers. ALL.

Not enough; the biggest single controllable expense is labour. About 1 in 5 government employees in Ontario needs to be fired. Everyone wants a painless solution to the problem and there isn’t one.

—————————————-
YES
just change ON to canada

#161 OnlyTheBankersLaugh on 11.12.12 at 7:03 pm

Garth, What is your prognosis for long term of health care here with the boomer onslaught? While I believe that housing will be impacted positively in terms of the young being able to afford something in 10 years to contribute more to our consumer spend, the proportion of wage earners will continue to fall and taxation will have to increase to meet deficit targets. Still, health care costs will be phenomenal and what was the plan in Ottawa back in your day or was it not discussed?

We decided on Boomer internment camps and ice floes. — Garth

#162 live within your means on 11.12.12 at 7:08 pm

Further to my last post. We paid for all our renos w/cash. Sure, we could have taken out a HELOC on our long paid off home, but we took out an investment loan years ago with a Manulife Advisor ? & saw our investments erode. We didn’t get out of the market but I finally convinced Garth to take us on as clients. Thanks Garth.

BTW, the other day DH saw a garage sale in our area so stopped by. He asked her if they were moving. Yep, finally joining her DH in Alberta after 2 yrs but hopes to move back. They got to talking (what’s new w/my DH papillon social). She’s FA. DH said he had a good one and she asked who. Turns out she follows Garth’s recommendations to her clients, but it’s up to her clients to choose with what bank/brokerage firm, etc. they go with. So Kudos to you Garth.

#163 Stickler on 11.12.12 at 7:16 pm

@Some doomer previous post…

Oil @ $35 HA! You wish. That is unsubstantiated doomer talk.

Oil (WTI) has been under $50/bbl for a total of 5 months going back to May 2005….that is 7 and a half years.

…but now it is going to “crash” to $35 and stay there for a sustained amount of time.

That is the problem with doomers…they are smart enough to partially inform themselves of the issues…but too lazy to fully investigate.

They find it easier to parrot what they read on select web sites that assume tell them the whole story.

I am no Calgary lover…but there are tons of projects planned by Alberta based companies. That is the place to be in Canada right now if you are a young working douche bag.

#164 Smoking Man on 11.12.12 at 7:28 pm

#159 anotherwhistleblower on 11.12.12 at 6:52 pm
DELETED.

You were warned. Now you are silent. — Garth
…………………………………………………………………

LMAO

Gartho you should do a book of all the out takes and deletes. I would go as high as 100 bucks to buy a copy.

#165 Stickler on 11.12.12 at 7:30 pm

@ #160 broadway skytrain vectorhead on 11.12.12 at 6:57 pm
@ #160 broadway skytrain vectorhead on 11.12.12 at 6:57 pm

#101Stickler on 11.12.12 at 10:57 am

Solution: 15% cut to ALL government workers compensation, phased in over 3 years. From the PM to the police & teachers. ALL.

Not enough; the biggest single controllable expense is labour. About 1 in 5 government employees in Ontario needs to be fired. Everyone wants a painless solution to the problem and there isn’t one.

—————————————-
YES
just change ON to canada

———————-
>> Firing 1 in 5 reduces labor cost by 20%, so its the same result but you get more unemployed people which costs more money & also reduces consumer spending by those people…which is a drag on the economy.

While we both agree our government is way to expensive I would rather keep people employed and lower their compensation…because that is the trend we are facing. A lower standard of living for us rich developed countries.

#166 broadway skytrain on 11.12.12 at 7:45 pm

I am no Calgary lover…but there are tons of projects planned by Alberta based companies. That is the place to be in Canada
——————————————–
bingo….

going better than gangbusters – any vancouver engineering house capable of oil work has felt the spillover. in the last few years body counts have already doubled and the help wanted list is very long
salaries reflect the market conditions – this , remember is in BC, we have no oilsands here but there is 3X the work in AB than albertans can do right now.

