Agony

Jeremy called today. He’s listing on Thursday for $1.8 million. The latest in a string of people in my circle who have decided to bail while the bailing’s good. “If I get it,” he asks, “then how in conscience could I possibly turn it down? That’s a half-million gain in eleven months.”

Indeed. He’s a genius. By our reckoning it would take him eleven years of current after-tax income to equal that amount, and more than twice that time to save it. This is a windfall. Like some demented TV or radio game show – take the prize now, or roll the dice and gamble it’ll be bigger after the next throw, or maybe disappear.

Word is one of the options being presented to the Ontario premier is a new capital gains tax on residential real estate for her upcoming budget. We already know universal rent controls are coming (she told us) which could have a devastating impact on condo sales and values since over 50% of buyers are speculators, investors and amateur landlords. The cap gains levy would be aimed at everyone else – a sliding scale of agony, based on how long someone actually owns a property.

If you want a preview, check out a column in the Globe this week by that little rascal Rhys Kesselman, of Simon Fraser U. It perfectly reflects the thinking of the lefties who now lead so many governments in this enlightened nation of ours.

  • All forms of income, including gains from every other asset that goes up in value are taxed (outside of registered plans like TFSAs). So why are houses exempted?
  • This distorts the economy, and diverts massive amounts of money into a single asset class, turns people into house-lusty automatons and creates real estate bubbles.
  • As prices rise, every buyer becomes a speculator, since they’re entering the market at ever-higher levels with escalating debt and clearly expect more growth.
  • Rivers of cash end up pushing house values higher and indebting all of society, instead of being channeled into more productive areas, creating jobs.
  • Exempting residential real estate gains from the tax system bestows a huge benefit and advantage on one segment of society, which tend to be the old farts all we hip, vaping, Snapchatters hate. How is that fair?

This is a view widely shared by our political class. Whether any government has the stones to act upon it remains to be seen, but now that the Mills statistically outnumber the wrinklies, it’s only a matter of time before it happens. So, what would this tax look like?

Simple. You flip, you pay. If you live in a house and reno it to sell, you pay. If you’re a temporary owner, like Jeremy, you pay. Kesselman reflects the view that the tax on profits should be in excess of 50% for real estate occupied two years or less, declining to maybe 20% or so after a dozen years in the same place. The adjusted cost base could take into consideration inflation and renovations, with (perhaps) a lifetime limit on taxless gains. Plus, the cap gains tax could replace land transfer taxes – so people get dinged when they sell, instead of when they buy.

Yes, there’s logic here. The more unevenly tax is applied, the greater the economic distortions which result. And, yes, it would be the kiss of death for real estate speculation. Yes, the moisters would love it. And, you know, it’s probably out there. Maybe not this time, but later. Govern yourself accordingly. Like Jeremy.

Meanwhile, more evidence the whole market is tilting towards the ditch. Yesterday CIBC gave us a data dump showing, most notably, that eight in ten newbie buyers plan on selling, with the majority saying they wish Mom had never talked them into that mother of a mortgage.

Now the Royal has a new poll which is realtor-cringeworthy. Only a quarter of people plan on buying a house in the next two years, down from a third – and this is why: almost 60% expect prices to fall, while half don’t trust the economy and 38% think they can’t afford real estate any more. Which they probably can’t. Worse, a third say they’d freak out if their mortgage payments went up by just 10%. That, of course, is an eventual certainty. Now combine it with CIBC’s data showing 61% of owners won’t sell because they can’t afford to buy again, and you can see this market is pooched.

Last call.

176 comments ↓

#1 Tudval on 04.11.17 at 6:10 pm

I call ‘bull’ on the half million $$ gain in 11 months. The houses selling now for $1.8, were selling last year $1.5 mil and over. Again, there was no 30% jump in prices, it’s all fabrication based on skewed averages. Either our analysts lack the mental acuity to understand the numbers or they are part of some agenda to force government intervention.

#2 Lulu on 04.11.17 at 6:16 pm

HaHa!!! This maybe another tactic that they use to urge sellers to put their home listed for sale to soother the draught. I still believe the main culprit is the interest rates, if the rate remain low, ppl will do two three part time jobs to support it, yes, new regulation will come out like CGT, come to think of it, if prices keep increasing and you pay the CGT, you may make less, but you are still making a killer profit, just not as much as before, kinda like HK situation,they have those double stamp tax, sell within 2 years tax, but it did not slow one bit. Ppl are still line up to buy pre-construction and flip the existing day and night. so, before Poloz finally raise rate, it will remain the same. Sad. but true!

#3 Kathleen is a corporate puppet on 04.11.17 at 6:17 pm

Kathleen will do nothing . Her meeting with in the corporate pocket Tory tells me all I need to know. Plus they dont want to put in a foreign tax cause they are afraid of causing prices to drop. They will talk with vested interests since they are in their pocket. Canada hates free and open markets.

#4 Tudval on 04.11.17 at 6:17 pm

And about the things our outgoing activist premier might do… nothing is irreversible. 90% chance the next government will be PC, which means a reversal of all non-sensical myopic approaches to long term issues, and a return to common sense.. shall we call it revolution, or.. re-revolution perhaps? In any case, it’s coming and if we made it so far under the Liberals, it’s only looking up after they are booted out.

#5 Raj on 04.11.17 at 6:22 pm

Anything below 50% over 2-3 years not acceptable , prices must correct to the level where a common man can buy a home

#6 The real Kip on 04.11.17 at 6:23 pm

More fear-mongering. Wynne will do as her federal compadres did in their second budget and that is talk large and do little. Bonafide homeowners living in their principle residence have little to fear in the final year of Kathleen Wynne’s mandate.

Besides, as you e already noted, they really need to do nothing at this point except watch this market roll over.

#7 James Vu on 04.11.17 at 6:24 pm

I live in Vancouver. Drive to work every day and there are more and more for sale signs without the big ‘SOLD’ on it like before. How long before prices make a significant retreat I don’t know but like Garth says, if you asked these people if they’d pay their house’s value for one similar, they probably wouldn’t.

#8 Jay on 04.11.17 at 6:26 pm

That could conceivably have ramifications far beyond overheated Toronto. I can see poor Dryden and Kenora, North Bay and Sudbury and Timmins affected just as dramatically.

It would change a lot of people’s plans quickly.

#9 Bigrider on 04.11.17 at 6:27 pm

You’re nothing if not tenacious with your “RE is over -valued ” message Garth.

Serious question and as a long time visitor ,poster and beaten down RE bear myself, what evidence would you need to see in order to possibly re-adjust your position on the matter?

So far, my mother in law ,as well as all my Italian zio’s and zia’s have been correct in their assertions that real estate only goes “uppa Uppa, UPPA ” !

#10 Alice on 04.11.17 at 6:29 pm

Reminds me of those bubble charts, where every’s like “the new normal” before the pop. More supply, less demand, and higher prices in Vancouver. Sure, it’s a supply issue…

https://betterdwelling.com/city/vancouver/what-bubble-vancouver-real-estate-prices-surge-12-8-in-march/

#11 Post on 04.11.17 at 6:45 pm

I read a simlar proposal: All capital gains on houses, whether they’re owner occupied or rentals, are taxable but there would be the capital gains exemption (currently 50%) like there is on any other profits. You would pay taxes based upon your bracket. This would be applicable for the first 2 years of ownership. Every year for 10 years after the first 2, 10% of the capital gain would be exempt until after 12 years, all capital gains would be non taxable.

Sounds good to me. And, I’m hardly a leftie like you call it.

Capital gains on real estate is taxable in the US and most of the other G7 countries.

#12 TrumpForTheAges on 04.11.17 at 6:45 pm

A capital gains tax is illogical….even on a declining scale for if you tax gains then you also provide relief on losses. If the market is a bubble ready to pop….the government would be assisting all of those “greater fools” who have only recently entered the market.

The right answer is to raise interest rates although we may be seeing what that is doing to the US economy? How about that latest jobs report and Q1 GDP downgraded to an annualized 0.6%?

The bond market is also signalling that there won’t be 2 or 4 more increases this year?

#13 Keith in Calgary on 04.11.17 at 6:48 pm

In Brasil you are taxed at your median rate when your property sells, regardless of whether or not it is your primary residence, or an investment. It’s always been that way. While it slows speculation significantly and helps keep a lid on prices……..the last 15 years have seen record easy availability of mortgage credit to a populace that has never used it before.

Ergo, they still had a boom, b u tif was caused by a dramatic increase in first time buyers with new credit (a one time historical event), which caused a bubble, and now it is bursting. But before, property prices were often flat and about 50% less properties traded.

#14 Keith in Calgary on 04.11.17 at 6:49 pm

Forgot to add, I ‘ve got absoltuely no problem with taxing all real estate upon it’s sale, especially owner occupied properties……..and I am a conservative. There is no valid reason it should be tax exempt.

#15 congrats.. on 04.11.17 at 6:50 pm

Jeremy called today. He’s listing on Thursday for $1.8 million. The latest in a string of people in my circle who have decided to bail while the bailing’s good. “If I get it,” he asks, “then how in conscience could I possibly turn it down? That’s a half-million gain in eleven months.”

………

tax free too!! brilliant

#16 Stone on 04.11.17 at 6:56 pm

Does the gouvernment have the testicular fortitude to really implement anything to curb the real estate market insanity? Only time will tell. Come on interest rates! Uppa! Uppa! Uppa! You can do it Poloz! Yes you can!

#17 Dan.t on 04.11.17 at 6:59 pm

Still enough for maybe one last round of fools who still blindly follow real estate sponsored news to rush in in select markets, like yvr and GTA because global tv said condo market is hot … or lower mainland as smart people cash out of van and pawn off life long bank servitude to some poor millennia who hasn’t got the memo yet.

But it’s different this time I thought. Based on piles and piles of debt. So actually is different this time, much much worse than any mess Canada has ever created and it’s been a whole country so plenty of blame to go around…from government policies, to real estate sponsored new brainwashing the masses, to group think and herd mentality…. or is 450k condos and 800k houses peanuts for all Canadians?

95%leverage is friggin awesome when price just keeps going up but if not, then ouch!

And it’s about time the under 30 crowd woke up- once a shift happens in how people see the market – look out. Probably would have happened earlier if the real estate mafia made past prices easily accessible to buyers- how does it not piss people off to pay some speculator 180 grand extra because they bought s condo or house 1 year earlier. Anyone leveraging themselves now to buy overinflated housing deserves what they get.

#18 crowdedelevatorfartz on 04.11.17 at 7:07 pm

@#8 Jay
KENORA?
WTF?
KENORA is a housing hotspot?
The best thing about Kenora is that the TCH now goes around it instead of right through its squalid downtown core.
Kenora…..brings back memories I’d like to forget….

