Americans have a constitutional right to own property. Canadians? Meh. Not so much. You just have to hope for the best – that the province won’t expropriate for a road, the city won’t zone a group home next door, the conservation authority won’t prevent you from landscaping, or the mayor won’t decide you’re not home enough.
As real estate prices grow more insane in our bubble markets, politicians are hot to further abrogate private property rights – which you don’t actually have (and they know it). An empty condo, for example, that you plan to retire into next year. Or a property used for business part of the time. A secondary home in a city where you winter. Real estate you bought, paid for and shell out property taxes on. All that is now in the crosshairs in Vancouver, and may soon be in Toronto.
YVRers have been receiving these brochures in the mail – the latest news on an ugly little tax about to be slapped on thousands of unsuspecting property owners who have done nothing wrong. The tax is ginormous – 1% annually of assessed value, which is $14,700 on the average detached house, or $1,230 per month. This is on top of normal property tax of about $5,500.
The Empty House Tax, now in BC and soon in Toronto (says mayor John Tory, who used to be a conservative), doesn’t just spank foreign owners who snap up properties as long-term investments then leave them to the weeds and the mice. There actually aren’t many of those dudes. Instead, it’s intended to economically censure wealthy people as it’s now socially unacceptable to have two homes when some poor moister couple can’t afford any. There’s no evidence the EHT will increase housing stock, put more rentals on the market, or do diddly about the speculation that’s driven prices skyward. It’s just political. It’s something, when leaders have been accused of doing nothing.
How does this work?
Vancouver is the model for the Toronto tax now being crafted. A secondary family home – maybe a condo you bought for your daughter to attend school – which is not regularly occupied, or rented to a tenant for at least six months, will be taxed. To prove otherwise, an audit will require government-issued ID showing that address, or a tax return.
A secondary home, used periodically by the owner, or family members or guests which is not fully occupied for half the year, or rented out for an equal period, will be taxed. So, if you live in Toronto and spend the winter in Vancouver in a condo which is then largely vacant for seven or eight months, you pay. Even if you worked in Van for six months of the year and needed a pad – cheaper than taking a hotel – you pay the tax. Only exempt would be someone needing a place because they have a full-time job in that city.
If you own a condo which is on the rental market and you can’t find a decent tenant, after six months you will be taxed. “Therefore,” says the city, “owners are encouraged to reduce the asking rental cost until the unit is rented, as they will not be exempt from the tax on the basis of being unable to find a tenant.” Ditto for selling a property. If the housing market slows (as in YVR now) and you cannot find a buyer willing to pay your price – after 180 days, it will be taxed.
Is this fair? Just? Equitable? What purpose is served through the arbitrary imposition of an extra new levy on people, simply because they own property?
Beats me. But John Tory likes it. “I am open to exploring whether this would be the right measure for Toronto,” he told reporters this week, which is political code for lift-off. Of course, this is the same guy who wanted to make the main artery into the city from the burbs a toll road (shot down by the premier), so he’s desperate for revenue.
In fact, Toronto has already started the witch hunt. Officials have been instructed to study electricity and water usage data to ascertain the number of lightly-used properties in the city – wildly estimated to be about 65,000 (at least a third of which are newly-built condos). Tory has asked these bureaucrats for a report on the feasibility of a GTA vacancy tax.
Meanwhile, we’re four weeks away from the province imposing its own market-dousing agenda as politicians react to a 30% surge in average prices, caused largely by speculative fever and house-lusty hormones. The budget seems likely to bring a tax on speculation and flipping plus (maybe) a foreign buyer whack.
Just listen to what Treasurer Charles Sousa had to say a day or two ago: “There are individuals that are going into subdivisions that are buying 10, 40, 50 homes – holding paper – and flipping it … and they’re crowding out families who are trying to buy.”
Yeah, we know where that’s headed. Even if it’s true.
Have you listed yet?
221 comments ↓
#154 crowdedelevatorfartz
If you think I was hating on honest hardworking private business people you completely missed the point I was making about generalizing like you were… by generalizing *eye roll*
I’m getting into long term kaputs for Genworth – MIC.TO.
It too might get hit by sub-prime slime.
The City of Toronto is a very backward place if you are a successful person.
Poloz is not successful man because he wants to drag us down with a 50-cent Loonie while his friend Morneau wants us to work for free.
Don’t forget that Trudeau is a Liberal-Feminist, but he is reluctant to legalize pot because he sounds like an elitist rather than a Hippie.
http://www.returnofkings.com/63918/why-emigrating-to-toronto-is-a-bad-choice-for-successful-and-ambitious-men
For your reading pleasure why Toronto is not the place to invest for successful people like Marc Cohodes who is betting against Canadian housing market.
The borrowing and spending binge by Canadian households, businesses and governments (all levels) continues unabated. Growing the debt in the economy significantly faster than the economy itself grows seems to have developed into a way of life in Canada.
At the end of December, 2016 the total debt outstanding in Canada (bottom line of the Statistics Canada credit market summary data table) was $7.29 trillion. At the end of December, 2015 the total debt outstanding was $6.98 trillion. In the one year period from the end of December, 2015 to the end of December, 2016 it increased by $309 billion. This is an increase of 4.4%.
The approximate beginning of the global financial crisis was June, 2007. At the end of June, 2007 the total debt outstanding was $3.99 trillion. In the last 9-1/2 years it has increased by $3.3 trillion. This is an increase of 82.8%.
Looking at the total debt outstanding of domestic non-financial sectors in Canada (17th line up from the bottom of the credit market summary data table):
At the end of December, 2016 the total debt outstanding of domestic non-financial sectors was $5.15 trillion. At the end of December, 2015 the total debt outstanding of domestic non-financial sectors was $4.93 trillion. In the one year period from the end of December, 2015 to the end of December, 2016 it increased by $215 billion. This is an increase of 4.3%.
At the end of June, 2007 the total debt outstanding of domestic non-financial sectors was $2.84 trillion. In the last 9-1/2 years it has increased by $2.3 trillion. This is an increase of 81%.
The start date of this Statistics Canada data table can be changed by clicking on the “add/remove data” tab.
Canadian annual gdp at the present time is $2.06 trillion.
In the 1 year period from the end of December, 2015 to the end of December, 2016 (calendar year 2016) the Canadian economy grew by 1.4% – ie: the size of the economy grew by $28.9 billion.
In this same 1 year time frame the total debt outstanding in Canada grew by $309 billion. For each $1.00 the economy grew in this 1 year period the total debt outstanding increased by $10.69.
Looking at just the total debt outstanding of domestic non-financial sectors in Canada. In the 1 year period from the end of December, 2015 to the end of December, 2016 the total debt outstanding of domestic non-financial sectors increased by $215 billion. For each $1.00 the economy grew in this 1 year period the total debt outstanding of domestic non-financial sectors increased by $7.43.
At the end of December, 2016 the total debt outstanding in Canada was 3.5 times greater than our annual gdp, and looking at just the total debt outstanding of domestic non-financial sectors, that was 2.5 times greater than our annual gdp.
They’ve imposed the same tax in Tel-Aviv, Israel (maybe in other places too, I dunno). Didn’t help. The prices in TA are actually much higher than in TO and keep going up.
The only thing worse than the problems we get from government meddling is the solutions the government proposes to the original problems they created. Or something like that.
Areas in South Eastern BC have been doing something similar to Alberta cottage owners for years, but not nearly so dramatically.
THE LOCAL BOARD: “DEMAND LIKELY TO CONTINUE IN 2017” (January 3, 2017)
As I recently wrote, February sales of detached homes were down 25% year-over-year across Greater Victoria. Which makes the local board’s prediction way off. (January sales were down 18% y/y).
FEBRUARY: DETACHED SALES 13% BELOW VICTORIA’S LONG-TERM AVERAGE
2007 was an average year for sales of detached homes in Victoria.
Sales in February were 13% below February 2007’s sales total, without even accounting for the 10 years of population growth (which would have made that number look significantly worse).
It’s at least somewhat misleading on the part of the local board to compare sales in 2017 to Victoria’s 10-year average without first mentioning that the 10-year average includes the THREE SLOWEST SALES YEARS dating back to 1984.
2012: lowest detached home sales total since 1984
2013: second lowest detached sales total since 1984
2011: third lowest detached sales total since 1984
(Adjusted for population to create an apples to apples comparison.)
THE LOCAL BOARD’S EXCUSE FOR FEBRUARY’S SALES SLOWDOWN:
“Snow.”