#167 Ronaldo on 11.12.12 at 7:58 pm

#136 Tony –

”………….you’ll remember Tony was one of the very few who got things right.”

You are quite the comedian Tony.

#168 Smoking Man on 11.12.12 at 8:10 pm

Today we celebrated Remembrance day,

I was at the nursing home to see mom and dad, dad needed a haircut so got the buzzer out and made him a 95 year old handsome devil again .

Down stairs they had a shrine, with all the current vets in the home. My dad’s name was absent from the list, he has no medals, or awards or acknowledgment of his contribution.

He was a freedom fighter in the Serbian hills defending his home land, taking out and ambushing Nazi tanks and battalions. He and his buddies took out a lot of attaching solders, our family and his old friends told me he was brilliant.
He was captured and Spent 2 years in several concentration/labour camps making his way to Canada after his 3rd escape.

Who knows what the hell he went through in the camps, he don’t remember but he was not the same man that left the family farm. When he was reunited with them in 86, they cried, did not know him to be brother that left.

I grew up with a loving dad, but no guidance. Not a bad thing either.

Today we had some vandal’s spray paint some crap on a vet memorial and a kid in London was arrested for burning a poppy. Outrageous yes, slap em in the face sure, but a crime, no.

The Irony, the very thing our guys gave up their lives for. Freedom, freedom of expression is slowly being taken away from us.

We now have hate crimes, output an expression that is overly offensive to religion and religious groups, or any other special interest group you’re going down on serious charges. Disgusting are dads and grand fathers fought for that?

So to all the soldiers who made it back or didn’t in ww1 or ww2

I humbly honour you.

To the dead and injured in our volunteer mercenary empire building wars I respect you. And will wear a poppies for all

#169 Raymano on 11.12.12 at 8:11 pm

Garth, in many European countries they have generational mortgages amortized over 100 years. Are they nuts!

Europe will never amount to anything compared to, say, Calgary. — Garth

#170 Kaganovich on 11.12.12 at 8:15 pm

#162 Stickler

You may be right…we will all find out in due time. But, your sample is quite short to be extrapolating with:

http://bespokeinvest.typepad.com/bespoke/2008/05/oil-price-chart.html

Michael Pettis (http://www.mpettis.com/) lays out some pretty cogent arguments for the case against rising or even plateauing commodity prices.

http://globaleconomicanalysis.blogspot.ca/2012/09/by-2015-hard-commodity-prices-will.html

I find it hard to understand how an energy extracting company’s future plans has any has any influence on oil prices. The latter does have a marked effect on their plans however. I try to keep my mind open, so for the myriad of china-bull sites and sources of interpretations, I also try to find out what things like the GSCI may have to do with commodity prices as well. Chris Cook draws attention to the the connection between oil prices and financial speculation, and the inherent instability of prices when speculative buying and selling ramps up.

#171 Al Gore and David Suziki on 11.12.12 at 8:17 pm

We decided on Boomer internment camps and ice floes. — Garth

===================================

Hey you are screwing up our Freedom 55 pension plans.

#172 T.O. Bubble Boy on 11.12.12 at 8:19 pm

Garth – have you ever met Elizabeth Warren? Don’t take this the wrong way, but you seem to have a fair amount in common:

– Focus on personal finance
– “outsider” in politics
– Integrity and ethics
– Avid blogger
– Similar views on the screwed middle class

http://www.cnbc.com/id/49749076

#173 Paul on 11.12.12 at 8:26 pm

#62

I wouldn’t be so sure about that. Take a look at the drillers. This from the one I own.

Third quarter revenue from continuing operations of $51.1 million, an 18% decrease compared to $62.7 million for the same period in 2011;
 Third quarter EBITDA(1) from continuing operations of $12.0 million, a 31% decrease, compared to $17.5 million for the same period in 2011;

The drillers have slowed and are forecasting the same in 2013. If the demand is down so are prices.