#19 zee on 04.11.17 at 7:09 pm

Hey Garth

These extra taxes will apply only to second property. Correct?

Will this not result in less property for sale due to these extra taxes being added on after it becomes law?

I would imagine all property to be included. — Garth

#20 HoweStreet.com on 04.11.17 at 7:10 pm

Ross Kay on HoweStreet.com Radio:
Can Canadian Real Estate Only Go Up?
The difference between real estate stats and data.

http://www.howestreet.com/2017/04/10/can-canadian-real-estate-only-go-up/

#21 Cottingham a bargain on 04.11.17 at 7:14 pm

http://www.citynews.ca/2017/04/11/whats-best-neighbourhood-city-moneysense-found/

Hate to say I told you all so about Richmond hill , west side along yonge st up to major MACKENZIE being undervalued and continuing to appreciate at extreme rate but I did .

#22 young & foolish on 04.11.17 at 7:14 pm

Well, with a 70% home ownership rate, I suspect more new taxes will just usher in Kevin O’Leary and his ilk to office.

#23 MichelinMan on 04.11.17 at 7:23 pm

#9 Bigrider

You’re compensating. Va Fa Napole!

#24 Economystical on 04.11.17 at 7:24 pm

I continue to be somewhat surprised by your tone, Garth. Certainly a man so well versed in economystics can not help but see the beauty of a capital gains tax on residential housing.

The ultimate goal must be kept in mind, which is tax levies in excess of 100% of GDP. The government needs this to function and also achieve social justice through redistribution.

Now the unenlightened might ask “how can you tax someone more than he earns?” and indeed on the face of it that seems like a difficult question to answer using simple math. But we don’t use simple math around here.

So let’s take the example of the mythical “Jeremy” you gave here. Or should I say typical “Jeremy”. You say he’s looking to gain 11 years worth of salary by selling his house, and indeed he is, so long as he doesn’t need another house. So what we are doing by taxing him on the gain is creating 11 years worth of income taxes in addition to what he already pays. It’s hard to beat that kind of leverage.

Now what if Jeremy decides to buy another house of the same value? Well, the government has already taken 50% of the money he gained so that will go on the new mortgage. Boon for the banks! And don’t forget the banks pay taxes too. Plus he has to work that much longer now before he can retire to pay the new mortgage amount, and we’ll be collecting taxes on that all the way along too.

But don’t worry over poor Jeremy, because his new house will continue to appreciate wildly as well, so not only will he gain another 11 years worth of salary, we’ll get another 11 years worth of taxes. By this method we will eventually achieve the promise of economystics, where everyone pays more that 100% of their income in taxes but is still getting rich off of wildly inflating asset prices. We’ve been doing it for years in the stock and bond market, with great success. Now, it’s time to move into all other asset classes. With the proven track record of success we have, there is no reason to harbor any doubts.

The formula is actually pretty complicated but it can be sort of expressed for the simple as such: Tax rates in excess of 100% supported by doubling the value of assets and personal debt every 10 years. It’s so simple it’s brilliant. It works kind of like double down black jack. If when playing black jack you double your bet every time you loose, eventually you will get all your money back. So long as you don’t go broke first.

Now get out there and buy all the things!

#25 Wacky on 04.11.17 at 7:30 pm

Pretty idiotic for people to want to pay more taxes for their principle residence?
So, let me get this right, I own a house for 10 years and need to upgrade because my family is growing or I want to live elsewhere and I’ve made a huge pile of doe on paper but have to sink every cent back in for my new place…
Ah, why would you want another tax?
There’s already a tax on flippers!

#26 BMC on 04.11.17 at 7:34 pm

Wynne is in full re election mode, merrily spending tax dollars to buy back favor, doling out cash to teachers and public sector unions, so she can once again count on their support come the election. Remember “the vote for them and you will lose your jobs” meme, expect that to be regurgitated this coming election, and with 1 in 5 working for government the election will be much closer than people think, My prediction, a Liberal minorty government propped up by the NDP, Then we are totally pooched

One thing she will not do is jeopardize her chances by bringing any new forms of taxation, so i don`t think we will see a residential capital gains tax unless she is contemplating political suicide

Ahh the residential home, the gift that keeps on giving and giving and giving and giving for various levels of governments
Land transfer fees, lot levies, HST on agents fees, HST on utilities, HST on property insurance, HST on home improvement materials, HST on home contractor services, full school taxes on multiple properties incl. cottages , and the biggest plum of all, market value assessment, the “we are going to charge you more taxes, without providing any more services than your lower assessed neighbor” tax

And now, talk of taxing gains at point of sale, keeping in mind that market value assessment already taxes gains in property value, we will have ourselves a good old double whammy theft of wealth.
New taxation brought in to bring control to an out of whack real estate market that was largely created by their own policies like the greenbelt act that put a limit on development of homes to an area of the country that gets the lions share of the 250,000 immigrants that come to Canada each year

Anyone who advocates for more taxation is a fool, what we need is better governance

#27 yupkime on 04.11.17 at 7:35 pm

http://www.myrealtycheck.ca
This is your future Toronto?

I’m Goin’ Down
Lyrics by Bruce Springsteen

We sit in the car outside your house you’re quiet
I can feel the heat coming ’round
I go to put my arm around you
And you give me a look like I’m way out of bounds
Well you let out one of your bored sighs
Well lately when I look into your eyes
I’m going down, down, down, down
I’m going down, down, down, down
I’m going down, down, down, down
I’m going down, down, down, down …

#28 Cottingham a bargain on 04.11.17 at 7:37 pm

#23 Michelin man in response to big rider at #9.

Actually, I wouldn’t mind hearing Garths answer to his question either. Not sure what you meant by his ” compensating” .

Sounds like he is admitting he was wrong on his position, which he was .

#29 bob on 04.11.17 at 7:40 pm

last call… for this year.
will open for business again next year.

#30 I'm Not Poloz on 04.11.17 at 7:48 pm

This isn’t going to end well.

Poloz May cut rates tomorrow in the Bank of Canada outlook.

Poloz was very angry that the Loonie is at 75 U.S. cents. He wants it to be at 60-cents, lowering to U.S.. $0.50 when oill prices reach the level of $60 U.S. bbl.

Poloz believes that Toronto is in demand because in Toornto, the politics of white women sufferage allows women to be treated with respect to “earn” their six-figure career, while Filipino women are forced to work in slave wages to be their nannies, and Native Indian women are forced to live in reserves which aren’t taken care of the government,

but Poloz calls me “Misogynist” to state that the typical career woman in Toronto is only a tiny fraction of why real estate in Toronto is expensive.

Poloz is partially truthful because career women can now take on very large mortgages to purchase condos and small detached homes, which artificially drives up demand for now, because when those career ladies from Toronto are unable to spew their man-hating vitriol in their retirement years, there comes the purchase of wine and cat food, until a passer-by on the street or the condo floor starts to smell a very rotting decomposing stench ,only for the emergency personnel to find that a miserable old cat-lady (former empowered women from Toronto) died lonely and miserable death in her home in world class Toronto, and the cats that she loved feasted on her carcass.

I can also blame the Foreign Investors who believe that spending over a grand in a club on bottle service to impress those independent cat ladies will be of any help, thus artificially driving not only real estate but the social capital in Toronto, but there is not that sufficient evidence to prove that.

Toronto is a Ponzi scheme and better invest in wine and cat food.

#31 Vit on 04.11.17 at 7:52 pm

I checked some properties that came for sale this week and a lot of newer lived in condos and houses with no furniture in it . So clearly some investors getting cold feet and want to get out before new Apr 27 rules come . I think we not going to have any drastic changes may be some fore dudes tax and rent control and non of them will effect detached home prices . The government have to show that they care and doing as little as possible. So when investors realize this they will pull inventory out of market and will have new bidding war by Fall . One more 20-30% price increase and I can sell and pocket a cool 2 mil.
Canada – Toronto has 160% debt to income ratio but similar economy with 180% ration and real estate market steaming ahead despite implemented foreign taxes and other restrictions .
so if you wont to buy its a best opportunity now and window going to close soon .

#32 ronh on 04.11.17 at 7:53 pm

My son in-law sold his condo and had 90 days to buy
some other real estate. If he didn’t, there would be a tax to pay. He lives in Spain.

#33 Vit on 04.11.17 at 7:54 pm

I checked some properties that came for sale this week and a lot of newer lived in condos and houses with no furniture in it . So clearly some investors getting cold feet and want to get out before new Apr 27 rules come . I think we not going to have any drastic changes may be some fore dudes tax and rent control and non of them will effect detached home prices . The government have to show that they care and doing as little as possible. So when investors realize this they will pull inventory out of market and will have new bidding war by Fall . One more 20-30% price increase and I can sell and pocket a cool 2 mil.
Canada – Toronto has 160% debt to income ratio but similar economy Australia with 180% ration and real estate market steaming ahead despite implemented foreign taxes and other restrictions .
so if you wont to buy its a best opportunity now and window going to close soon .

#34 ronh on 04.11.17 at 7:55 pm

it must be true.

http://www.zerohedge.com/news/2017-04-11/tony-robbins-pitbull-and-5-other-signs-toronto-real-estate-about-crash

#35 Paul on 04.11.17 at 7:57 pm

Tax principle residents, sure the toll on the D.V.P. spelt the death for Wynne!

#36 conan on 04.11.17 at 7:59 pm

#18 crowdedelevatorfartz on 04.11.17 at 7:07 pm

I have met two people in my life from Kenora, and both of them were Pamela Anderson clones. Maybe too many voyageurs?

I vote thumbs up on Kenora, even though I never been there.

https://www.youtube.com/watch?v=dGu6v2OjW8s

#37 traderJim on 04.11.17 at 8:01 pm

Even the Libs, who get positively orgasmic at the thought of ever higher taxes, wouldn’t be so dumb as to tax principal residences.

Just actually enforcing existing tax laws on flippers would be more than enough to do the trick.

I call BS on this one! (Meaning, I’m sure some knuckleheads are talking about it and even pushing it, but I say it never happens).

#38 i'm a dummy on 04.11.17 at 8:05 pm

https://www.realtor.ca/Residential/Single-Family/18006394/50-AILEEN-Avenue-Toronto-Ontario-M6M1E6-Keelesdale-Eglinton-West

for sale 3rd time in 2 years each time for about 100 k more. doubtful they are paying cap gains on it. what these ppl understand that others don’t is that the govt is corrupt and they just want to be re elected and therefore will protect home prices at all costs. they know how to work the system, unlike some dummies (me included) who think the government is there for good governance and sustainable future.

#39 Gasbag Boomer on 04.11.17 at 8:06 pm

Dough or doe, a female deer?