Absolutely pathetic.
As I mentioned, detached sales in January were down 18% year-over-year and VICTORIA HAD VERY LITTLE SNOW THAT MONTH.
So, what’s their excuse for January’s sales decline? Too much moss?
VICTORIA’S MARKET CORRECTION PROCESS IS SOLIDLY IN PLACE
Victoria’s market correction process began after April (approximately) of last year as sales of detached homes began declining. Clearly Victoria is following Vancouver’s lead.
This process begins with falling sales and ends with a deep price decline.
Low inventory levels are often seen in housing bubbles that have reached (or are about to reach) peak price levels. It is part of the way things play out as housing bubbles prepare to deflate.
As has been the case with plenty of housing bubbles in many countries over a number of decades, abnormally low levels of inventory can suddenly change to abnormally high levels of inventory within a matter of months, even as sales continue to fall. This creates the conditions for falling prices.
As housing bubbles deflate, prices always fall back to their long term mean (and often overcorrect). This often brings prices back to the level at which the bubble began to inflate (there are many examples of this).
I want to visit the Belfountain General this spring.
Do you have facilities for my cat?
Sounds like if your not a wealthy Canadian now you never will be. Tax after tax after tax.
Western World debt will never be re-paid without significant social unrest.
http://www.cnbc.com/2017/03/30/debt-and-deficits-are-going-to-explode-in-the-next-30-years-cbo-says.html
An Empty Homes Tax…….
Wow!
And just before a provincial election no less……
Sounds more like a hidden tax for the amateur Airbnb landlords whom almost certainly don’t report anything.
The funny thing is the city is sending the brochures around to empty houses…….kind of defeats the purpose doesn’t it :)
Gee, wasn’t it governments leaving interest rates near zero that has created this bubble and now they have the nerve to set new taxes to make them look good to the masses?
Hey Garth, your store isn’t open 12 months a year is it?
Maybe next they will impose a fine on you for not being open during the winter when the masses want an ice cream cone during a snow storm on Jan 15th. Also, what gives with not employing people year round and sending in your share of taxes?
Did you say your in business to make a PROFIT? That’s not fair.
Idiots.
#76 Smoking Man on 03.29.17 at 10:20 pm
Done. Bought the book today. You were the only one on this blog who predicted the Trump win. Now I am going to learn how you really knew!
I’ve read the blog for months now, and reading between the lines, it’s pretty easy to see that the author is someone who will be negatively impacted by this coming to Toronto.
Sorry, but I say too bad, so sad.
I make a very good income, but having only lived in YVR since last summer, there’s no way I can afford a home for me and my family unless I go up to my eyeballs in debt. The prices are insane, and the amount of places that I see every day that have not had any lights on since I’ve lived here would certainly lead me to believe that this empty home tax is necessary. These aren’t places being used as a vacation condo, they are sitting empty and are just purchased out of greed. 20% sitting vacant would be a realistic estimate for the neighbourhood I live in.
Any additional fork that can be stuck in this market is most welcome.
Her Majesty owns every square inch of Canada (which Garth Turner, as a former Minister of the crown, should know). She graciously grants you a lease, known as a deed, typically , but not always , in perpetuity. It is yours to sell trade or pass on to your heirs. Should any of her duly elected or appointed entities have need of it however, they can and will take it back, using the legal tool known as expropriation
This piece of news is a bomb shell and explains the lack of houses on the market. 65000 houses taken out of the market has not only inflated housing prices but also inflated rents. These houses have to be taxed heavily. If these houses are put back on the market either for sale or for rent then housing prices and rents will fall back down to reality. If 65000 number is true and not a typo then you and other politicians who work for the PEOPLE and not vested interests have the opportunity to correct this injustice . 65000 houses not i use must have either a criminal or foreign element.
http://www.cbc.ca/beta/news/canada/toronto/will-taxing-toronto-s-65k-vacant-homes-help-affordability-mayor-john-tory-wants-to-know-1.4048197
THE VICTORIA R/E BOARD – A LEADER IN FOMO
As I mentioned, the local board, on January 3, 2017, wasted no time spreading FOMO this year by releasing this prediction: “Demand Likely To Continue In 2017”.
However, it appears the premise of their FOMO warning – that demand wouldn’t be falling (therefore locals had better buy now or be priced out) – has been completely smashed to pieces so far in 2017.
* February detached sales down 25% y/y
* January detached sales down 18% y/y
Perhaps they meant that demand in the more expensive areas of Greater Victoria would continue in 2017. Those areas would be Saanich East, Victoria and Oak Bay – the areas talked about by many local real estate “professionals” as being targeted by buyers from Asia who had “suddenly discovered Victoria” in early 2015 and were “moving the market”. (The official number was 0.68%).
FEBRUARY: DEMAND FOR DETACHED HOMES TANKS YEAR-OVER-YEAR IN SAANICH EAST, VICTORIA AND OAK BAY
* Saanich East down 45% y/y
* Victoria down 38% y/y
* Oak Bay down 22% y/y
That dramatic year-over-year sales declines are showing up now shouldn’t be surprising if you’ve been following my posts since the middle of last year . It was at that time that I first began talking about the downward sales trend that started after April (approximately).
WHAT FOMO WILL BE RELEASED NEXT?:
Perhaps local realtors and the media are in the process of fabricating another story, complete with another group of imaginary outside buyers who are about to “suddenly discover Victoria” and boost those tanking sales numbers.
THE IRREVERSIBLE MARKET CORRECTION PROCESS
Did I mention that Victoria’s market correction process began last year and that the tanking year-over-year sales numbers were completely predictable as part of that process? And, did I mention that falling sales will lead to falling prices and a deep price decline?
The shocking decline (and reversal) in the year-over-year sales numbers has been, perhaps, the biggest story so far in 2017 for Victoria real estate.
If there has been an increase in deals going to buyers from Asia lately it is simply a matter of no importance since the sales numbers clearly indicate falling demand for detached homes.
Again, abnormally low levels of inventory can suddenly change to abnormally high levels in a matter of months, even as sales continue to fall.
IS OUR BUBBLE A YAWNER?
Housing bubbles have been happening in countries all over the world for decades (more than a century?).
That they always deflate and end in destruction is nothing new to those who have studied them.
What’s happening in Victoria right now certainly isn‘t cause for rewriting the book on bubbles. In fact, to those with enough knowledge of the subject, it probably seems old.
Peace, order and good governance.
One function of politics and law is to promote equality for the masses between the renters and rentiers.
Has politics become so dysfunctional that we are surprised they are making a solid effort to do their job?
Sometimes it feels as if real estate more sense in a communist country in the east block.
City, province eye tax on unoccupied homes
https://www.thestar.com/business/2017/03/30/city-province-eye-tax-on-unoccupied-homes.html
Not that the city will earn much from unsold houses. My neighbour’s half-duplex in Burnaby has just sold after only 10 days or so on the market at $1.3M.
I just got word that a few large builders are going to start charging upwards of 50k to have an assignment included in the purchase of a new home. Apparently they’re angry that homes sold 2 years ago and being completed are generating more profit for those that are flipping the deals before closing than the developer doing all the work.
“…….Officials have been instructed to study electricity and water usage data to ascertain the number of lightly-used properties in the city…..”
_________________________
Good luck with that, once J.T’s (not to be confused with G.T’s) new home cannabis grow-op rules kick in.
Im sorry Garth but who else but crooked foreign money or other criminal elements can afford to leave property empty? I understand some do but 65000 is a bomb shell that proves its a criminal or foregin element .Are they trying to hide or even create a shortage with plans to sell off slowly at inflated prices. Who wouldnt want to create income or ROI? There needs to be a heavy tax which would correct this housing bubble and rental problem thats been artificially inflated .
Btw my first post was a quick angry email to one MP. I will be sending many more.
Americans don’t have any more property rights than we do. I had friends whose house in a Chicago suburb was expropriated for future freeway rights of way. No plans for the freeway for years, but someone wanted a clear route.
My neighbourhood in central Calgary (Altadore) has few houses for sale, and the ones that are listed sell within a fortnight. No re-listings that I can see. What baffles me is that I can’t see where the money is coming from.
The downtown food courts where I eat every weekday are uncrowded. I can go into TD Square or Standard Life at 12h15 and have no trouble finding a seat. Every food court has one or two drywalled fronts where a national chain used to be.
Vacant office space everywhere. So where is the money coming from?
