Entries from March 2017 ↓

What could go wrong?

Americans have a constitutional right to own property. Canadians? Meh. Not so much. You just have to hope for the best – that the province won’t expropriate for a road, the city won’t zone a group home next door, the conservation authority won’t prevent you from landscaping, or the mayor won’t decide you’re not home enough.

As real estate prices grow more insane in our bubble markets, politicians are hot to further abrogate private property rights – which you don’t actually have (and they know it). An empty condo, for example, that you plan to retire into next year. Or a property used for business part of the time. A secondary home in a city where you winter. Real estate you bought, paid for and shell out property taxes on. All that is now in the crosshairs in Vancouver, and may soon be in Toronto.

YVRers have been receiving these brochures in the mail – the latest news on an ugly little tax about to be slapped on thousands of unsuspecting property owners who have done nothing wrong. The tax is ginormous – 1% annually of assessed value, which is $14,700 on the average detached house, or $1,230 per month. This is on top of normal property tax of about $5,500.

The Empty House Tax, now in BC and soon in Toronto (says mayor John Tory, who used to be a conservative), doesn’t just spank foreign owners who snap up properties as long-term investments then leave them to the weeds and the mice. There actually aren’t many of those dudes. Instead, it’s intended to economically censure wealthy people as it’s now socially unacceptable to have two homes when some poor moister couple can’t afford any. There’s no evidence the EHT will increase housing stock, put more rentals on the market, or do diddly about the speculation that’s driven prices skyward. It’s just political. It’s something, when leaders have been accused of doing nothing.

How does this work?

Vancouver is the model for the Toronto tax now being crafted. A secondary family home – maybe a condo you bought for your daughter to attend school – which is not regularly occupied, or rented to a tenant for at least six months, will be taxed. To prove otherwise, an audit will require government-issued ID showing that address, or a tax return.

A secondary home, used periodically by the owner, or family members or guests which is not fully occupied for half the year, or rented out for an equal period, will be taxed. So, if you live in Toronto and spend the winter in Vancouver in a condo which is then largely vacant for seven or eight months, you pay. Even if you worked in Van for six months of the year and needed a pad – cheaper than taking a hotel – you pay the tax. Only exempt would be someone needing a place because they have a full-time job in that city.

If you own a condo which is on the rental market and you can’t find a decent tenant, after six months you will be taxed. “Therefore,” says the city, “owners are encouraged to reduce the asking rental cost until the unit is rented, as they will not be exempt from the tax on the basis of being unable to find a tenant.” Ditto for selling a property. If the housing market slows (as in YVR now) and you cannot find a buyer willing to pay your price – after 180 days, it will be taxed.

Is this fair? Just? Equitable? What purpose is served through the arbitrary imposition of an extra new levy on people, simply because they own property?

Beats me. But John Tory likes it. “I am open to exploring whether this would be the right measure for Toronto,” he told reporters this week, which is political code for lift-off. Of course, this is the same guy who wanted to make the main artery into the city from the burbs a toll road (shot down by the premier), so he’s desperate for revenue.

In fact, Toronto has already started the witch hunt. Officials have been instructed to study electricity and water usage data to ascertain the number of lightly-used properties in the city – wildly estimated to be about 65,000 (at least a third of which are newly-built condos). Tory has asked these bureaucrats for a report on the feasibility of a GTA vacancy tax.

Meanwhile, we’re four weeks away from the province imposing its own market-dousing agenda as politicians react to a 30% surge in average prices, caused largely by speculative fever and house-lusty hormones. The budget seems likely to bring a tax on speculation and flipping plus (maybe) a foreign buyer whack.

Just listen to what Treasurer Charles Sousa had to say a day or two ago: “There are individuals that are going into subdivisions that are buying 10, 40, 50 homes – holding paper – and flipping it … and they’re crowding out families who are trying to buy.”

Yeah, we know where that’s headed. Even if it’s true.

Have you listed yet?

My folly

It was a year ago that I last wrote about buying real estate. There it was. Pathetic. Lonely. Unloved. Old. Its bricks disintegrating, paint flaking, foundation sagging, with its dusty guts full of knob-&-tube, asbestos and dead bugs. But I bought this pile of misery because it’s a cool place. Potential. Then I told Dorothy. After all, it’s easier to ask forgiveness than it is permission.

Well, time for an update plus all the evidence you might need that I actually do like owning property, especially oddball places with history. It was built as a boozy hotel 130 years ago when men were men and quarried rocks for a living in the Credit River valley northwest of Toronto. Then it became a post office, a general store, biker hangout, restaurant and failed vegan salad bar before spending the last few years quietly disintegrating.

Largely original in its form, sitting on a big lot in a little hamlet with a creek running through the back and tourists flowing through the front, the structure cried out for some insane person to rescue it. So I did. Over the course of four months the dead, decaying bricks were pried out and replaced with ones made to match. The foundation was jacked. Stones inserted. Cement laid. The interior floors gutted, wired, plumbed, foamed and rebuilt. Upstairs the original residential quarters were renewed, downstairs a new retail space created.

Yes, it cost a fortune. Even more than this free blog pulls in each week. But the old lady had come cheap, and the work was creative with a sense of worth that doesn’t really come from turning your basement into a man cave with sex lights. Instead, there was a simple elegance to things built in the 19th Century which, almost a century and a half later, still speaks to people. This pile, I suspect, will be standing long after the $1 million houses being built down the road in Brampton – of particle board, glue and face brick – have been dozed.

So a year ago, my folly and new love, the Belfountain General Store and ice cream parlour, opened for business. I found myself on Saturday mornings cleaning the grounds, putting out the umbrellas, mowing and performing minimum-wage labour with profound pleasure. Of all the things I’ve done in this wizened, imperfect life, whether walking into the House of Commons or speaking to ten thousand people, sweeping a patio has become oddly relevant. Now I realize I’m house-proud, too, and it’s not even a damn house. Just an old place to hang out with people who come to hang out.

So there are 19 folks who have jobs in a little speck of a place in Caledon who did not work there before. I am proud of that as well. They bake muffins and croissants, craft bespoke sandwiches and soups, scoop boatloads of ice cream and make people laugh and stay. Largely they’re kids – high school or university, with a couple of older managers. Locals, too. Most walk to work. As people did in 1888. There might have been a horse of two involved, though.

It’s not all bucolic. The health inspector has made her mark, since the store draws its water from the river as it did in the distant past, and must be pure. Municipal politicians are always fussed about traffic and the number of visitors who want to flock here. The property is subject to the rules and regs of the Town, the Regional government, the Niagara Escarpment Commission and the local conservation authority. The time required to keep everyone at bay is epic. Serving meals to people means a great responsibility – coolers always at the right temperature, hand-washing stations pristine, ovens set correctly, food properly prepared and fresh.

To help with that, Lorna, the manager, last year established a veggie and herb garden outside the employee entrance, so the kids can nip out for a killer tomato or a sprig of something exotic. After the doors opened, people came. Getting started may have cost too much, but the business then paid for itself, met payroll, shelled out taxes and financed all that ice cream. It’s a safe bet I’ll never make a dollar of my money back, but neither will I care too much. It’s just too much fun sweeping.

So after being closed for a few winter months, the store opens again for the season on Saturday. Getting ready involved a mess more painting, redecorating, restocking with gourmet hand-made doggie treats, local preserves and unique gifty stuff. My assigned job that morning is to go and wire up the sagging cedar rails on the perimeter fence, put together the new sign announcing the enhanced seven-day-a-week operation, drag picnic tables around, and stay the hell out of the way.

It’ll be a good day.