#40 waiting on the westcoast on 04.11.17 at 8:13 pm

Yeah… let’s create massive incentives to stay in your house/locale. Nothing like reducing mobility so when the next rush to the oil sands or some mine/dam/factory happen, people will be even more reluctant to go or transfer.

It’s ironic that governments want innovation and then get in it’s way.

#41 mouldyinYVR on 04.11.17 at 8:14 pm

http://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/during-a-tenancy/rent-increases

We have ‘rent control’ in BC…..hasn’t slowed things down much and owners can be very creative when they want to increase beyond allowable limit. (‘family moving in’/ gotta make major repairs etc.)

#42 Vit on 04.11.17 at 8:19 pm

Correct me if Im wrong . The new rent control rules will make max price to rent a 2 bedroom condo around $1500 . That what is the rent in a old buildings on a Yang street . So instead of getting $2500 a month investor will have – minus $-1000. Plus he had already negative cash flow with a new rules its a killer . I see lots of condos cumming on the market and were all does $$$$ going to go ? My guess it will go to detached housing sector and its mean only one thing prices will keep going up …

#43 Ted54 on 04.11.17 at 8:22 pm

Garth! You have been calling the top for years and years.
Lately you have spent lots of times speculating including on other people’s surveys and musings instead of doing a proper study of the cause and weakness of this market. In one instance this week you stated from a survey a high percentage of boomers will be selling. You pushed this as one of the many signs and indication why this market is pooched. What you have failed to address is where exactly are these people going to move to because despite universal rent control there is not even close to enough rental, senior home rentals available in places that older people want and need to live. Please provide backup details where these older boomers are going to live which has lead to your incorrect conclusion of the coming tide of listings.

#44 Kelowna on 04.11.17 at 8:23 pm

Long term reader and I am surprised to see continued posts that declare that Kathleen will not invoke new taxes since her focus is the upcoming election. Sorry folks, what you are missing is that the majority of voters in TO now want some type of measure / tax introduced yo cool the market and make housing more affordable. Doing nothing would further escalate Kathleen’s inability to get re-elected. A home cooling tax is inevitable – the only questions are how and how much!

#45 not 1st on 04.11.17 at 8:28 pm

Garth, can you get the dividend tax credit and have income from a TFSA at the same time?

#46 economictsunami on 04.11.17 at 8:29 pm

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
Mark Twain

The key driver of Britain’s wildly inflated property market might not be what we think it is

“Conventional wisdom in the UK market — particularly in London — is that supply is too low and demand is too high for housing, creating an imbalance which pushes up prices and makes buying a home more difficult.

However, in her new paper, Lancaster University academic Dr. Alisa Yusupova suggests that more than being centered on supply and demand, much of Britain’s house price growth in recent decades has been fuelled by speculation and exuberance.”

http://www.businessinsider.com/britains-housing-market-is-not-being-driven-by-a-supply-and-demand-imbalance-2017-4?&platform=bi-androidapp

#47 Post on 04.11.17 at 8:39 pm

#12 TrumpForTheAges

“A capital gains tax is illogical….even on a declining scale for if you tax gains then you also provide relief on losses.”
————————
No you wouldn’t. The advantage is that capital gains are forgiven the longer you live there. I think that’s a fare trade off instead of being able to claim your losses.

#48 phil unden on 04.11.17 at 8:43 pm

How would this go over? No tax today, 50% capital gains tax tomorrow.

#49 BS on 04.11.17 at 8:44 pm

Garth’s forecast for taxing housing may come sooner than many think. With the BC election weeks away the BC Green Party has come up with quite the housing tax plan.

It includes a foreign buyers tax of 30 per cent, property transfer tax from zero per cent on the first $200,000 of property value to 12 per cent on a property over $3 million and a tax for lifetime capital gains in excess of $750,000 for principal residences. Ouch!

http://vancouversun.com/news/local-news/weaver-unveils-green-strategy-to-cool-b-c-housing-market-and-better-protect-renters

To be precise, I am not forecasting this, but reporting an idea gaining traction. — Garth

#50 april on 04.11.17 at 8:45 pm

Check out “The Fall Of The Canadian Housing Market – The Bubble Will Burst”. Youtube.

#51 Ummmmm on 04.11.17 at 8:46 pm

I know someone in the GTA who owns 12 properties he has bought over the last 6 to 8 years and he’s in his 30”s.

He’s screwed if things crash!

#52 Post on 04.11.17 at 8:50 pm

I’m not sure why you call this capital gains proposal a moister freindly, wrinkly hating tax. All you have to do is own the property for 12 years and it gives you a gain – tax free. Keeps the wrinkly’s equity intact!

If you have a rental suite in your house or you own a an extra rental property for longer you’re capital gains free if you hold if for longer.

Reduces the flippers and speculators. Preserves the equity for longer term owners whether it’s a home or a rental. And, gives incentives for people to buy/build rental units and keep them in the rental pool for longer.

What’s not to like?

#53 Blacksheep on 04.11.17 at 8:56 pm

Raj # 5,

“Anything below 50% over 2-3 years not acceptable , prices must correct to the level where a common man can buy a home”
————————————
Why, must this happen…..

What the hell does the “common man” have to do with market Demand VS Supply?

#54 crossbordershopper on 04.11.17 at 9:08 pm

for the millions of canadians who work for 15 bucks or less, or are seniors on low goverment pension only, or welfare and disabled people, the unemployed and the otherwise lost, the guys on the farm with no real income. Litterally 10 million canadians if not more, fall in this camp, and in the kids and we are talking half the population.
So, some guy has a gain on a home, good for him, tax him and provide the little people with their just rewards, cigs, beer, food, and a little apartment, free meds, free school, etc. is fair, and the only way it should be.
people think i am wrong, but its simple the gifted, the hard working, the smart, the people who were given the opportunities in life, work and produce to give the little people a little to just get buy. i am cool with that, and this is the way its been for a long time. We are only talking about the little details, how much, when and in what situation, thats it

#55 Cottingham a bargain on 04.11.17 at 9:13 pm

#51 Ummmmm on 04.11.17 at 8:46 pm
I know someone in the GTA who owns 12 properties he has bought over the last 6 to 8 years and he’s in his 30”s.

He’s screwed if things crash!
———

Ya , real screwed , all the way to the bank lol.

Lots of posters here a real shade of green. Very unbecoming

#56 Vit on 04.11.17 at 9:17 pm

Com one people we cant have taxes on a owner occupied home . Its not for a province to decide the all taxation law has to be changed and its a Federal government job. Plus because one city become unaffordable federal government not going to make any waves . Trudeau made it clearly that hes not going to intrude and provinsial government can only do so much .

#57 Sneadly Tinkelton on 04.11.17 at 9:22 pm

A long time ago Smokey posted something about re adjusting your brain waves using 2 two inch magnets . Place one on each temple make sure the force is pushing them away from each other. He claimed that it gives you a clearer connection to the UCC.

I tried it tonight. Got a feeling peak real estate is 2019. How can this be posable.

Where is he?

#58 bill on 04.11.17 at 9:23 pm

#18 crowdedelevatorfartz on 04.11.17 at 7:07 pm
by any chance were you there when the bank robber blew up?

#59 Vit on 04.11.17 at 9:28 pm

#38 Land Size 18.54 feet wide how some body can live in it . ???? I have a garden shed this size .

#60 conjecture on 04.11.17 at 9:31 pm

we have no idea what govt will do. Just as all the pundits were wrong about proposed tax changes a few weeks ago (the budget)

but, gotta kill time talking about something…..

#61 Happy Housing Crash Everyone! on 04.11.17 at 9:33 pm

I’m Not Poloz #30

Toronto is a Ponzi which needs more and more suckers. Since Millennials are LMFAO ” educated ” Toronto has what now seems like a never ending amount of idiots. Boomers would never pay todays prices. To be fair it was the anti free market CONservatives who allowed bankers , mortgage brokers and Realtors to bankrupt Canada. Canada is now a Ponzi scheme and everyone cheers in their glass houses after signing their lives away to a lifetime of debt. All it would take is one thunder cloud to send a shook wave and shatter those glass houses. Canada is facing a direct hit from hurricane shyster. It’s getting darker and darker. Happy Housing Crash Everyone! :-)

#62 Mark on 04.11.17 at 9:33 pm

I guess we “responsible” people should take comfort in the fact that this housing bubble has diverted capital away from the real assets of the Canadian economy. And thus, ensured that the returns in those assets will be outsized going forward as the housing bubble crashes.

Remember the 1990s? The TSX tripled over that decade. All the air that inflated the housing market, eventually went to inflate the stock market.

The TSX is now breaking out of its 10-year slumber. The gold sector is setting itself ablaze with gains (remember my prediction earlier this year!). As Toronto RE prices continue to stagnate/fall, speculative enthusiasm will eventually drive some significant owner returns in the stock market.

#63 Stas on 04.11.17 at 9:38 pm

What are moisters?

#64 Greater Fool on 04.11.17 at 9:46 pm

@ #13 Keith in Calgary
In Brazil no matter what happens, there is always a Favela (Slums) for you to live in. Real Estate can be expensive in rich areas but there are poor areas for cheap if you don’t want to get yourself in huge debt.
Now, in Canada, if you don’t have enough money what do you do? There are no Favelas here, not yet…. Some cities have prototypes of it: http://www.cbc.ca/news/canada/british-columbia/victoria-tent-city-injunction-1.3712431

If real estate continues to beat inflation (salaries) by 10% every year in a few years we will be just like Brasil, full of slums…..

#65 For those about flop... on 04.11.17 at 9:47 pm

I am just watching a program called Expedition Unknown.

It features a bunch of Americans traveling the globe looking for elusive things.

They are in my native Tasmania looking for sightings of the supposedly extinct Tasmanian Tiger.

The whole storyline is a hoax,they are using it as a cover story to see the real beast that a lot of people want to see ….Affordable Housing.

It’s a real killer…

M42BC

#66 Kilt on 04.11.17 at 9:48 pm

Hey Garth.
Did the US do any of this in order to dampen or correct their housing bubble? We seem to have even exceeded their bubble. I have friends down south who kept buying up in the market pre-GFC until they purchased a 500K home in the suburbs outsde LA. This was a nice home that would fetch 900K in Victoria, never mind Vancouver.
Then the bubble burst. Many people on his block walked away from their homes. At one point his neighbor was listing for 105K. It didn’t sell! He was pretty much near retirement, and had to take on extra work so he could pay down the mortgage. As did his wife. And they were both stressed beyond reason worrying about the home value. When prices were rising, he wasn’t really worried about going into retirement with a big pile a debt. That changed when prices crashed though.
My question, why is it different here?
Supply/Demand, sure, but even that seems to be getting stretched a bit. And banks keeping warning people, but they also keep lending money.
I believe the Liberal Government is going to try and prevent the bubble from bursting by creating demand though immigration. But I have German and Croatian friends who plan on going back home because of the prices. Even my Doctor who just immigrated from the UK complains about the cost of purchasing a home in Vancouver.