US citizens may not be able to fight eminent domain, but they can sue for compensation. You cannot. — Garth
Winston Churchill said, “the best argument against democracy is a five-minute conversation with the average voter” (or something to that effect, anyway). In Toronto, that should read, “the best argument against a free market (in real estate) is a 30-second conversation with anyone in the GTA. Period.”
Why not increase property taxes for everyone considerably? Use the windfall to provide free transit, low income housing, rental subsidies, you name it.
It’d make desirable urban properties slightly less desirable without having to go after bogeymen that may or may not have an effect on the market.
Unfortunately this is what happens when Greed and Stupidity meet and get married, Turning a basic necessity, shelter into a frothing speculators ponzi game.
Unfortunately it will not end well. But it seems that massive goverment intervention and interference is the only way to stop the stupidity.
Tax ’em all baby!
Bubble meet needle.
Since I sold and now am renting, I don’t have an issue with this. If this cools the taps on the speculators and brings things back to a normal level, all the better. I do feel for those that have a legitimate cottage though but this doesn’t seem to target those as this seems to revolve around Toronto.
You seem to be shooting down the fb tax, empty home tax, speculation tax, etc.
What do you suggest to cool down this market?
Give us at least 3, I’m curious what you would do as a premier of Ontario?
I love it, love it, love it. Tax the vacant homes, tax the flippers, tax the foreign dudes. This is nothing but great news for the middle and lower class segment of our population. Sorry Garth, no sympathy from this deplorable! Maybe they can tax old dudes who own ice cream shops too – just kidding.
Americans have a constitutional right to own property. Canadians? Meh. Not so much.
—
Has this statement been actually court tested or is it just an urban legend?
How come the Allen Road expressway got terminated by property owners, as soon as it hit Eglington Avenue, the affluent, powerful neighborhood?
The “empty home tax” is highly suspect to fail at the court room.
What’s next?
Securities buy and hold tax for failing to stimulate the economy?
Car tax for keeping it in the garage for extended time?
Grass tax for backyards, not utilized for plant grow?
By the way with dirt cheap automation it is a simple task to safely stimulate water and electricity consumption to remove red flags.
Is this fair? Just? Equitable?
—————————-
In a word… no.
Actually, it scares the crap out of me. That’s coming from someone who rents and owns no real estate.
Vancouver City Hall is swinging a very blunt instrument. A lot of innocents are going to get thumped.
Draconian. Backlash coming?
Hey Garth, I really liked your delightful post yesterday. It seems like you are well along a pathway to capture a dream unrequited. Hold on to it tight this time. They are even more ephemeral than we are.
Just got a notice from the landlord. Landlord is not planning to extend the lease since he is planning to sell.
Garth’s rent happily scenario doesn’t always work. Now I am in a dilemma to buy or rent another home. Its a hassle to move all the time when the landlord kicks you out and you need a home in the same locality so kids can continue in the same school.
Have 1.5 M in a most of it invested in ETFs (US Canada equities and preferred shares )and some individual blue chip shares. Do I need to consolidate all of those to buy a home or continue renting?
My husband prefers renting in this crazy market. I believe we were able to save 1.5M( from having nothing 10 years ago when we came to the country as immigrants ) only because we rented. I earn close to 100K and my husband close to 250K
Any suggestions?
Weeeeee this should be fun!
Seems like a pretty good tax to me.
When I lived in London (UK) for ten years, we and many others were paying 700 pounds for a bedroom in a house [plus bills and council tax] with other 30-somethings. Meanwhile there were an estimated 20,000+ vacant houses in the city. It’s even worse now.
What’s the point and where is the justice in hoovering up houses and leaving them vacant when other people are having a hard time finding a place to live? It’s dead capital, no income and housing made unavailable to the public.
Owning real estate is not a right. — Garth
Not a problem for buyers. If they can outbid one another, why cant they pick up the tab for the seller’s spec tax? Buyer will just add the condition – “buyer pays 100% of the spec tax”.
#9 Response by garth
actually in a case of expropriation in most jurisdictions in Canada, the moving partie is required to compensate the
land/property owner an amount equal to fair market value
in cases where the property owner disagrees and can reasonably substantiate the amount of compensation is below fair market value,they have the right to take it to the court house,for appropriate judicial ruling and compensation if successful. not withstanding the costs associated to commence a action,that can be quite hefty
Try it some time. — Garth
Looks like Toronto was Overbuilding By 40%. This is going to be fun.
https://betterdwelling.com/city/toronto/toronto-real-estate-doesnt-speculation-problem-overbuilding-40/
NO politician wants to be the one fingered for blowing up the toxic gasbag. NONE.
One entity (municipal in this case) screams FIRE. The other two (provincial/federal) look over their shoulder, shrug, and go back to their poker game.
Rinse, Repeat.
When the day of reckoning arrives…………………….
So they will use timers to turn the lights on and off. Big deal. The only thing that will pop the bubble is higher interest rates and a capital gains tax. Not gonna happen cuz the country will go bankrupt. Has there ever been a country that created and nurtured a property bubble the way Canada has? Anyone?
Absurd…what if you can’t find a tenant even if you wanted to? You have to be content to double your losses? Or what if you travel between provinces and/or cities to take care of family members and/or business activities, and need access to both of your properties on a regular basis?
Oh goody, VREU dropped in with a dated diatribe about collapsing sales and a refusal to answer why prices went up and are staying up…
She must have some cognitive dissonance since prices have gone up 20% in Victoria and surrounding communities since she started with her ‘the correction is around the corner’ speech last year arising from ‘the collapse in sales.’
Well, I told VREU that she should watch the foreign ownership numbers because she relied on 2015 data – which said that only 0.68% of Victoria buyers were foreign. Guess what, foreign buyers have increased 7 fold in 2016 to 4.7% – and golly gee, prices went up 20% over that time.
Its not like there is a correlation or anything. Its not like people in Victoria just discovered low interest rates after they have been low for 9 years; its not like the economy is booming in a stagnant government town; its not like average incomes have increased as Victoria’s is still below many other major cities.
So why the increase VREU?
If VREU actually got out of her Mom’s basement, she would have seen the changed demographics in Victoria along with the spread of luxury vehicles in a blue collar town.
You need to look around VREU at trends AND look at the numbers – you are not doing a good job of either.
“Low inventory levels are often seen in housing bubbles that have reached (or are about to reach) peak price levels. It is part of the way things play out as housing bubbles prepare to deflate”
And by the way, Vancouver had many YEARS of low inventory and we saw how prices went up 40-60% in the last two years.
Victoria is going up another 20% this year, especially once the GTA foreign buyer’s tax and empty homes tax gets implemented.
Just as the BC foreign buyers tax (which is really just the Metro Vancouver foreign buyers tax as its not implemented provincially) diverted dollars to the GTA, they will come for the next jurisdiction with not taxes in even greater numbers.
#8 South Etobicoke Trump Campaign Field HQ on 03.30.17 at 6:59 pm
I want to visit the Belfountain General this spring.
Do you have facilities for my cat?
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More importantly, does it have the proper non-binary facilities?
I smell flesh burning already from the news that Garth mentioned. And if the Liberal indeed do all that measures try to cool or prick the bubble, T2 for sure a one time pm and be gone. 65k is a huge number of vacant homes. Even if the measure put out, I highly doubt it will help much. After all, Toronto is immune from any economic downturn, remember? Because we are different. We are so world class and everybody want to move here. lol
Garth maybe some people have heard you… the stretch of Broadway from about Victoria to Rupert (in Burnaby, BC) has in recent months exploded in number of For Sale signs – probably totaling 40-50 on both sides of this 1km stretch of Broadway.
Because most of these are right next to each other in bunches, one can only assume they are being marketed (or the sellers were convinced to) for land assembly aka redevelopment big bucks. However to date have not seen any “Rezoning Application” boards near any of the stretch so one would assume nothing is in the works and these guys are just hoping the buyers won’t notice/care?
I drive by that stretch sometime for work and thought it was interesting. If someone here has more knowledge on this please do share!
The empty house tax is just another incarnation of the Leninist-Stalinist cry to “Kill all the kulaks!!” Where kulaks were first defined as having more than 5 cows, then 4, then 3, then 2 then a cow.
There’s never a shortage of people willing to stoke hatred of other people by portraying themselves as the victims.