#174 Old Man on 11.12.12 at 8:27 pm

All is not lost in life, so be not depressed with doom and gloom about Real Estate, Investments, or whatever, even though it appears all is lost and the world is going to come to an end. The trick to it all is holding a hand of aces which means a good balanced portfolio to weather the storm. I had a class at University with about 200, and was the only one that held an A, so took a chance, and called my professor before the final exam; told her did not want to write it, as had other stuff to do. She laughed her head off, and said all cool with me, but must talk to the Department Head for an exemption.

She called me at home, and said all done. No matter what comes your way in life, if you hold aces use them, and for you that have equity in your residence in any major city do your homework, to determine a hold or sell, as the deflationary crash is coming. Equity is an ace, so do you hold or sell? Now if you hold will take a capital hit in some areas in Canada, and it will not bounce back for a decade or more.

#175 Inglorious Investor on 11.12.12 at 8:40 pm

#162 Stickler on 11.12.12 at 7:16 pm

FYI oil was around $10 as recently as 1999 (what would that be in 2012 dollars?). No doom required. And oil never stays at any price for very long; volatile.

And don’t look now if you are headed to Alberta in search of riches, but the IEA just announced the US is on its way to becoming the world’s largest producer of petroleum.

Already worry is beginning to set in as to whom Canada is going to sell its tar once things really get rolling down south.

I predicted that oil would get relatively cheap thanks to huge reserves in Alaska’s North Shore, off-shore, Gulf, Bakken, shale oil, etc, and the US economy would be picking up thanks to cheap real estate and cheap labour, while Canada, mired in consumer debt, expensive RE, and spoiled civil servants, experiences a slowdown.

#176 Nostradamus Le Mad Vlad on 11.12.12 at 8:43 pm

-
This mainly applies to Americans but I wonder how much our Canadian counterparts are receiving?

Just a reminder . . .

Red Kettles & Bell Ringers

As you open your pocketbooks for the next natural disaster, or the Christmas season, please keep these facts in mind:

The American Red Cross President and CEO Marsha J. Evans’ salary for the 2011 was $951,957 plus expenses.

The United Way President Brian Gallagher receives a $675,000 base salary along with numerous expense benefits.

UNICEF CEO Caryl M. Stern receives $1,900,000 per year (158K) per month, plus all expenses including a ROLLS ROYCE.
Less than 5 cents (4.4 cents) per donated dollar goes to the cause.

Meanwhile . . .

The Salvation Army’s Commissioner Todd Bassett receives a salary of only $13,000 per year (plus housing) for managing this $2 billion dollar organization. 96 percent of donated dollars go to the cause.

The American Legion National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

The Veterans of Foreign Wars National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

The Disabled American Veterans National Commander receives a$0.00 zero salary. Your donations go to help Veterans and their families and youth!

The Military Order of Purple Hearts National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

The Vietnam Veterans Association National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

No further comment is necessary.
*
2:49 clip James Turk on central banks gold heist. Does this have anything to do with China’s new-fangled gold-backed currency, or this? Out-rrr-rageous “2. The IMF is an Agency of the UN. (Blacks Law Dictionary 6th Ed. Pg. 816)”; The Fiscal Cliff is a molehill compared to this; High School Dropouts – Become politicos! Can’t do any worse than the present bunch of whackjobs; Good economic news at last; Kroger So much for ObombaCare; Ohio must be in bad shape if they’re cutting some food stamps; Auctioning off body parts to pay the rent.
*
How bad is GM food? Plus 9:56 clip Monsanto and others spent millions defeating Prop. 37; Politics “The battle is between states’ rights and imperial rule.” King Obomba? The Invisibility Cloak appears to be reality; First Texas, others incl. Vermont and NH, now it’s Iowa, and Secession Here are the 20 states; Poor Execution “By cheating against Ron Paul, Mitt Romney won the nomination, but lost the election.”; Heavens to Betsy! See headline.