Kilt.

#67 april on 04.11.17 at 10:02 pm

#50 – I finished listening to it but was rather disappointed…..

#68 Al on 04.11.17 at 10:06 pm

Looks like Wynne prefers to tax Canadian Citizens rather than foreign buyers even though the foreign buyers cannot vote.

#69 Confucius Say on 04.11.17 at 10:15 pm

Vit, Vit, Vit – you are growing old by the minute.

To all of you who don’t understand to what is about to happen in the GTA, go towards the light and listen to Confucius.

Confucius say,

“Everything has its beauty, but not everyone sees it.”

The beauty of this RE market is that it is about to fall and not everyone sees it.

Over and Out.

#70 dakkie on 04.11.17 at 10:17 pm

“Canada: Irrational Exuberance?” Wild Housing Speculation Drives Entire Economy
http://investmentwatchblog.com/canada-irrational-exuberance-wild-housing-speculation-drives-entire-economy/

#71 Magnetic Smoked Alien on 04.11.17 at 10:21 pm

#57 Sneadly Tinkelton on 04.11.17 at 9:22 pm

A long time ago Smokey posted something about re adjusting your brain waves using 2 two inch magnets . Place one on each temple make sure the force is pushing them away from each other. He claimed that it gives you a clearer connection to the UCC.

I tried it tonight. Got a feeling peak real estate is 2019. How can this be posable.

Where is he?

..
How’s life in Ecuador? No way you could stay away from here LOL

#72 45north on 04.11.17 at 10:21 pm

I do think the GTA is about to crash all by itself. It just went parabolic. If Wynne does anything she’s going to be blamed.

In Woodbridge people are mortgaged up to their eyeballs. Wynne is going to tell them: your mortgage stays the same but we’re going to tax you on anything you make on your house! Suppose she says if you own your house for more than a year then we’re not going to tax you. Then she’s going to miss out on the home renovators who renovate one house a year. Also the provincial rules for capital gains would conflict with the federal rules. imagine going to court with CRA and citing provincial regulations.

#73 Leo Trollstoy on 04.11.17 at 10:24 pm

Toronto real estate prices will continue to rise. There’s nothing really stopping it. Especially now that the Canadian economy is on the upswing and money will be Cheap for a long long time

#74 Sneadly Tinkelton on 04.11.17 at 10:24 pm

Garth I’m a long time reader first time poster tonight.

It felt good. I’m now in the pack. Woof.

You say there are millions that follow this blog but only a tiny % of readers post comments.

Why is that? Has anyone got an answer?

The stats show less than 1% of daily readers post. The rest have lives. — Garth

#75 Leo Trollstoy on 04.11.17 at 10:30 pm

BoC keeps rates steady. As expected. Over borrowing continues. Toronto real estate prices continue upwards.

#76 TurnerNation on 04.11.17 at 10:34 pm

Ah Bigarider’s back – to fill void of SM’s absense.

Saw a banner ad – from 300-400k+ …in Caledonia!
WTH…checked the map this is middle of BF nowhere.
http://www.losanihomes.com/future-developments.php?community=5

Ah…Losani homes…………

#77 Manitoban whale on 04.11.17 at 10:41 pm

#18 crowdedelevatorfartz on 04.11.17 at 7:07 pm
by any chance were you there when the bank robber blew up?
***
Funny you bring that up, a guy I work with was in the crowd of onlookers that day. Him and his friends were quite young, this was a long time ago.
Kenora today is much different from the past. It has become Manitoba cottage country, with very expensive lakefront and island properties.

#78 Wait There on 04.11.17 at 10:42 pm

Looks like everyone is standing still expecting the other person to be the Greater Fool. Everyone’s pointing the fool to be the other person….until a few realize that they’re gonna be the fool and then watch the fun.

#79 Aliens of the Ecuadorian Jungle on 04.11.17 at 10:54 pm

#74 Sneadly Tinkelton on 04.11.17 at 10:24 pm

Garth I’m a long time reader first time poster tonight.

It felt good. I’m now in the pack. Woof.

You say there are millions that follow this blog but only a tiny % of readers post comments.

Why is that? Has anyone got an answer?

The stats show less than 1% of daily readers post. The rest have lives. — Garth

And the most prolific posters live in casinos.

#80 GreyCat on 04.11.17 at 11:00 pm

What’s about to happen can be traced back to Carney:

https://www.bloomberg.com/view/articles/2017-04-11/canada-s-housing-bubble-can-be-traced-to-carney

#81 T-Rev on 04.11.17 at 11:00 pm

I’d bet heavily against a CGT on primary residences ever become reality. Isn’t home ownership rate in Canada 70%? That’s 70% of voters who would pillary the government that implemented such a tax. I also see it as major drag on the economy- nobody would be able to afford to move, which seriously inhibits labor mobility and density efficiency. Imagine, bought house five years ago for $500k. Sell for $800k to take new job. Pay marginal tax rate on 50% of gain. Walk away with $650k, and have to throw another $150,000 on top to buy the equivalent house you were living in, because the government has your other $150,000. You can never afford to buy the same house as you just sold in a rising market. The only way to ensure you stay ahead is to BUY A SECOND HOUSE so that if you move you can sell them both and make half a gain on each which gives you enough to stay whole on your next primary residence. And once you get into that next home, repeat the cycle by purchasing another second house.

To me, it sounds like the only way to beat a CGT on a primary rez is to own multiple properties. It’s a hedge against the tax you’ll pay if house prices rise. Pretty much a recipe for increasing the amount of speculation, and the only thing it will accomplish is putting more money into government coffers at the expense of indebted families.

Wanna kill the bubble? Encourage more houses to be built by making more land available to developers, allowing easier re-zoning, and stopping NIMBY-ism when it comes to high-density development. Flood the market with so much housing that it can’t possibly be absorbed. Tear down Vancouver specials and allow skinny mid rise apartment buildings to be built next to multi-million dollar SFHs. This isn’t a problem that needs regulating- it’s a supply issue that needs de-regulation in order to balance. This is the price we are paying, as a society, for the suffocating over-regulation that permeates our entire lives. Everything is too bloody difficult (ie expensive) to do nowadays because of government interfereance. Cheap money, plus a lack of available housing supply has done this. Turn the taps on on the supply side by allowing people to get creative. If every man, woman, and child from China (or Ontario for that matter) wants to own a condo in Toronto, let’s build a billion condos. I don’t see the problem. Let’s rip down the SFHs to build row-housing. Lets rip down the row housing and build apartments. Hell, let’s rip down 20 story buildings and build 100 story buildings with even smaller units. We’re pissing away a great opportunity to generate even more economic activity by worrying about how to slow the market down when what we should be doing is feeding it so much it can’t choke any more down. If it really is foreign money (hotly debated I know), then why not take the opportunity to sell the Chinese our goods and services? And if it’s not, let’s satiate the domestic demand at the very least. This isn’t a problem, it’s an opportunity. In typical Canadian fashion, we can’t see it for what it is and think that something must be wrong if everyone wants what we have. Reminds me of getting oil to tidewater- the world wants our goods, but we’re to damn socialist to make decisive moves to get it there.

That, and people need to start voting with their feet, too. Don’t stay in Toronto; leave and go to Halifax, Edmonton, Calgary, Regina, Ottawa, Montreal, or QC. I’m thinking about getting my RE license in AB and setting up offices in suburban Toronto.

#82 crowdedelevatorfartz on 04.11.17 at 11:00 pm

@#36 conan
“I have met two people in my life from Kenora, and both of them were Pamela Anderson clones.”
********************************************

The key word is “FROM” Kenora. Nobody sane wants to live there.

P.S. I didnt realize Dr. Evil has set up a cloning/silicone factory in the Canadian hinterland…….

“Throw me a fricken bone people”
“Riiiiiiiiiiiiiiiiight”

#83 Sneadly Tinkelton on 04.11.17 at 11:00 pm

#74 Sneadly Tinkelton on 04.11.17 at 10:24 pm
Garth I’m a long time reader first time poster tonight.

It felt good. I’m now in the pack. Woof.

You say there are millions that follow this blog but only a tiny % of readers post comments.

Why is that? Has anyone got an answer?

The stats show less than 1% of daily readers post. The rest have lives. — Garth
…..

Wow I’m in the 1% club I feel rich, what a mon-u-mental day. Is it a crime not to have a life, I think your comment was a passive agreesive insult to cats.

#84 crowdedelevatorfartz on 04.11.17 at 11:03 pm

@#39 Gasbag
“Dough or doe, a female deer?”
++++++++++++++++++++++++++++++++++++
Seriously? Julie Andrews?!?!?

Get with the topic.
All the greaterfools that bought recently will say ……………………………………………..”DOH!”

#85 Cheap Houses on 04.11.17 at 11:04 pm

Am I the only person posting here who knows

1. money laundering is illegal
2. the RCMP are not doing their jobs (along with the CRA)

Oh….but I forgot. ALL countries in the world today are corrupt. There is justice. And there is JUST US (the bankers and the money launderers).

#86 No Mercy on 04.11.17 at 11:07 pm

I’ll post tonight.

Where is SM?

It is seriously disturbing….

I love Garth and co.’s posts.

But SM is the spice.

SM, hope you are well.

#87 crowdedelevatorfartz on 04.11.17 at 11:11 pm

@#58 bill
“by any chance were you there when the bank robber blew up?”
*******************************************
Nah! was stuck there for 3 days after my car broke down in 1980.
If I had of been there when THAT happened…….
It would have confirmed all my prejudices about that god forsaken hell hole.
Or I would have joined him……

http://www.google.ca/url?url=http://www.ckdr.net/news/567358697/40-year-old-kenora-bomber-remains-mystery&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiXs92r-J3TAhUC3GMKHb9oB0oQFggbMAE&usg=AFQjCNH58aQsk0F_AQmen1F2iIiWvuSvMA

#88 Just a normal guy on 04.11.17 at 11:21 pm

How about the below for Tax calculation :

Taxable amount = SellingPrice – buyingPrice – buyingPriceXNoOfYearsxAvgPrimeRate/100

#89 crowdedelevatorfartz on 04.11.17 at 11:22 pm

#74
“The stats show less than 1% of daily readers post. The rest have lives. — Garth”
*******************************************

Your words kinda hurt me deep down…..then I realized it wasnt your words causing me pain…..the elevator was “bekoning”
OR
You mean “Forsaken Us Smoking Man” has a life now? Unlike moi?