And let’s be clear; taxing empty houses is nothing more than a hate tax on someone who’s been more successful or maybe, just maybe, had the same opportunities but been more financially disciplined, insightful, frugal, or just worked a hell of a lot harder…
Check out Ayn Rand’s “The Fountainhead” or “Atlas Shrugged”. Her style is verbose and tedious, but she nails what is happening. Quite frightening really.
If Housing was a human right, the bubbles would burst
Simple, just rent out your place to a Grow Op.
T2 will ensure Kanadians are baked out of their gourds at all times – this explains the high prices for houses.
Ps. the Queen emailed, she’s looking for the General Store to offer a higher ratio of sprinkles. Else face a new tax.
Question please: Is the Empty House Tax applicable to recreational properties like a Cottage?
What if you buy a residential house and turn it into a business, say a Day Care. Will the Empty House Tax apply then?
Thanks.
Pretty brilliant move, if they can collect! Not the ideal nor necessarily “right” thing to do but at this point they (city, province, etc) may as well make money out of this empty houses “problem”.
At any rate, if those empty homes belong to rich HAM’s or other foreigners just parking money in RE, since they are supposedly rich this tax probably won’t make much of a dent in their net worth. Speculators? that’s another story – bring on the taxes or other punishments.
#36 property rights on 03.30.17 at 7:31 pm
Quote: “By the way with dirt cheap automation it is a simple task to safely stimulate water and electricity consumption to remove red flags.”
Right on! That’s what I would do!
#39 Toronto Renter on 03.30.17 at 7:34 pm
Quote: “Just got a notice from the landlord. Landlord is not planning to extend the lease since he is planning to sell.”
That is why I NEVER will rent a condo again. Been there, done that; had to move way earlier than planned. Other problems: in Quebec, owner can cancel your lease at term’s end to move a family member in; so I’ll never rent from an individual either.
why would these investors keep the properties empty?
is it because they can’t rent them out because they are claiming them as a principal residence when they go to sell?
cause if not.. if its not a 10/10 luxury house just stick a tenant in there to cover costs at least.
So what’s cheaper, paying 15k empty home tax or leaving the lights and tap on so they can’t tell no one is living there?
Also how (or who) is buying up 30-50 homes at one time and then flipping them??? That would take a lot of capital.
We’ll look back at the housing debate one day and shake our heads. It’s truly amazing how crazy people can become when fear and greed take hold in a market. I spoke with someone who has a household income of over 250k and is scared that he won’t be able to afford a home.
My advice was, don’t be stupid and buy in this market, your rent is cheap so keep saving. If I’m wrong about a correction, work 5 more years then move to Florida and semi-retire. Become a Walmart greeter, you’ll be happier.
@#1 wavelength
“you completely missed the point I was making about generalizing like you were…”
*******************************************
uuuuh , yeah ,
I caught what you were throwing and then i followed up with the TAXPAYER garanteed govt employee pension plan that you were bragging about.
You know.
The underfunded govt employee pension plan that is topped up (insert “paid for’) by unpensioned taxpayers…..
Try and keep up……
P.S. No response about the lazy Walkerton city employee that killed how many?
Ok.
How about those rodent and cockroach infested restaurants all over ANY Canadian city?
But what are health inspectors worried about? Refrigerators that keep food at 8c instead of 11c.
Gotta write up a violation for that.
Or cooked food that is 2c too cold….another violation.
Give me a break.
“Inspection” means “cash grab” or harrassment.
And dont tell me Health Inspectors dont get free meals, cause I know for a FACT that happens.
@#1 Waveless
http://www.google.ca/url?url=http://www.cbc.ca/news/canada/toronto/court-upholds-toronto-health-inspector-s-conviction-1.1155943&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiAi-CyvP_SAhUEKWMKHdQZACoQFggvMAY&usg=AFQjCNHSWstSyE6AFtzTNyfzJTyFaidWng
That took 5 seconds on google
When Gov’t act it’s probably too late. All the measures being placed on housing will end up making the inevitable correction more steep. The double land transfer tax will make homes more illiquid. This is going to be one mama of a correction and every politician will look like a fool!
Net worth has increased but so has debt. If the underlying asset that the debt is on is the reason your net worth has increased. So if something happens to affect the value of the asset then net worth falls but debt stays the same. I do t buy any argument to suggest that money is flooding into Canada from China because lasti checked household debt keeps increasing. There are always 2 sides to a transaction, if someone bought a home someone else must have been paid. I just seems everyone is just transferring credit.
I’m rich, I know this because my debt is exactly 0 and I buy everything with actual money I have. I buy cars without financing, I go on trips with cash. I dont care if you give me 0% financing I can’t be bothered with it.
@#1 Waterless
Gee I wonder if THESE long term civic employees earned their taxpayer funded ,inflation indexed pensions?
At least the beer was properly refrigerated……
Walkerton….
During the time of the tragedy, both Stan and Frank Koebel denied any wrongdoing and firmly held that the water at Walkerton was safe to drink. However, as the tragedy grew in severity the two were eventually part of the criminal investigation into the tragedy, and, as a result, both would eventually plead guilty to a charge of common nuisance through a plea bargain. In their plea, they admitted to falsifying reports and Frank admitted to drinking on the job, as a beer fridge did exist at the facility.[3]
They were both formally sentenced on December 21, 2004, with Stan receiving one year in jail and Frank Koebel nine months of house arrest. Reaction to their sentencing was mixed.
Why stop there, when Comrade Tory could assign eligible families to occupy the empty properties as renters for a very low cost, payable to the City – which would qualify the empty property owners to be exempt from the planned tax, in case they chose to serve the public interest, instead of paying up.
It would generate plenty of enthusiastic voter support.
And the general well-being of mankind, of course.
‘so he’s desperate for revenue’. That is the true reason for any tax. Everyone is ‘desperate’ for revenue – governments of any stripe especially. They have a growing senior demographic whose income (as these people retire, by choice or due to no longer being able to work for some reason – health, eldercare, employer went bankrupt etc.) is not what it was when they were working & thus, the amount of taxes/revenues diminishes. It should be obvious that someone whose working income was $50,000 per annum while working is not going to be paying the same amount of tax if they then retire to a $25,000 pension. Which presumes they have a pension other than CPP/OAS, which a lot do not. In which case the annual income is going to be one heck of a lot less than $25,000 per annum. ‘Full’ CPP at age 65 for those who qualify (most don’t) is a mighty $13,300 per annum. OAS is less than $7,000 per annum. So at best, $20,000 annual income & good luck trying to live on such a sum. Given that most people receive maybe $600 per month CPP (due to taking it early or because the years they paid in were less than 39 & they never made enough to pay the maximum in deductions per year, either) you are now looking at perhaps $15,000 gross annual income per year. So then you qualify for GIS. Whoopee! There is a reason why senior citizens are living in homeless shelters in increasing numbers. It isn’t because they want to live there, it is because they can’t afford to live anywhere else.
Such a tax is an excellent idea, though not particularly novel. It works fine in Spain, keeping rents reasonable. The role of government is to ensure that citizens have reasonable and affordable access to housing. An empty house tax certainly helps with that. Canada has a long way to go and a lot to learn about socially responsible policies.
People may have a right to housing. They have no right to real estate. — Garth
Why not just double the taxes on empty homes, then add 2/3rds more if only 1 person lives there, 1/2 more if 2, 1/3 more if three…and if 4 or more…regular tax.
Socialism at it’s best.
Slightly off topic but GT… if there’s any question re the trickle down impact of the real estate insanity in YVR – here’s what $3000.00 per month gets you:
https://vancouver.craigslist.ca/van/apa/6057522965.html
‘Its cute as bugs ear’. ‘It fits like an old shoe’. ‘It oozes charm and character’. And Garth – you can bring your dog (just make sure he – and you guys have all your shots!)
Better snap it up. Let me know if you want to move to our ‘super natural’ utopia. We can pick you up at the airport.
Why don’t they just raise the mill rate?
Last time I checked, YVR was 1/6th Winnipeg, and Toronto was about half of what Winnipeg charges.
Percentage wise, YVR is a bargain for taxes, followed by YYZ.
Bringing the mill rate up to somewhere near the Canada average would certainly level the playing field, would it not??
Speaking of owning property, this was an interesting read recently,
Intrinsic rights,
http://www.johnccarleton.org/BLOGGER/2017/03/28/intrinsic-rights-what-does-that-mean/#more-274
Gives a whole new definition to the term “I own my own home”.
Laws like this will have many many many ramifications.
And couple this with a market dousing agenda that is coming to Ontario. Very interesting indeed.