#177 Macrath on 11.12.12 at 8:43 pm

We decided on Boomer internment camps and ice floes. — Garth

Elliot Lake ? One way in, a collapsed mall and no way out ! Clever marketing.

#178 AACI Home-Dog on 11.12.12 at 8:46 pm

#162…stickler,

bang on. nobody needs to wish problems like that upon us all. we will all benefit by a sustained & sustainable economy in alberta.
cheers…

#179 Smoking Man on 11.12.12 at 8:53 pm

Nice Post great Vlad

That’s why I never give to organized beggars.

Put up a tribute to my dad, ww2 you know where the blogs is

#180 TurnerNation on 11.12.12 at 9:19 pm

Another Toronto fact: parking enforcement officers can and do pull in 100k/yr. Including via overtime.

I work with a guy who has family members in the service (it falls under the police’s umbrella). Of course, full union benefits.

They are outside in all weathers, more prone to assaults daily, but realistically it should not pay more than 40-50k. May be a good job for retirees.

#181 Humpty Dumpty on 11.12.12 at 9:34 pm

There’s always more than one A hole on the block who’s milking the working class…

Money is just information, a way we measure what we trade, nothing of value in itself. And we can make it ourselves, to work as a complement to conventional money. It’s just a matter of design.”

Documentary For Monetary Reform
http://www.youtube.com/watch?v=TwmM5Nb6hiE&feature=player_embedded

#182 Linda Mulligan on 11.12.12 at 9:37 pm

Everyone hates paying taxes, but everyone wants the services that are paid for by taxes. I’m not fond of my tax bill increasing myself but – the roads I drive on are drivable, the streetlights usually work, the water runs hot & cold as needed, the sewage is treated & so on where I live. Oh yes, garbage is picked up too & the roads are both swept & plowed depending on season. In many other countries, you pay taxes, bribes, protection money etc. & have – no health care, no drivable roads, no safe drinking water, no sewage treatment, no garbage pickup etc, etc. – but you still pay & usually more than once. Blame unionized workers for costs going up if you want, but don’t think for a second costs would go down if there were no unions people – all that would happen if you privatized a service is that you’d get the lowest cost alternative done & help get some ‘entrepreneur’ very rich while not getting the service or the kind of infrastructure that lasts a day past the warrantee period. Lots of cities have tried the private route only to regret it – surprise, surprise that sweet cheap deal you got from the private company only lasts until the contract comes up for renewal, then watch the price that is bid reflect what they intend to charge for future work. Bye bye cost savings & hello, loot & pillage!

#183 Smoking Man on 11.12.12 at 10:02 pm

#182 Linda Mulligan on 11.12.12 at 9:37 pm
Bye bye cost savings & hello, loot & pillage!

So What are you doing to get in one the action? you aint going to change the machine.

#184 Snowboid on 11.12.12 at 10:55 pm

#137 broadway skytrain on 11.12.12 at 3:25 pm…

No problems restricting free speech, but I will call anyone that I believe is spreading misinformation.

Like suggesting the RCMP are union (they aren’t) and that’s why they appear overweight.

I believe the RCMP salary is set by picking the median of the pay scales of city and provincial forces across Canada – and that is the RCMP wage.

#185 Herb on 11.12.12 at 11:20 pm

More on property taxes –

Revenue Neutrality. It is supposedly guaranteed by law that higher assessments should not result in higher tax revenue. Makes sense, but how is this revenue neutrality achieved?

If house values in a real estate market increase, they should affect the assessments of all houses, obviously some more than others. Theoretically, a municipality needs to raise “Z” budget dollars. MPAC reports the new current assessed value of each individual house (let’s call it “Xn-1”), as well as the sum of the value of all houses, “X”. The municipality now calculates what tax rate it must apply to the “X” total value of all houses to yield the required “Z” amount. Let’s call this tax rate “Y”. For each house, then, the property tax due would be its individual assessed value Xn-1 multiplied by Y. This should be revenue neutral: all houses would rise (or fall) on the same tide (or ebb) since the higher the X, the lower the Y to achieve the desired Z result.