#90 Leo Trollstoy on 04.11.17 at 11:27 pm

To everyone, I have sinned.

I keep believing something that is not true.
What can I do?
I keep telling all of you that real estate prices will continue to rise
But it’s all lies
What can I do?
I’m slow, lethargic and bald
What can I do?
I keep saying that money is cheap
And yet, I have nothing to eat
What can I do?
I will keep my house
Scurry in it like a mouse
And hope one day that I’m as smart as all of you.

#91 YVR Update on 04.11.17 at 11:37 pm

More Doom polls from the Banks….

…hoping that gov won’t bring in new regulations as the ‘market is slowing by oitself’…

sigh..corruption at its finest.

#92 YVR Update on 04.11.17 at 11:41 pm

#49 BS on 04.11.17 at 8:44 pm
Garth’s forecast for taxing housing may come sooner than many think. With the BC election weeks away the BC Green Party has come up with quite the housing tax plan.

It includes a foreign buyers tax of 30 per cent, property transfer tax from zero per cent on the first $200,000 of property value to 12 per cent on a property over $3 million and a tax for lifetime capital gains in excess of $750,000 for principal residences. Ouch!

http://vancouversun.com/news/local-news/weaver-unveils-green-strategy-to-cool-b-c-housing-market-and-better-protect-renters

To be precise, I am not forecasting this, but reporting an idea gaining traction. — Garth
———————–

Anyone with half brain knows that the Green party in BC is ‘funded’ by BC Liberal supporters. The vote split is how the BC Liberals won last election.

Same will happen this election.

Then the week after, the BC Green party members will be out protesting pipelines and a new dam. Hilarious.

#93 Shirley's Twin Sister on 04.11.17 at 11:47 pm

#86 No Mercy on 04.11.17 at 11:07 pm

I’ll post tonight.

Where is SM?

It is seriously disturbing….

I love Garth and co.’s posts.

But SM is the spice.

SM, hope you are well.
..

Obviously he has been kidnapped by Shirley Valentine. Like Kathy Bates in Misery, she has smashed all his non important bones.. and he is been forced to re-write his stunning best seller which DID NOT have Shirley in a starring role. A bigly mistake!

Shirley is taking good care of him and once he sorts out this omission he will be released and free to fly his spaceship again and bug all the lefties and commies who haunt these pages. In the meantime read Sneadly.

#94 yorkville renter on 04.11.17 at 11:58 pm

#30 – Not Poloz – my live-out Philipino Nanny earns a decent income… definitely not slave wages. Between her and her husband they make the average Toronto family income.

#95 Shyster Realtor on 04.12.17 at 12:06 am

Hi. I am a shyster realtor who posts on garths blog everyday posting nothing but fiction and idiot logic. What do you expect as I am uneducated and lazy. If you can con a client into signing then $$$$$$$ for doing nothing is yours. Lately times have been good for a few but terrible for the rest of us shysters. I hope by posting fiction and lies i will benefits from this housing bubble…..opps i mean balanced market. Everyone wants to live here , 300000 people move to gta , everyone has money . Shyster rule 101 if you repeat a lie over and over then people will repeat it as true. Its the shyster way

#96 Victor V on 04.12.17 at 12:06 am

Terence Corcoran: From Toronto to Australia, central banks are blowing housing bubbles

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/fp-comment/terence-corcoran-from-toronto-to-australia-central-banks-are-blowing-housing-bubbles&pubdate=2017-04-11

#97 GrayJayFlyer on 04.12.17 at 12:15 am

Capital gains on principal residence?
No problem.
But let’s have the same interest cost deduction any other taxable investment is allowed.
Think our mortgage debt is high now? Just imagine the stampede to see [email protected] if our worthless politicians actually went ahead with interest deductible mortgages. LOL

#98 jas on 04.12.17 at 12:23 am

Garth,
When Kesselman says: the tax on profits should be in excess of 50% for real estate occupied two years or less, declining to maybe 20% or so after a dozen years in the same place.
What is he thinking in his screwed mind?
So he wants the govt. to tell the public where to stay put?
Is it not a free country ? Or is it?
His views are good for nothing.

#99 mousey on 04.12.17 at 12:54 am

Re: I’m not Poloz
Cats feasting on cat lady’s decaying carcass?!! You’ve seen Trainspotting one too many times. Won’t even comment on all of the strange references to working women with daycare driving the real estate bubble and what, ruining the previously perfect world order?

#100 Fortune500 on 04.12.17 at 12:59 am

I’ve said it before, I don’t see why primary residences should be exempt from capital gains.

I did when homes were homes, but once the country decided on-mass and with the support and encouragement of the government, to treat homes as investments upon which a vast majority have planned their retirements around, well that changed everything.

Houses are no longer for living in when it comes to Canada, Australia, and New Zealand, they are investment vehicles bought and sold for profit. They need to be treated as such unless we decide as a society that houses are mainly for living in again.

The biases here are obvious. If you were born at a certain time and got in before the bubble, you don’t want this, and if you were born after (or waited) then you do want this. But my concern is for my children and their children. We are heading towards a landed aristocracy situation here where wealth and financial stability is dictated by whether you inherited land vs whether or not you personally have done anything to work for it.

Canada needs to decide what kind of community/country it wants to be.

#101 paulo on 04.12.17 at 1:17 am

ABUSE It And LOOSE it : A story about how a group of speculators mostly home grown have managed to manipulate the real estate market, and abuse the best tax break afforded to most Canadians. Now with the vast majority of the electorate crying foul,and demanding god forbid more big goverment intervention i think it is safe to say that the best tax break will be significantly reduced if not lost, in addition to more interference in the free market god help us

#102 sugarlips on 04.12.17 at 1:20 am

So if profits are going to be taxes on principal residence sales, does this mean we can get write off the loss if we make one? Fairs fair!

I’d say half of Calgary would want to take advantage!

If this does trigger a real estate crash might the govt suddenly have to wear the realised losses nationwide

#103 FLHTK on 04.12.17 at 1:25 am

Wow half a million tax free….goodbye Canada hello tiki bar on the beach in the Phillipeans forever…..along with a Harley of course

#104 Leo Trollstoy on 04.12.17 at 2:19 am

My username cannot be denied!

Mission accomplished.

Lol

#105 Dan.t on 04.12.17 at 3:33 am

#30 I’m Not Poloz Haha, WTF! Disturbed but kind of funny. Sounds like it’s awesome living in TO. Cool culture.

#106 Jay on 04.12.17 at 4:31 am

#18

That’s rather my point. Most of Ontario isn’t Toronto, but this blunt instrument of a policy change will affect not just overheated Toronto, but north and Northwest Ontario, which have been disproportionately harmed by many policies meant for Toronto already.

The last thing many communities need is yet another existential threat from Wynne’s wretched policies. Many people are already paying almost $1000/mo for winter hydro bills, and companies have to deal with global adjustments, and industry has taken a beating, now yet another “Toronto first” policy is going to harm non-torontonians yet again.

#107 nubbers on 04.12.17 at 5:02 am

#42 Vit on 04.11.17 at 8:19 pm

That had me laughing. I didn’t know condos could get that excited.

I guess you can be Smokie’s stand in, for now.

#108 traderJim on 04.12.17 at 5:50 am

#64 Greater fool

No favelas in Canada? You mustn’t have heard of the ‘container house’ trend, or the ‘tiny house’ movement.

Both being sold as green and trendy, and people are falling for it.

“You too can live in a metal box that used to carry garbage made in China to stock crappy Tire stores.”

#109 traderJim on 04.12.17 at 5:57 am

It occurs to me that all the BoC needs to do to solve its ‘problem’ of not being able to get inflation to a level that will bankrupt seniors quickly enough is to start correctly accounting for the cost of housing in their CPI stats.

I haven’t done the math, but seems to me that housing, which takes up a huge (30%? 50%?) portion of every family’s spending rising at 30% per year might mean that inflation is actually more than 2%.

But what do I know? Obviously the economists and statisticians saying prices are only rising at 2% or less know what they are doing.

#110 A Reply to #108 traderJim on 04.12.17 at 7:04 am

There’s a difference between consumer price inflation and asset price inflation.

Here are the main contributors to the 12-month change in the CPI (as of Feb. 2017):

http://www.statcan.gc.ca/pub/62-001-x/2017002/aftertoc-aprestdm1-eng.htm

Here are the various statistical tables (as of Feb. 2017):

http://www.statcan.gc.ca/pub/62-001-x/2017002/tablesectlist-listetableauxsect-eng.htm

#111 westcdn on 04.12.17 at 7:06 am

I have being reading up on how to survive as a DIY (do it yourself) investor. “A man has to know his limitations” – Clint Eastwood movie quote. This link is about Warren Buffet’s advice for a poor man’s DIY investment strategy.
http://tonyisola.com/2017/04/dont-be-an-elitist-investor/

Greed and fear are your enemies when speculating. Trying to scoop the last dollar on the table will be your undoing. I have no problem selling half when I get a small windfall – protecting capital rather than getting rich quick is my key objective. However, selling half a principal residence is problematic – good luck with that one. I see bigly social problems coming and I don’t believe government as run today have vision or ethical leadership so I don’t want government managing me. I will obey laws and live with social infrastructure rules but don’t expect me to be happy with most of them.

I am still against making a principal residence a business so let owners rent out parts of their home without declaring a net rental income. I consider that a private decision subject to municipal bylaws. I am for a reduction of the principal residence capital gains exemption (PRCGE) to the same as the existing capital income inclusion rate currently at 50%. I suggest tightening rules with obtaining a PRCGE such as requiring the seller’s lawyer filing a certificate with land registry stating supporting facts regarding the PRCGE claim. Only licenced lawyers would be able to file the certificate. In my little Canadian world, 25% of the principal residence owner’s capital gain/loss would be subject to income tax rules.

It would give many the chance to fill up that pesky unused RRSP room.

#112 pBrasseur on 04.12.17 at 7:23 am

A capital gains tax on primary residence would be complicated to manage and very risky politically, I doubt very much it would be implemented for any case other than obvious speculation.

In general I would be surprised if any level of government in Canada did take measures to seriously slow housing, they are far more at ease at promoting RE than at killing it.

This bubble will collapse under its own weight, which if Garth’s interpretation is right should not be too far off. But the when is not that important anyway, as a buyer, seller, investor and general observer of the Canadian economy all you need to know is that it will happen, so don’t wait for the herd and prepare yourself accordingly while you can.