Keep in mind, Garth is all for liquidity, balance, and diversification for good reason. Has always worked for me.
#1
Freedom First
Master of Freedomonics
If humans continue the accelerated path of mental retardation, as demonstrated daily, AI singularity takeover happens earlier than expected.
For the remaining sane population this might come as a salvation, at least they don’t have to become slave for other humans.
If they are smart enough to develop appealing traits for the coming AI overlords, they might transition to function as their pets, potentially living better quality human life than in the last phase of the pre-AI evolution era.
The Human Pets Research Institute Corporation is busy to find what might be appealing enough traits, features for AI to keep a small number of the qualified human population to entertain them, along with other animals and other biological life forms.
Human pet survival training franchise will be launched shortly for the brightest, funniest of the 7 billion that will be deemed useless and harmful for global life in the universe.
So, owners of empty houses will have to pay 1% of their estimated value in additional taxes while they go up in price 20%-30% per year (in TO, I mean). Yeah, more real hard cash out the door, but those who can afford to leave a house empty are certainly not going to care about this pesky tax.
I don’t see any problems here. What am I missing?
Equal treatment. — Garth
Here is some anecdotal hearsay for you all:
My friend is a builder – he estimates 30% of his new-build pre-purchasers are non-occupiers (either vacant/assign/flip/rent)
However tacit, Tory and his wife Barbara Hackett President of Stratheden Homes Ltd are in a Conflict-Of-Interest when it comes to Property Values.
—–
Further Points
1) I hope that Ontario’s new affordability measures do not include some sort of interest free loan / credit to First Time Buyers (myself included). These are purely inflationary – its 2017
2) The government thinks it can construct some sort of flat-line plateau style result when it comes to house values. It is economically impossible. Embrace the Fall
3) The Easiest and Least Objectionable thing we can do is regulate Agents. TODAY. NOW. IMMEDIATELY. Why aren’t we starting here?
Comment edited. — Garth
#36 property rights – Dont forget the new Roof Tax, its along the lines of their old Window Tax.
Poloz is not successful man because he wants to drag us down with a 50-cent Loonie while his friend Morneau wants us to work for free.
Poloz doesn’t have any control over the CAD. And the CAD is stable because inflation is going nowhere and the Canadian economy is back on solid footing. The CAD goes nowhere from here or higher.
@#51 Ex cowtown
“taxing empty houses is nothing more than a hate tax”
********************************************
nah, just another govt tax grab brought to you by the politically correct weenies infesting Vancouver City Hall.
But…..there’s an election in November and the rumour is ….Mayor Gregor is toast….
http://www.google.ca/url?url=http://vancouversun.com/news/local-news/vancouver-mayor-gregor-robertson-faces-scrutiny-on-return-from-vacation&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjv_sqFxP_SAhVG0WMKHf6cBN0QFggUMAA&usg=AFQjCNH_I4DftrxA8K9FjzmY2hCb2QFy5A
But dont worry.
After he dumped his wife for a newer, richer “model”….
he’s da man!( yo ! Waiverless! That was called “irony”)
http://www.google.ca/url?url=http://www.macleans.ca/politics/gregor-robertson-his-pop-star-girlfriend-and-a-corruption-trial/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiInbfPxP_SAhVO5WMKHQZrAVEQFggUMAA&usg=AFQjCNF7zdkes2fXE23b2_AGSDc-y_ROww
Another hard working civic employee……….
Should the government do nothing ? This housing problem is only going to get worse ,this is just the beginning ,how about five years from now. http://www.theglobeandmail.com/news/british-columbia/high-rents-low-vacancy-rates-create-crisis-for-vancouver-region-study/article30785297/
#53 TurnerNation on 03.30.17 at 7:53 pm
Simple, just rent out your place to a Grow Op.
= = = = = =
ha aha ha
meth lab exploded two blocks from me yesterday morning – what a mess (and the RV and the boat half melted so WHAT a SMELL, still, 24 hours later)
Great to see the city of Vancouver step up and attempt to halt the financial atrocities occurring there.
Hopefully Toronto follows suit.
Residential property is intended for just that – residents. You know, to live in and contribute to society. Not for the ultra wealthy to hoover and leave vacant and unusable by the 99%ers.
Something happened on the way to Canada 150 which managed rather well in the 1960’s with a small population of 20 million into 1980 with a manageable 25 million where previously housing was not a problem. Immigration was steady…50 thousand a year and we grew slowly without a big housing crisis which we have now.
So we are told by the government we need 300,000 immigrants per year plus many many temporary foreign workers and foreign students..ok I get that. These people need a roof. I get that.
Since the government has decided to invite all these people into our country without planning and without adequate housing and rentals we now are in a crisis due to our insatiable need to double the population in a short space of 25 years where the first 150 years were given to grow the population to 25 million.
now the agenda is grow 25 million every 25 years.
To get Canadians on board it would be appropriate to offer up all Canadians a “REBATE” of 30% of their property tax on their federal tax form if they show they are “renting” their vacant home. This way we will create “good will” and “good civic policy” for our fellow Canadians and all future residents who come to a civilized western wealthy country not anticipating living in a shed or a shack or homeless will get a roof over their head. Civilized and planned and encouraging to the populous and respectful of the taxpayers who toil to make it the “GOOD HOME” and good country it is.
Have you listed yet?-Garth
Unfortunately soon. Perhaps I should have keeped the 3 weekly trips to Seneca down to 1.
Anyone looking for a VBA guru with rotten teeth and reaks of the sent of an alcoholic. Has a prepensity to be caught staring at female brests in the office while thinking about EM drive technology and the electric universe. Oh let’s not forget the aroma of spent tabacco. Not to mention those crazy posts on linked in after the JD kicks in hard. Only to be deleted the next day. Hoping no one saw them.
That’s me.
Doesn’t look good for me.
Tried to re finance, asked me where I’m working.
I said. “On my second book.”
“How many did the first one sell.” Nice lady at the bank asked.
Proudly I said “112.”
Let the bids begin on Shlong Branch. Leaving 400 k on the table from this time next year.
Sucks.
Newbie investor question: what do all those abbreviations mean? cum = cumulative, red = redistribution, pfd = prefered ???
Bombardier Inc. 5.5% Cum. Red. Pfd. Series 2
Is there a glossary somewhere on the net and are those abbreviations standard and universal in meaning? I got this info on the “MarketWatch” website. Thanks
http://business.financialpost.com/personal-finance/the-golden-opportunity-of-a-pension-windfall-might-be-slipping-away-as-interest-rates-rise
You have been told time and again that you are one of the lucky ones. You have a defined benefit pension — meaning that when you retire you will get a fixed monthly payment for as long as you live.
“I agree you are one of the lucky ones, but not exactly for the reason that you might think. You are one of the lucky ones because you might be able to get an extra-large lump sum payout when interest rates are close to their historic all-time lows. But this opportunity could be slipping away.” (Ted Rechtshaffen )
I did this in 2015 at 47 years old very happy how its working out. It will match my lifetime pension amount if I had continued to build the DBP till 58, if I leave it alone till then @5%/Year. I will forgo the bridging amount, but will sleep better with well over 1 Million in invest-able assets.
Terms of the survivor Benefits when estate planning was the main reason.
(I’m blue collar worker with an education and trade making just under 100K/Y with 25 years of service) and I am back working while investments mature.
In Q1 of 2015 the Bank of Canada dropped interest rates by .25% this caused a jump of 22% in the transfer Value that month. If you look at the bank of Canada 5 year bond rates data you can see the dip in Jan 2015 and the dip in Feb 2016 the article mentions.
http://www.bankofcanada.ca/rates/interest-rates/lookup-bond-yields/
Select V122540 over the time period
Take the time to understand this and it could change your life for the better. It will take guts and find a good financial advisor to help invest it not gamble it.
Cheers.
Dear VREU,
At the end of the day, the only year-over-year comparison that matters is price. Nobody gives a dang about volume, which apparently has little or no correlation to prices.
Remember.. price.
Commenters here oft ask where is the money coming from for the purchase of houses in YVR. Did you see the recent article in the Van Sun about the RCMP sting against two Hell’s Angels with a cocaine importation gig? $2MM delivered in cash and a few weeks later another $2MM handed over in cash. Tats in Kerrisdale.
Reminds me of my readings on the cocaine trade in Calif. and Fla. The easy part was flying in the narcotic. The hard part was legitimizing warehouses of cash.