But politicians have found another way to arrange revenue neutrality.

MPAC also advises each municipality that its assessments have increased (or decreased) by a stated average percentage, say 20%. It even reports average increases by wards and neighbourhoods. Some of these will be more desirable than others, and therefore appreciate more than others. Armed with this information, the municipality then takes the stated 20% average, subtracts it from the increase reported for each neighbourhood, and limits the increases in property tax to the resulting difference.

Say your house increased in value by 30% during the assessment period. The city deducts the city-wide 20% increase, and your tax will increase by only 10% to be applied or phased in as applicable.

If your house increased by the city-wide 20%, there will be no change in your property tax. But if your house increased in value by only 10%, the city will deduct the city-wide 20%, and now you face a 10% decrease in property taxes. You have won the property tax lottery for this year!

Now, there are areas in cities that appreciate more than the average every year, and there are other areas that do not. Theoretically, property taxes in less desirable areas could decline by 5% every year for 20 years, and after that the city would pay the happy homeowners an annual premium to live there. Do you see what is wrong with this picture?

Now why do you suppose that politicians would opt for this way of revenue neutrality? Because this approach only bothers the roughly half of home-owning voters whose property taxes go up each year. The other half at or below the municipal average dodges the tax bullet and is not angry at local or provincial politicians. Not a bad compromise, is it? Especially since only about a quarter vote in local elections anyway.

So what are you going to do about it?

Renters and Property Tax Renters on this site have expressed satisfaction that only landlords pay property taxes. Helloooo! Ask your landlord how much his property taxes are, and you will discover that about 20% of the rent you pay to him goes to pay his property taxes. Think about it: 20% of your rent is property tax! As a renter, you do have skin in this game, so get interested.

#186 broadway skytrain on 11.12.12 at 11:23 pm

No problems restricting free speech, but I will call anyone that I believe is spreading misinformation.
——————————-good on you , do it with facts not a PC muzzle

Like suggesting the RCMP are union (they aren’t) and that’s why they appear overweight.
——————————- they are overweight for exactly one reason – because they eat more calories than they burn – this is not union related, but is an indication of the donuts to exercise ratio in their daily lives

I believe the RCMP salary is set by picking the median of the pay scales of city and provincial forces across Canada – and that is the RCMP wage.
—————————————— so not union, ok, but based on an average of other 100% union, overpaid rates?!? a special case dont ‘ya think? military gets all the bodies it needs at about half of a cop rate. for a way worse job. ergo the market rate is not near the union rate.
wouly you rather be crusing chilliwack in an air conditioned crown vic looking for drunk kids, or roaming kandahar in 120degrees of hot dust, knowing IED’s most likely wait in your path?

#187 Snowboid on 11.12.12 at 11:50 pm

#186 broadway skytrain on 11.12.12 at 11:23 pm…

Starting salary RCMP – $ 48,946
Starting salary Army – $ 33,012

So more for the RCMP, but not double.

“…wouly you rather be crusing chilliwack in an air conditioned crown vic looking for drunk kids…”

Been there, done that. Closest to military was a short stint as a reservist in the KOCR (Calgary).

#188 OwlEyes on 11.13.12 at 12:12 am

@#75 Riding the Pine – You misunderstood me. I was talking about infrastructure costs/stress on urban landscape of SFHs over and above kickbacks to city officials. Of course corruption is another cost I shouldn’t have to subsidize.

#189 Bill Gable on 11.13.12 at 6:42 pm

Quebecor just nailed 500 jobs. Those will ripple out and kill and few hundred more.
Mr. Turner and the slow melt, can become an avalanche in seconds.

Zippo job growth and the admission by the Elef with the Green tie, that another YEAR will be added on to “paying off the debt”.

Sure, right. About as much chance of that, as Mr. Turner being invited to Christmas Dinner at 24 Sussex.

With apologies to the Amazons.