#113 Get Rid of CMHC on 04.12.17 at 7:29 am

Get Rid of CMHC and the problem will be solved. Interest will be adjusted to current market risk and housing prices would come down. No taxes no nothing just free and open markets. Its the bankers and others in the FIRE sector who hate the free and open markets since they would have to earn revenue in said free markets. they are enjoying their socialism for the rich CMHC. Why the government doesnt remove CMHC is telling how much these shysters are in thr pockets of the corporate Conservatives and Conservative lite (Liberals) who benefits the corporate elite and ensure they never have to earn revenue in free and open markets like everyone else. They are useless eaters. Anyone can make money lending or selling when its the taxpayers and not the free market taking the risk.

#114 pBrasseur on 04.12.17 at 7:44 am

#105 Jay – That’s rather my point. Most of Ontario isn’t Toronto, but this blunt instrument of a policy change will affect not just overheated Toronto, but north and Northwest Ontario

This point is valid for many other regions in the country as well.

The lesson here is that government and politicians should not be in the business of controlling the RE marker (or any market) and should not have intervened so forcefully to promote it (CMHC, renovation tax credits, etc..) in the first place.

They now have an impossible and very dangerous situation in front of them which they themselves contributed to create. No doubt of course whatever they do they will pose themselves as saviors and when/if shit happen it will be blamed on somebody else! And the worse part is that most will believe them…

#115 Grantmi on 04.12.17 at 7:59 am

https://www.google.ca/finance?q=TSE%3AHCG&ei=URXuWOHlJ4a4jAHIzbLgAQ

Home capital group continues to get hammered. New low yesterday.

“Ouchie Bro! Real Kick to the nads!”

#116 varano on 04.12.17 at 8:06 am

The people that are pitching this 12 year tax free nonsense live in a world of make believe.

Who stays in a home for 12 years anymore??

So if my wife and I decide that we want children and will naturally outgrow our 1 bedroom condo, Does that mean that we need to wait 12 years to have kids otherwise suffer the wrath of this BS tax?

Need I remind everyone that :
1)The interest rates are the simple solution here
and
2) We already pay a ridiculous amount of tax

The last thing this country deserves at a federal and provincial level is more tax dollars to flush down the crapper for JT’s Jet setting around the world. STOP trying to come up with all these fly by night new rules to slow down the market. If people are stupid, let a market correction happen like it has over and over and over. Stop holding peoples hands!

#117 maxx on 04.12.17 at 8:06 am

#2 Lulu on 04.11.17 at 6:16 pm

“…….I still believe the main culprit is the interest rates……..”

You are in company of a very large group.

All levels of government overwhelmingly resist even contemplating the possibility of higher rates, not because it might “hurt” industry or mortgage holders, but more precisely because it might compromise tax inflows.

Interest rates will remain low until it suits tptb to raise them, when an opportunity for greater tax collection manifests. Or a fiscal egghead has tripped over one.

http://www.bankofcanada.ca/publications/books-and-monographs/why-monetary-policy-matters/1-economy/

When it does happen, there will be no sympathy for borrowers. None. There never was. No wizard, nor kindly, generous protector who has borrowers backs. That’s a myth, a romantic illusion that gullible over-borrowers believe.

A steaming pile of social conditioning peppered with Frankenstats designed to accelerate tax inflows has been the game since about 2000, when housing became the target of increasingly low rates in order to create as large a buying public as possible. The game is and has been catalyzed by FIRE engines and disseminated incessantly and ad nauseam through junk msm to jockey euphoria beyond the stratosphere. The result being that far too many buyers have completely lost their marbles to re. Ca-ching!

We know that we now have an economy which is insufficiently diverse, a population that is not only not saving but carries unacceptable, nay, huge debt, enormous numbers of seniors who will be even more heavily dependent on social programs and armies of young people who cannot get traction. But rates still remain in the gutter.

Cheap trick. When the piper inevitably shows up (once again) amidst all of the debtor yowling and gnashing of teeth, the background symphony will resonate to a crescendo of “we warned you, we did warn you”.

#118 Kool Aid on 04.12.17 at 8:36 am

I do not want to pay capital gains tax on our principal residence.

I’ll let the kids in on the deed so when I go, no transfer is needed with established joint tenancy.

I simply don’t understand this government, the solution to every problem is a new tax!

Seriously, we’re developing tax fatigue syndrome.

Sadly taxation without representation has never been greater.

#119 cramar on 04.12.17 at 8:50 am

“Kesselman reflects the view that the tax on profits should be in excess of 50% for real estate occupied two years or less, declining to maybe 20% or so after a dozen years in the same place.”

Are the Wynn Libs totally insane? If they are even remotely considering this they must be, since added to the Hydro rates fiasco, they is politically in the coffin.

If someone lives in their house for 5 or more years and has to sell, that is not house speculation. To tax that is insane and total suicide for any gov’t.

#120 Pre-retiree on 04.12.17 at 8:54 am

@#116 maxx:

I am afraid I completely agree with your assessment. However, the Fed (US) is still committed to raising interest rates which will directly affect fixed mortgages here in Canada. So whether the BOC and others want it or not, the rates are coming up, with the consequences that we know…

#121 Wacky on 04.12.17 at 9:21 am

“Doe” are cute, about all I see while out hunting, lol!
No CMHC….smaller bubbles….

#122 traderJim on 04.12.17 at 9:27 am

#109 Statistics guy

Thank you for taking the time to provide us with excellent examples of the old ‘there are lies, damned lies, and statistics’ adage : )

#123 traderJim on 04.12.17 at 9:32 am

#109 postcript

Just because some people THINK their home is a financial asset does not make it so.

#124 Kool Aid on 04.12.17 at 9:46 am

#116-118-119

Good points. Bonds-Mortgage origination cost/risk is real.

Interst rate deductibility of mortgage interest is needed.

How are we on equal footing with others that have real rights of property procurement here and greater tax benefits back home.

Bonds rise Canadians suffer, that’s the equation? How do we insulate or protect Canadians from the inevitable.

The government agrees real property is an investment, fine, allow for interest-rate deductibility of mortgage rates for all, time to get interest rates up, contrary to popular belief, higher interest rates not taxes will have greater long term benefit.

Triple the TFSA limit & access to diversify Canadians RE equity to other assets, if we’re going to take on all this risk, why not diversified risk.

Help Canadians, help themselves.

#125 Vit on 04.12.17 at 10:16 am

Bottom line the majority (people and government ) are benefiting from rising home prices . We just got lucky in a way so lets just use it in our advantage . Lets talk about how to benefit from it and not how to kill it .

#126 Pauly on 04.12.17 at 10:25 am

A see an effective tax strategy to avoid any flipper speculator tax: buy real estate through an incorporated entity and when selling don’t sell the real estate but shares in the corporation. No tax no problem. The fact that governments don’t realize this easy loophole shows the glaring hole in the current intellectual process.

#127 JD on 04.12.17 at 10:28 am

All that is posted have so much logic and reasons, but the fact remains, SOLD signs in Richmond, BC is all over again and prices for a single house are stratospheric.
cool it with a tsunami of cold water and bring 50% of correction price in the short term will be still stratospheric! Perhaps this is my subjective opinion, but I think of myself as an average citizen with average income who will not be able to buy a house in Richmond. My question to the wisdom folks here:
1) What is so special about Richmond, Vancouver or any places near by?
2) What shall an educated citizen do to make enough income to leave in this places?
3) Will it ever be possible to buy a single house or decent enough house for 4 ppl in Richmond or Vancouver and if yes when 10 to 20 years from now?
Many thanks for the constructive inputs.
PS: To clarify, we are tied down to this areas for the reason of being part of small ethnical group happen to leave in tiny pockets of these cities, which is the source of our social well being.

#128 };-) aka Devil's Advocate on 04.12.17 at 10:29 am

The markets can stay irrational longer than you can stay solvent.

#129 };-) aka Devil's Advocate on 04.12.17 at 10:40 am

The socio-economic-political paradigm we adhere to is obsolete. A capital gains tax on one’s principle residence will only make it clear that our political leaders don’t know what the ______ they are doing and grasping at straws, not to stop the bleeding, but rather to create more blood with which to feed the out of control monster.

#130 Sonny on 04.12.17 at 10:45 am

BoC signals earlier rate hike, upgrades growth forecast

http://www.theglobeandmail.com/report-on-business/economy/boc/article34679074/

As predicted. Those fools who come here to proclaim rates will never rise, or only after a decade, are in for a surprise. — Garth

#131 TurnerNation on 04.12.17 at 10:45 am

Blog dog Poloz says Party On! Uppa up till 2018 at least.

But Kommunism is coming to Kanada. Government mandated rent ceilings. Higher minimum wage – for lazy entitled Millennials.

More taxes upon taxes. Why should we the tax slaves keep any of our wage?

And laws upon laws. If there’s reincarnation I hope to return as a minority disabled non binary person..
Government rewards shall await!

#132 Poloz has no balls on 04.12.17 at 10:55 am

another bad decision keeping the rates low

#133 Ponzius Pilatus on 04.12.17 at 11:04 am

#130 TurnerNation on 04.12.17 at 10:45 am
Blog dog Poloz says Party On! Uppa up till 2018 at least.

But Kommunism is coming to Kanada. Government mandated rent ceilings. Higher minimum wage – for lazy entitled Millennials.

More taxes upon taxes. Why should we the tax slaves keep any of our wage?

And laws upon laws. If there’s reincarnation I hope to return as a minority disabled non binary person..
Government rewards shall await!
—————–
Be careful what you wish for.
Taking the bus in a wheelchair is a bitch.

#134 Lee on 04.12.17 at 11:12 am

Is Kesselman suggesting the tax should be 50% of profits made within two years or that 50% of those profits should be included in taxable income? Anyone?

#135 mike from mtl on 04.12.17 at 11:13 am

As predicted. Those fools who come here to proclaim rates will never rise, or only after a decade, are in for a surprise. — Garth

//////////////////////////////////////////////////

I’ll believe it when I see it. And no +0.25 is nothing to worry about. Adding .25 every year is also not a big worry. Once we’re at >1.00 then it gets interesting.

Where’s the betting pool?

#136 IHCTD9 on 04.12.17 at 11:20 am

Tax appt. netted a healthy 5 figure return this year. Our efforts to disenable the blockheads running this country are working out great so far.

I saved a ton more by purchasing used (but like new) just about every time I could. I also recently repaired approx. $1000.00 worth of damaged equipment instead of heaving and buying new. Taxes paid via the above activities = $0.00

I estimate I paid about 6-7K less in taxes across the board for 2016 compared to 2015. Actual dollars saved from leaving my pocket were probably near double that.

2017 will see the sale of the balance of my “collectables” which should net 10K+, and two good sized building projects this summer. Labour by myself and the kids, built with tax free new and surplus Kijiji materials. Also big savings in insurance costs on deck. Every dollar I don’t spend saves me the dollar itself, and the 13% taxes thereof. My consumption habits have changed big time, the reductions are huge, the savings are huge, the tax reductions are huge.