#17
Her Majesty owns every square inch of Canada (which Garth Turner, as a former Minister of the crown, should know). She graciously grants you a lease, known as a deed, typically , but not always , in perpetuity. It is yours to sell trade or pass on to your heirs. Should any of her duly elected or appointed entities have need of it however, they can and will take it back, using the legal
tool known as expropriation
———–
And this one reason why I’m in favour of a future referendum to vote on keeping her/ his Majesty (prob Charles by then.)
I agree with owning property being privilege (earned) vs an (entitled) right. Ditto with drivers licences. Having children should be the same IMO.
So, owners of empty houses will have to pay 1% of their estimated value in additional taxes while they go up in price 20%-30% per year (in TO, I mean). Yeah, more real hard cash out the door, but those who can afford to leave a house empty are certainly not going to care about this pesky tax.
I don’t see any problems here. What am I missing?
Equal treatment. — Garth
—————————————–
While I agree that this tax would be unfair and such, my understanding was that the purpose of introducing it is to cool down the housing market and I just don’t see how that will work in the conditions I described in my post above. This market has no slowing-down in the near future. It is just picking-up steam.
And no, I am not a RE shill. A renter, saver, and tax farm slave who made the big mistake of not getting in because I operated with a rational mind. Bitter and sad.
#29 Average Joe
“the best argument against a free market (in real estate) is a 30-second conversation with anyone in the GTA. Period.”
__________
What makes you think there is a free market? Consider how many government interventions are involved in real estate. First is the suppression of the cost of money by central banks everywhere. Another is the socialization of risk and privatization of profit thanks to CMHC. Another is the capital gains exemption on a primary residence. Can you think of any more? What might the market look like if none of these factors existed?
Great feel good story about family buying house for less than what was offered but still sad, that this family is going to go into so much dept
http://www.dailymail.co.uk/news/article-4364548/Family-s-letter-nets-home-112K-highest-bid.html
Torry is a career loser. He is terminally un-electable.
That’s why they had Rob Ford fake his death and disappear. (They had the dope on Rob and he had no choice.) This would have never happened with Rob.
(Go ahead and believe that Rob had a rare form of cancer that you’ve never heard of, that he never lost a pound in the hospital and never even looked sick, if you believe that….. you deserve John Torry)
I’m stunned by Vancouver’s new tax…
Perhaps it’ll warrant a new Wikipedia entry: “Wealth Redistribution in Vancouver, B.C.”
What’s next…scanning supermarket CCTV to see who’s purchasing rib-eye weekly?
Absolute madness from a grossly irresponsible government.
In May, I might just vote for…..ah, jeezzzz!
@YVR Renter
“I make a very good income, but having only lived in YVR since last summer, there’s no way I can afford a home for me and my family unless I go up to my eyeballs in debt.”
I hear you. Spouse and I moved out of Vancouver 10 years ago now and I thought things were insane then. We were able to find not just good, but better jobs on the prairies in our chosen fields. We knew it was important to us to own, so we went- left our families and friends behind and set out on a new adventure. It was difficult at first of course, but we made friends and kept in touch with our families. Our quality of life is so much better. Yes, the weather is colder but we were able to buy a good home in a great neighbourhood, save for our retirement and the kids education and have money left over to travel.
If your priorities are clear then you may have to make some sacrifices as to location. I don’t say this to be condescending but to be comforting. It can be done.
#30 Andrew
Why not increase property taxes for everyone considerably? Use the windfall to provide free transit, low income housing, rental subsidies, you name it.
==========================
Right on comrade!! As Karl Marx said: “From each according to his ability, to each according to his means” We need to create a Communist utopia in Canada. Forward proletariat!!
Hi, Garth.
No one mentioned this but about a month ago, the pension fund for the U.S. Teamsters Union went bankrupt.
About a week ago I heard that U.S. pension funds are in trouble because their business models don’t operate at a below 8% interest rate.
Now given that the super low interest rates in the U.S. are causing their pension funds to be at risk of folding does this same issue exist in Canada? Are Canadian pension funds at risk because of the many years of ultra-low interest rates?
Does this issue even have the notice of J Trudeau, Morneau and Poloz? (The Three Stooges? Just kidding!)
If Canadian pension funds are at risk, like they are in the U.S., I think the Three Amigos should agree to start gradually raising interest rates immediately to save the pension funds and prevent further mortgage-based systemic bank risk.
They’re going to have to sacrifice speculators and fools but there’s an 800-pound gorilla in the room that they seem to be ignoring.
Anybody want to comment?
Re: Empty home tax. What an opportunity for a young person having handyperson skills & of good character to babysit the home, showing a prescense, cutting the lawn, etc, and hopefully to get free or reduced rent.
M80MB
2383 Popeye
Yep. Total agreement. As legions of govt employees waltz into retirement all over North America the “Payout” vs “Pension” is creating problems.
A friend of mine in Edmonton is a retired Fire Captain. He took the cash. $800k vs a pension. He rationalized the statistical chances of most firemen not living to see 75 due to cancer, heart attacks, whatever….
BUT more and more civic employees are taking advantage of the payout because they either have kids that “need” houses or they worry those unaffordable pensions wll be cut….sooner rather than later.
Money Sense 2013
“But while the risk of public sector pension collapse in Canada is very low, these plans face the same cost pressures as those in the private sector. In the event of a shortfall, taxpayers are on the hook for at least 50% of it. In some jurisdictions, like the federal government, they’re responsible for all of it.
Few Canadians realize how massive some of these unfunded liabilities are. The most egregious offender is probably the federal government itself. The C.D. Howe Institute recently revealed Ottawa’s unfunded pension liability using government accounting was $148.9 billion at the end of the 2011-12 fiscal year. That’s more than $4,200 for each of the country’s 35 million people, and more than a quarter of the federal government’s entire debt load. (Using “fair value” accounting favored by the C.D. Howe Institute, the unfunded liability is even bigger: $267 billion, or a whopping $7,600 per person.) Many provinces and municipalities also have gaping shortfalls.
While you can expect public service pension credits already earned to be unaffected, future benefits are likely to be curtailed. “Just because your pension is safe doesn’t mean it’s affordable, and it doesn’t mean there won’t be significant pressures to make these deals more cost-effective,”
As most govt employees think like the Rolling Stone’s song sez ” Tiiiiime is on my siiiiiide”
No it isnt.
The right typical is too busy figuren out how to make more loot. The next venture. Polital activisum not on the priority list.
The left. The King Kong of victonoligy. And protests.
What the left is completely unprepared for, Opposition.
I’ve never seen so many logical people mobilize, organize, park the money making skills for a bit just to slap these lunatics to awake that have gone unchecked for to many years.
It’s not right or left anymore.
It’s individual rights and freedoms vs collative insanity.
The commies as always lose , good morning venesswala.
CIBC just outsourced 130 finance jobs to India.
The layed-off Canadians have to train their replacements from India.
The Boy Wonder and the Liberals, and the Cons before them, stand by and do NOTHING while large banks and corps send well-paying, highly-skilled jobs from Canada to India. Disgusting!
Time for a revolution. When will Canadians get a government that stands up for the highly-skilled worker-force? Maybe the NDP? Green? Which political party is going to stand up and fight this madness?
Boy Wonder and the Liberals = “Canada Last”
http://www.cbc.ca/news/business/cibc-outsourcing-jobs-india-1.4045759
Most interesting wagers lately on the oil sands deposits a few miles away from my substandard rental in Ft. McMisery of late. Two multinationals (Shell and ConocoPhillips) ditch us to two Canuck outfits (CNRL and Cenovus) for $11 and $17 billion respectively. Like a bride/groom ditched at the altar. Who got it right?
(Referencing the GTA) So potentially the city wants a tax if your house sits empty for over 6 months. Potentially the province wants to tax foreigners upon purchase, and tax home owners upon selling if they own another property. And if you rent it you pay federal tax.
And the Federal lending rate will rise here within 12 months.
No pin prick for this one. More like a nail gun.
#51 Ex-Cowtown on 03.30.17 at 7:50 pm
Well said, well said!
Smoking man, here’s one for your earbuds, Blast it!
https://youtu.be/yg3mNcjDNKg
#15 JR
#76 Smoking Man on 03.29.17 at 10:20 pm
Done. Bought the book today. You were the only one on this blog who predicted the Trump win. Now I am going to learn how you really knew!
That was a big waste of money… even a broken clock is right twice a day!
Liberal economic action plan (Liberal corporate gravy train):
1. Increase deficit to $30 billion
2. Transfer large sums of money to private corporations in hopes they won’t lay off staff or leave Canada.
3. Those large corporations give large bonuses to senior execs who lay off staff and outsource jobs overseas.
4. Liberals pat themselves on back for encouraging innovation.
5. Layed off workers apply for Employment Insurance.
6. Liberals throw money at retraining the layed off workers.
7. The Boy Wonder signs trade deals with Europe, China in the misguided belief it will create more jobs.
8. The Boy Wonder goes on cross-country speaking tour to tell people what he thinks they want to hear – his speech includes all the appropriate catch phrases like “innovation”, “the middle class”, “training”, “coding”, “the 21st Century”, blah, blah, blah
Is this fair? Just? Equitable?
-> Yes Grath it is. The owner is as stupid as &^&beep&& to own anything of that crappy caliber at THOSE insane prices. (I bet the 6 mil houses don’t get the bet). Stupidity ALWAYS gets penalized (usually unfairly)…fact that gets it overall FAIR.
What purpose is served through the arbitrary imposition of an extra new levy on people, simply because they own property?
-> wrong baby. Gov knows it’s bankrupt and finds ways to 1) augment income 2)appears it does something to prevent riots for when UE hits 15%, pesso 50c and the yellow unspoken-for-here over 2K (pesso at least)
Garth, you are absolutely wrong on this topic.
I’ve been ranting and raving for governments to get serious about increasing taxes on secondary properties. Finally, they’re getting the message.
The government of Canada is $1,000,000,000,000 (one trillion) dollars in debt and climbing.
Each and every province has massive amounts of debt. Many cities and towns are struggling to maintain infrastructure.
All levels of governments have massive amounts of debt, while there are many extremely wealthy people with millions/billions in assets (cash, real estate, equities, bonds).
This represents a massive wealth transfer from the public/government to private corporations and individuals.
Now, finally, finally, the rich will be starting to pay a higher rate, which they can afford.
A piece of land, a building, a property, a house, only exists by virtue of all levels of government who defend our borders, pay for a police force, pay for infrastructure, zoning, bylaws, sewage, water treatment … without the government, ownership of anything could not exist (look at Somalia etc).
So suck it up Garth, the average person who has been completely SHUT OUT of the housing market and has had their job outsourced to India or wherever is FED UP and is not going to take it anymore, and finally, some government officials are listening. I told you your bubble was gonna burst. POP!
That makes no sense, unless you think you’re entitled to what others have earned. — Garth
I am positively all for an empty residence tax in at least the Toronto, Vancouver and now probably the Victoria areas as these seem to be the areas most affected by both speculation and foreigner hoarding, both of which should have been dealt with and stopped in their tracks years ago.
The same problem is going on all over the world right now and there is no need to allow any one from anywhere who is not at least a Canadian legal resident or citizen to come in and just buy up anything they want and hoard it.
What ” leader ” in their right mind would think that is good for the country and it’s citizens.
I know at least in Thailand and the Philippines that no foreigners are allowed to just buy real estate at will and if they had been allowed both of those countries and their citizens would be wiped out for the most part because they don’t make much earnings to begin with.
Letting this crap continue unabated is a crime against the ordinary citizens and has created enormous fundamental instability which if left unaddressed and unabated will just make things that much worse.
So eff them and the horse they rode into town on and i really hope the best for our own citizens.
Can you provide evidence of foreigners ‘hoarding’ houses in Toronto? — Garth
#60 crowdedelevatorfartz
If you want to ignore the other examples and grab the Walkerton – let’s go with that. The role of the utilities commission in the tragedy…
“The public utilities commissioners had little, if any, knowledge about matters relating to water safety and the operation of a waterworks facility. ”
http://bit.ly/2nl3exQ
The very lack of government resources, regulation and intervention is the issue that you seem to think is a lazy civil servant. The way drinking water is regulated in Canada drastically changed after Walkerton. Had the more robust those checks and balances like lazy health inspectors do today been in place that tragedy could have been averted.
You can read this if you want to hate on the role of the Health Inspectors in Walkterton
http://bit.ly/2mUfIkp
Regardless your mind is made up. If your happy serving food that’s been sitting at 11C or is undercooked to the Young, Old, Pregant, & Immunocompromised and decry it as government over-reach in your business – well shame on you. Your working cause you’re healthy (healthy worker effect – look it up) – there are a lot of people that may visit your shop whose health is on a knife’s edge because they’re in that YOPI group. But I should stop trying to convince you – it’s no point cause obviously in business you’ve valued $$$ over safety if you hate health inspector nazis so much – I pray you’re never in a situation where a YOPI member of your family eats in such an establishment.. your tune would quickly change.
And since I have to address everything you say otherwise “P.S. No response”…
There are corrupt health inspectors does not equal all health inspectors are corrupt.. just like there are business owners who put profits above health of their clients…does not mean all business value profits above health of their clients…
Sorry Garth for taking one line in your original post and turning it into a flame war on the role of government in preventing public health concerns…
#94 Sam the Sham
I agree. And I hope here’s a lot of ability out there, because I have a lot of needs.
Sobering thoughts… Under the prevailing brand of “social justice” all sorts of actions can be justified. This tax may just be the prelude to taxing unused capital. After all, is it “fair” for some to have funds they do not need when the majority need more funds than they have? What about those who own more cars than they need? Etc.
(Recall than in economystics there is no difference in how capital is earned or used, so a responsible saver and a big spender are both equal and deserve to have the same life)
I no longer have confidence that TFSAs or RRSPs will be left alone by an indebted government and its indebted electorate. Under a “social justice” platform, taxation to reduce the “imbalances” between ants and grasshoppers is the inevitable (and majority-backed) outcome.
Has the world gone mad with debt? Who are the greater fools again?
A number of people have ‘lost’ a bit of money in the couch. North of $20 trillllion. So they’re not paying tax on the income (yeah, it’s still producing income, in the couch). 8% of all global financial assets, give or take.
So yeah, as long as the guy living next to you three months a year is a non resident for tax purposes, or he’s here year-round, but his multimillion dollar house is mortgaged to the hilt and his pin money comes trickling in from an offshore trust, then YOU are going to have to pick up the slack. Real estate taxes, higher marginal rates, user fees, fewer domestic tax avoidance loopholes, you name it.
https://www.google.ca/search?q=missing+assets+tax+havens
The City should cross reference whether rent has been paid on a property and then levy the 1% tax if it hasn’t.
Owners of secondary properties have been breaking the law for far tooooo long without any fear since the gov condones some types of corruption.
A national housing database needs to be built ASAP.
That makes no sense, unless you think you’re entitled to what others have earned. — Garth
No one ‘earns’ anything. People take advantage of others (poor workers in Asia) or make donations for benefits (Trudeau Foundation, BC Libs), etc. I’m surprised you don’t know that Garth being an Ex-Politico.
Memo to self: don’t wrestle with pigs. You all get filthy. They love it. — Garth
I feel like I’m supposed to feel outraged … but I don’t. This all seems rather sensible and fair considering the state of affairs.
#39
My husband prefers renting in this crazy market. I believe we were able to save 1.5M( from having nothing 10 years ago when we came to the country as immigrants ) only because we rented. I earn close to 100K and my husband close to 250K
Any suggestions?
————–
Yes, stop trolling!
To#39: There are still chances you can keep renting the place just with a different landlord
#95 Long-Timer Lurker on 03.30.17 at 10:14 pm
Hi, Garth.
No one mentioned this but about a month ago, the pension fund for the U.S. Teamsters Union went bankrupt.
About a week ago I heard that U.S. pension funds are in trouble because their business models don’t operate at a below 8% interest rate.
Now given that the super low interest rates in the U.S. are causing their pension funds to be at risk of folding does this same issue exist in Canada? Are Canadian pension funds at risk because of the many years of ultra-low interest rates?
Does this issue even have the notice of J Trudeau, Morneau and Poloz? (The Three Stooges? Just kidding!)
If Canadian pension funds are at risk, like they are in the U.S., I think the Three Amigos should agree to start gradually raising interest rates immediately to save the pension funds and prevent further mortgage-based systemic bank risk.
They’re going to have to sacrifice speculators and fools but there’s an 800-pound gorilla in the room that they seem to be ignoring.
Anybody want to comment?
—————–
The 3 stooges are busy making Canada into a Post-Nationalist State. Sorry, no pensions for you if those from other countries don’t have one. Move along…nothing to see here.