2017 will also see the initial steps foraying into diy fuels for heat, hydro, and transportation. Gas jumped north of 1.20 here yesterday – I can’t wait to hit the shop!

#137 jess on 04.12.17 at 11:20 am

It was news of strikes and lynchings, riots, murder cases, graft prosecutions, sensational divorces, the bizarre extravagance of “sudden millionaires.” Naturally enough, we were looked upon as a race of dollar-mad materialists, a land of cruel monopolists, our real rulers the corporations and our democracy a “fake.”

Winning hearts and minds

George Creel

How we advertised America; the first telling of the amazing story of the Committee on public information that carried the gospel of Americanism to every corner of the globe”

https://archive.org/stream/howweadvertameri00creerich/howweadvertameri00creerich_djvu.txt

#138 Econsensus on 04.12.17 at 11:21 am

#99 Fortune500 on 04.12.17 at 12:59 am
I’ve said it before, I don’t see why primary residences should be exempt from capital gains.

—————————————

Unfortunately, our political leadership are morally bankrupt and their only concern is inhibiting the onset the economic pain while they are in office. I am disgusted by the sense of entitlement that many home owners as well as others who are the ‘beneficiaries’ of unsustainable economic policies. Future generations will judge us harshly and rightfully as the era that stole from them.

#139 Paul on 04.12.17 at 11:21 am

Just listening to Wilkins speaking on the economy and bank rate. Fills me with confidence. NOT

#140 westcdn on 04.12.17 at 11:28 am

I am getting ready to file my income tax return. I used to do my daughter’s tax returns and I have a tax tip for the younger tax payers. I would get them to make a RRSP contribution but I would not claim the contribution on their returns as their taxable incomes were minimal.

They still could choose an investment vehicle within the RRSP. I then filed an unclaimed RRSP contribution on their schedule 7 as a carryforward.

The idea was to save the contributions until they got into a higher tax bracket or wanted to withdraw the funds tax free. Meanwhile, the contributions would accumulate tax deferred income. I believe the RRSP contribution carryforward has no time limit till death. It comes in handy for promotions or windfall overtime hours. I never did it for myself as I was always in a DB pension plan and had several “windfalls”.

#141 Eks dee Sipal on 04.12.17 at 11:32 am

#112 Get Rid of CMHC… Of course. And this serves as a point of study into the real source of economic problems. It’s very simple and most obvious: the banking cartel is a parasite on real economic progress. To rip off this parasite would mean the death of modern economic theory, but that is something that will happen eventually anyway. Blockchain cometh…

#142 IHCTD9 on 04.12.17 at 11:35 am

#126 JD on 04.12.17 at 10:28 am

Vancouver and if yes when 10 to 20 years from now?
Many thanks for the constructive inputs.

PS: To clarify, we are tied down to this areas for the reason of being part of small ethnical group happen to leave in tiny pockets of these cities, which is the source of our social well being.
_________________________________________

If you live in an ethnic enclave and want to stay living in one for the benefits it provides you, then no you will never own a house in your lifetime.

All the major enclaves in Canada are located in big cities where houses are priced at 1+ million dollars.

You are going to have to choose to either move out of the enclaves in favour of a much smaller city, or rent for life.

You might have some luck trying Montreal, that’s probably about the only place where you can live in an enclave and buy a reasonably priced house. (There are reasons for that though…)

#143 blortinYEG on 04.12.17 at 11:37 am

If the bubble bursts and capital gains policies have been previously put in place, will the governments suffer large tax losses from capital loss claims?

#144 Braj on 04.12.17 at 11:41 am

#42 Vit on 04.11.17 at 8:19 pm
Correct me if Im wrong . The new rent control rules will make max price to rent a 2 bedroom condo around $1500 . That what is the rent in a old buildings on a Yang street . So instead of getting $2500 a month investor will have – minus $-1000. Plus he had already negative cash flow with a new rules its a killer . I see lots of condos cumming on the market and were all does $$$$ going to go ? My guess it will go to detached housing sector and its mean only one thing prices will keep going up …

Don’t embarrass yourself. Doubt there’s more than 50 neurons you’re stringing together in your repetitive rhetoric.

#145 TurnerNation on 04.12.17 at 11:42 am

#132 Ponzius in some countries beggars mutilate their own bodies to garner sympathy. Would we be different. ..

Making the leap from Shine your shoes sir? To – Spare some alms?

#146 Eks dee Sipal on 04.12.17 at 11:53 am

Blueprint for a New Economy. By Xdisciple. Written excusively for GreaterFool.ca

Part 1: Brief history of Economics.

Economic progress among a group of self-determinate people (city, state, nation) depends on start-up capital to be employed in manufacturing, trade and innovation and further investment. Traditionally, this has been provided by consortiums (private families outside of these self-determinate groups) who have reserves of mobile wealth ready for investment. These reserves of mobile wealth include control of agricultural production, mines, natural resources, transportation routes, weapons caches and currency. Most notably these families reside amongst and within aristocratic nobility, some of whom proclaim themselves publicly as Royalty, and most of whom prefer not to be in the spotlight and operate behind the scenes, and have done so since before recorded history. I know not one of you will be able to accept this but human civilization is millions of years old. And no, it did not begin 6000 years ago, and no, humans never lived in caves. I will not expand upon this at the moment since you are not ready for the truth.

(coming up… Part 2: Rise of Government)

#147 paulo on 04.12.17 at 11:59 am

How about this:

1) Owner Occupied residential: once in a life time Cap
GainExemption on Profit from sale, only after 5
Consecutive years residing therein, excepting special
circumstance hardship,divorce,death of spouse etc.

2) Localized residential Mortgage interest surcharge,
Lets Call it a economic risk premium 1.0 to 1.5%
in addition to base mortgage rate, Applied to all
mortgages in southern Ontario and parts of BC

3) In Ontario Remove the age limit on residential rent
controls so all are covered

4) In BC close that ridiculous loop hole in your rent
controls permitting “move out” clauses in residential
This should have been a no brainier for the clueless
politicos out there,and much more effective than the
Chinese dudes tax in creating and maintaining
affordable housing.

5) Non Citizen and Corporate IE numbered companies
purchasing residential real estate should be required
register there interest with the CRA at time of
purchase, be classed as commercial for profit
and be required to post a bond with the CRA at the
time of sale equal to 50% of the Profit realized
pending filing a tax return

6 CHMC Institute a local risk deductible say the first
30% of the value of the mortgage in again southern
Ontario and parts of BC ie Identified “bubble” markets
This would address the quality of mortgage
underwriting,forcing banks to think twice before they
advance funds to people whom likely cant afford to
realistically repay.

7) Reduce HELOC limits from the current 65% of
Appraised value to 45% the concept of granting a
mortgage at the outer limits, than advancing funds
that in many cases now are being used to cover
living expenses while the purchaser is playing the
spec/flip game is only adding to the problem.

#148 A Reply to #122 traderJim on 04.12.17 at 12:03 pm

I never said or wrote that a house is a financial asset; it isn’t. (It’s a tangible capital asset, if you must know.)

#149 The Smaller Fool TM on 04.12.17 at 12:08 pm

Don’t know about 10 years, but I was one of those fools who predicted back in February that the Fed won’t hike 3 more times this year, but more likely once or, at most, twice more. Three hikes were already baked in, so rates not raising for that reason even if they hike again. At the moment pulling back.

#150 James on 04.12.17 at 12:26 pm

#71 Magnetic Smoked Alien on 04.11.17 at 10:21 pm

#57 Sneadly Tinkelton on 04.11.17 at 9:22 pm

A long time ago Smokey posted something about re adjusting your brain waves using 2 two inch magnets . Place one on each temple make sure the force is pushing them away from each other. He claimed that it gives you a clearer connection to the UCC.

I tried it tonight. Got a feeling peak real estate is 2019. How can this be posable.

Where is he?

..
How’s life in Ecuador? No way you could stay away from here LOL
………………………………………………………………………
Sneadly Tinkelton = Smoking Man
The spelling mistakes always give you away.

You told us two weeks ago you were listing.
So did the Shlongbranch Mansion sell at $1.1M. Enquiringly minds want to know.

#151 M on 04.12.17 at 12:28 pm

” The more unevenly tax is applied, the greater the economic distortions which result. And, yes, it would be the kiss of death for real estate speculation.”

..the real estate speculators will do fine at the bottom. The ones that saw it coming, got out early (or earlier) and STAYED in cash.

East European experience shows that the socialism (which is currently built in Canada since mid 90s) is the best for getting rich quickly exactly due to the uniformity (and unavoidability) of mass propagating economic decisions.

What is happening for a year or two and in the next 3-4 years represents a golden opportunity for “value” oriented investors (i.e. the ones that really see that if TESLA sells for 300 it DOESN’T mean that is WORTH 300 ).

These people will do very very very well.

Cheers

#152 Northwind on 04.12.17 at 12:43 pm

You won’t believe that just a few days ago, facing with the rampant real estate speculation in this country, Mr. Poloz said it was not related to his low interest monetary policy. I can not see any ability to make sound judgement from what he said and what he did in the past. He is either dishonest or completely out of touch with the reality.

If you look back, everything Mr Poloz did since he become the governor is counterproductive – he is somehow obsessed with the idea to debase Canadian dollar to 60s cents USD to boost export, ignoring the actual economic reality and huge side effects of this reckless money debasing.

#153 TurnerNation on 04.12.17 at 12:51 pm

Explains lots. At any given time 5% (or greater) of Canadian population is baked out of their gourds:

http://www.cbc.ca/news/canada/toronto/roadside-drug-tests-toronto-police-1.406578

#154 Samantha on 04.12.17 at 12:52 pm

You are not a leftie, but you call for more taxation?

In the US they can deduct mortgage interest on their personal taxes, can you do that in Canada? I didn’t think so…

#11 Post on 04.11.17 at 6:45 pm

Sounds good to me. And, I’m hardly a leftie like you call it.

Capital gains on real estate is taxable in the US…

#155 Grantmi on 04.12.17 at 1:03 pm

Explains lots. At any given time 5% (or greater) of Canadian population is baked out of their gourds:

That’s why I’m in HMMJ.to. Nothing but growth going forward. lol

#156 Ole Doberman on 04.12.17 at 1:08 pm

Looks like rates are going up sooner rather than later:

http://www.bnn.ca/pattie-lovett-reid-consumers-are-headed-for-trouble-when-not-if-rates-rise-1.722308

However would this really solve the debt problem on mortgages?

500k house at 2.5%

or

250K house at 5%

The monthly payment would be the same – can anyone address the problem here?

#157 NoName on 04.12.17 at 1:21 pm

#140 Eks dee Sipal on 04.12.17 at 11:32 am

I don’t know how will blinkchain fix this.

“It’s the same problem that preceded economic crises in Greece, Mexico, Spain and Italy, and may have been discounted in Canada’s case because the country’s income has increased during the same period. Ignoring the stagnation would be a mistake, Pujolas says.”

http://dailynews.mcmaster.ca/article/improving-canadas-stagnated-productivity-problem/

#158 MarketPundit on 04.12.17 at 1:27 pm

If Anyone still wonder where and/or how some folks get financning to speculate in this Crazy RE market here is a promo I got from one of the private lenders.

LENDING CRITERIA

*Over 15 years experience in Private Lending
*Servicing all across Ontario
* Up to 80% LTV on residential.
* Up to 75% LTV on commercial
* First mortgages start 6.99%
* Second mortgages start at 9.99%
* Lender fees start at 2%
* No income/employment verification
* No GDS/TDS
* No appraisal on low LTV’s
* Same day commitments
* No pre-payment penalty options available
* 3-6-9-12 month terms Interest only
* Funding in 3-5 business days
* No minimum loan amount No maximum loan amount

#159 Silver Spoon Ponzi Poloz on 04.12.17 at 1:57 pm

What a great life. Hooked up with a great paying job where you have to ignore the economic realities and pander to vested interests. Once you are done you will get hooked up with fake position like tim hudak (ceo)or sit on the board of companies like mike Harris. What a great club to be in.All you have to do is screw over the country for the benefit of a select few. Lucky silver spoon #$#@#er

#160 jess on 04.12.17 at 1:59 pm

#13 Keith in Calgary on 04.11.17 at 6:48 pm

re Brazil:

A new report from Transparency International has revealed that more than US$2.7 billion worth of property in Sao Paulo, Brazil’s biggest city, is hidden behind shell companies, many of which have close links to the United Kingdom, which has many offshore tax havens in its overseas dependencies.

Using newly released public data, the report — Sao Paulo: Does corruption live next door? — identifies thousands of high-end properties that are owned through 236 companies registered in secrecy jurisdictions and tax havens, including in the British Virgin Islands.

NEW REPORT: $2.7 billion worth of real estate in São Paulo linked to secret companies that #corrupt can hide behind https://t.co/eTmrsxSPEf
— Transparency Int’l (@anticorruption) 10 April 2017

#161 No action Will be taken on 04.12.17 at 2:21 pm

The way those shysters are talking they will not take action. Sousa , Kathleen and or Tory will help with affordability by given tax breaks ,tax frre loans or other schemes instead of actually fixing the problem. They are in the pockets of FIRE section. Canada is nothing but a ponzi scheme now. Good job you silver spoon morons.

#162 bittermillenial on 04.12.17 at 2:28 pm

I think it is a bit early to call the market done. But i’m hoping for a dip in prices. Garth, is a freeze in price gain for a few months all it takes for us to call it a correction?

#163 For those about to flop... on 04.12.17 at 2:33 pm

My United flight is overbooked!

I’m gonna sacrifice my wife.

Every man for himself…

M42BC

https://imgur.com/a/uAlfb

#164 Blacksheep on 04.12.17 at 3:03 pm

All the dogs offering systemic ‘solutions’ for the crazy RE prices are not seeing the big picture.

Do you actually believe any politico wants a significant price correction, on their watch?

Do you believe the reduction in Oil, Forestry, Fisheries and Manufacturing has had no economic impact on the citizenry and governments of Canada? Do you believe the system has an alternative wealth generator waiting in the wings, able to stoke the economic fires in Canada, the way elevated RE prices have? Do you believe politian’s want to restrict wealthy immigrants from coming to Canada?

Do you believe if RE corrected 40 + % everything will be just fine and that we would not experience a severe recession, just like the US did?

Do you believe your employment to be 100% secure, in such harsh recessionary conditions ?

Do you think your bank is going to be eager to lend into a declining market, with out substantial $’s down, killer credit and long term employment? Do you believe that Cristy baby is giving the herd anything more than lip service, (wink,wink) and does not enjoy the massive taxes generated on all things RE related in Vancouver?

I realised about 3.5 years ago, fundamentals meant nothing in an economy systemically manipulated by those primarly concerned with their own, political survival.

As always, the rule of Demand VS Supply applies to RE so things can shift to a standard RE correction, like many have lived through.

Just don’t kid yourself as to the systems agenda, it operates to protect itself, not you. The best you can do is align your wants, with theirs and go along for the ride….

#165 Entrepreneur on 04.12.17 at 3:34 pm

Yup, the high prices of buying or owing a home/house is indeed far exceeds the family budget. And Kristy with her election ads mentions about helping the middle class. Oh, how ironic is that.

Omg, I would say Kristy had a chance to help the middle class a long time ago, too late so sad Liberal party are not doing their job.

#166 James on 04.12.17 at 3:57 pm

Simple. You flip, you pay. If you live in a house and reno it to sell, you pay. If you’re a temporary owner, like Jeremy, you pay. Kesselman reflects the view that the tax on profits should be in excess of 50% for real estate occupied two years or less, declining to maybe 20% or so after a dozen years in the same place.
…………………………………………………………………….
So what is wrong with this? Flippers are there to make money. It is as plain as the face on that little girl in the photo.

#167 jess on 04.12.17 at 4:02 pm

Argument for taxing pot too high too low ?

transfer pricing

Tax Justice Network Australia Jason Ward:
The Senate Inquiry into Corporate Tax Avoidance has also been extended to look specifically at tax avoidance in the offshore oil and gas industry and a public hearing is scheduled for the end of April.

….”Chevron, the largest owner of LNG, was already labelled as Australia’s largest tax dodger in previous hearings of the Senate Inquiry. The Australian Tax Office (ATO) took Chevron to the federal court and won a landmark case on the transfer pricing of money. The case involves high interest related party loans between subsidiaries in Australia and Delaware, and will set an important legal precedent with global implications. A current and much larger loan is also under audit by the ATO. This hybrid loan could reduce tax revenue in Australia by $15 billion and creates tax free interest payments in Delaware.”
http://www.taxjustice.net/2017/04/11/australian-beer-drinker-tax-vs-worlds-biggest-gas-companies/

April 11, 2017 Taxing corporations LNG
Commonwealth royalty based regime
https://mckellinstitute.org.au/app/uploads/McKell_Harnessing-the-Boom_WEB_0417.pdf

“Is it fair that Australians pay more tax on one beer than the oil and gas industry pays in petroleum tax on offshore gas in a year? Might a 10% royalty guaranteeing annual revenue of between $1.3 billion and $2.8 billion be a better way to go? These are the issues rightly raised by a report just out by the McKell Institute called ‘Harnessing the Boom.’ It was written by Richard Holden, a Professor of Economics at UNSW Business School.

#168 Londoner on 04.12.17 at 4:27 pm

#156 MarketPundit on 04.12.17 at 1:27 pm

I told you guys that private lenders are driving the shadow mortgage market in Canada and this will be the leading indicator of Canada’s sub-prime crisis. This is a totally unregulated market between private corporations and individuals. Start to worry when you stop getting those flyers as that’s when you know the liquidity has dried up.

#169 Monetary Policy Report on 04.12.17 at 4:28 pm

Here is the Bank of Canada’s latest Monetary Policy Report released today (April 12, 2017):

http://www.bankofcanada.ca/wp-content/uploads/2017/04/mpr-2017-04-12.pdf

#170 Londoner on 04.12.17 at 4:41 pm

“As predicted. Those fools who come here to proclaim rates will never rise, or only after a decade, are in for a surprise. — Garth”

I actually I said decades, but seeing as we’re almost 10 years in from the start I guess that’s acceptable. Poloz said that the housing gasbag is adding to Canada’s economic growth but that’s unsustainable. So what happens when the housing market starts to rollover, consumer spending drops, trade deficit widens and unemployment rises? There’s no chance that the BoC will start hiking into a recessionary environment.
Poloz also said a rate cut was off the table for this decision but that doesn’t mean anything. He may have been saying that to counter criticism of his forward guidance, which many bank economists have stated is leading to excessive borrowing. The reality is that the loonie is too high and Poloz still foresees many economic headwinds. And when the Fed starts to talk down the dollar the BoC will follow suit.

#171 Cagey Bee on 04.12.17 at 5:09 pm

@#18 crowdedelevatorfartz

I remember fishing trips near Kenora when I was a kid. The memory of being afraid to touch the cabin screen door because it was COVERED in fish flies is burned in my brain forever. Never again!

#172 maxx on 04.12.17 at 5:43 pm

#119 Pre-retiree on 04.12.17 at 8:54 am

@#116 maxx:

“I am afraid I completely agree with your assessment. However, the Fed (US) is still committed to raising interest rates which will directly affect fixed mortgages here in Canada. So whether the BOC and others want it or not, the rates are coming up, with the consequences that we know…”

Gee, I hope it comes to pass PR- anything else is an exercise in passing the proverbial buck. Go rates!!!

#173 Write to T2 , Sousa , Kathleen on 04.12.17 at 5:52 pm

Complaining here can be fun but write to these shysters and tell them how to fix it. CMHC is the problem

#174 maxx on 04.12.17 at 8:01 pm

#26 BMC on 04.11.17 at 7:34 pm

“Anyone who advocates for more taxation is a fool, what we need is better governance”

Perhaps by way of an independent ratings agency, with very large incisors and e-tentacles everywhere, just like the ones that routinely analyze corporations up the yin yang.

If government insists on private sector pay levels, raises, bonuses and perks, it should also, by extension be subject to identical corporate-style performance scrutiny.

If a government sector is assessed as having failed to deliver the goods to the Canadian public, perhaps taxes could collectively drop by way of appropriate software until performance improves. A reflection of share value, if you will.

That ought to knock a whack of waste out of the system and put under-performers on notice, thereby inevitably creating openings for those who truly want to produce results and aren’t afraid of performance reviews.

Private sector patterning is fine, so long as it is not a skewed, mutation of the “heads I win and tails you lose” variety.

Such changes could be a superlative boost to the current “middling class”.

#175 OffshoreObserver on 04.13.17 at 9:25 am

I guess all the workers with “guaranteed” pensions will be forced to liquidate–what’s next?–their houses.

http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/OTB_Apr_12_2017.pdf

BTW, am now in Panama City, Panama. Had to ditch the Vietnamese GF at YVR–42 days of telling me that every baby we passed was “your son…your daughter…” was driving me crazy. Then she told me to stop tipping: “All Canadians are rich. They don’t need you to pay them…: she went back to Vietnam via Hong Kong. I made a left turn at the gate and boarded Aeromexico for where I am now via Mexico City. Next stop is Ecuador!

#176 OffshoreObserver on 04.13.17 at 10:12 am

Ditto: https://youtu.be/A3htnbwFgoM