Another one percent increase in property taxes coming to a city near you.Once they are done with the empty house tax, they will move onto the million dollar house tax because all the millionaires can afford it and are priveleged.It won’t take long for this to happen once they realize the windfall they can get by getting people to turn on each other.
There is a great article on Financial Samurai titled stealth wealth, worth looking into and following as anyone who seems to have anything will probably have it taxed away in “fairness”.
Raise interest rates !
PS I am not mentioning the yellow-unloved :)
Cmhc is the problem. Everyone is flailing their arms in the water trying to keep the titanic from sinking.
It’s the CMHC stupid!
Take it out of the picture and suddenly you will need an annual income of 500k to buy a T.O. tear-down or a Van special.
#62 I’m stupid on 03.30.17 at 8:28 pm
When Gov’t act it’s probably too late. All the measures being placed on housing will end up making the inevitable correction more steep. The double land transfer tax will make homes more illiquid. This is going to be one mama of a correction and every politician will look like a fool!
Net worth has increased but so has debt. If the underlying asset that the debt is on is the reason your net worth has increased. So if something happens to affect the value of the asset then net worth falls but debt stays the same. I do t buy any argument to suggest that money is flooding into Canada from China because lasti checked household debt keeps increasing. There are always 2 sides to a transaction, if someone bought a home someone else must have been paid. I just seems everyone is just transferring credit.
I’m rich, I know this because my debt is exactly 0 and I buy everything with actual money I have. I buy cars without financing, I go on trips with cash. I dont care if you give me 0% financing I can’t be bothered with it.
that’s why your name says it all….
I already posted this but not sure if it went through as some bizarre bug must’ve been happening at the time. I went to browse the comments on my phone, SM’s Post 81 was the last post and it was showing “Your post is awaiting moderation” in bold as if I posted it. Even weirder was the Name, Mail, and Website under “Share your Comment” was filled out with SM’s details for all three. After a short while it went back to normal. Not sure if this “bug” was just on my side.
Big cities have always imposed rules on how properties are used. If you don’t like it, you could always move to the boonies, buy a beautiful old building and open an ice cream shop.
@Toronto Renter
I hear you. We rented in T.O. for 18 months after we sold, then we got the heck out of Dodge. School district be damned – they were surplussing our high school anyway. We just couldn’t keep moving every two years with two kids. That in and of itself costs a fortune! Loving our new home in the west end of the GGH, and the Go commute isn’t so bad.
#85 WUL on 03.30.17 at 9:38 pm
in the article I read it stated that 2 million of it smelled and looked like it had been buried for a long time…
my understanding has been that its very difficult to legitimize the cash. I have heard it sits around in sacks in storage lockers or is buried in rural surroundings…
and continually rolled over …
What a joke.
They charged foreigners an entrance fee criteria.
And now because of all the foreign money that has bought its way in into Canada’s market and increased prices we locals also get screwed by this additional tax gouge.
Didn’t even get kissed first.
Hopefully that tax won’t hit Alberta where about one half of the residential rental units sit empty for years on end.
Re: #117 TRT on 03.30.17 at 11:55 pm
Poloz is a lost cause, he thinks zero or negative interest rates are the answer to everything.
I could show you some more cases of people who bought a house at the peak in 2016 that are now struggling to get their money back, but I will take a slightly different tact and show you a couple of the more bizarre purchases I have seen over the last couple of months of my study as to what is going on in Vancouver real estate.
In July 2015 someone thought that it was a good investment to spend 3.02m on condo 102 – 5131 Brighouse Way which at that time was a couple of years old.
In January 2014 someone thought that I was a good investment to spend 3.13m on condo 501 – 5131 Brighouse Way ,obviously in the same building and competed at the same time.
These guys are asking 3.88 and 3.99 respectively and so they are not in Pink Pollen territory yet ,but I still find it hard to see this story having a happy ending for either of these sellers.
To put these purchases in perspective these guys spent over 6 million dollars on two condos for which they obviously own no land , in a derided part of Vancouver out by the airport and while I have only been to Toronto once ,a quick look at google maps suggests that it might have some similar features as Mississauga.
While most owners assessments went up by vast amounts last year these guys assessments actually shifted into reverse , a trend that is all but certain to continue in July.
There is new inventory being added each month , and really it is new condos/ pre sales that is driving the whole Vancouver market at the moment as that is how everyone is told get ahead in life.
Don’t overpay on someone’s else’s condo….overpay on your very own….you will be the first person to overpay on this place ,congratulations!
Even one of the B.C Liberals propaganda ads states that you should buy a place now to start working on your nest egg.
Soon everyone is going to be eating omelettes…
M42BC
102-5131 Brighouse Way, Richmond
https://www.zolo.ca/richmond-real-estate/5131-brighouse-way/102
https://evaluebc.bcassessment.ca/Property.aspx?_oa=RDAwMDBLMkI3VA==
501-5131 Brighouse Way ,Richmond
https://www.zolo.ca/richmond-real-estate/5131-brighouse-way/501
https://evaluebc.bcassessment.ca/Property.aspx?_oa=RDAwMDBLMkI4Vg==
Not that big a leap before governments start issuing mandatory residence permits that govern where you CAN live – e.g. X km from your location of principal employment. No job? Back to the village for you. Works fine in that country T2 admires so much…
So far this is small beans. Canadian governments had no qualms about confiscating property from legal Japanese Canadian residents and citizens during WWII. Back then they looked as suspicious as the Chinese do today it would seem.
During the Mulroney era Constitutional public dialogue conferences the Council of Canadians and other “hand-picked” left of spectrum political insiders gloated about completely trashing all the proposed provisions to protect the property rights of Canadians. At one point the provisions were headed to result that shelter was a human right, and the only people who would be guaranteed a home by the government were those who hadn’t made any effort to buy their own. LOL
It is can be sold to Canadians as being for the “greater good” our governments won’t hesitate to start confiscating assets.
#95 Long-Timer Lurker on 03.30.17 at 10:14 pm
Hi, Garth.
No one mentioned this but about a month ago, the pension fund for the U.S. Teamsters Union went bankrupt.
About a week ago I heard that U.S. pension funds are in trouble because their business models don’t operate at a below 8% interest rate…………
………………………
……….Anybody want to comment?
————————————————————–
I’ve been wondering the same thing about the pension stuff…
https://www.bloomberg.com/view/articles/2017-03-24/pension-crisis-too-big-for-markets-to-ignore
And then these tidbits:
https://www.bloomberg.com/news/articles/2017-03-28/-deep-subprime-becomes-norm-in-car-loan-market-analysts-say
http://wolfstreet.com/2017/03/24/subprime-auto-loans-crushed-worse-than-2009-auto-industry-bleeds-knock-on-effects-commence/
-Copied comment below from link directly above-
” MC
Mar 25, 2017 at 9:58 am
0% EAPR on motorcycles were a reality in most of Europe until 2008 and 2009. Part of the reason Harley-Davidson needed to be bailed out by Warren Buffett (long story) was because their financial division was more or less ground zero for toxic moto loans.
And guess what? They are back. Honda is doing it on “selected models” right now.”
…….Coincidentally, hubby is in construction here just across the river from Portland. Finishing up grouting a fireplace mantel last week and chatting with the owner he asked her how it felt to finally be in their new place after a year long project. (Expensive build for this area, builder figures they ran over budget up to a mill in the end)
Her answer: Well, we own the local Harley shop and sales haven’t been good at all recently so… we’re sure hoping our other house sells…. Then added how HD laid off workers recently, I assume referring to last fall.
Anecdotal post here mostly but whats happening on the ground is a good indicator.
Here’s Robert Shiller’s latest paper regarding narratives in economics.
http://cowles.yale.edu/sites/default/files/files/pub/d20/d2069.pdf
See Page 38-this what I feel/see/hear from my cohort of peers/housewives from the middle class in this booming area. “how expensive apples were the other day”, “I’m not paying $3 for silly putty for my child!” etc etc
Meanwhile, the Goodwill outlets -or “the bins” as we call it locally- where I shop for ebay resale were PACKED last weekend, more so than ever and with lots of recognizable newbies. Everything in the bins is priced @1.70/lb and on down if you make a haul of 25 lbs or more. Newbies are easy to spot since if you don’t have toes behind the marked lines as they push the carts of “new” goods in, you get barked at and its hands off the goods until all bins are in place. When the all clear is given, its all knees, hindquarters and elbows…
Friend of mine found and sold a watch for $1000 with which she was finally able to pay her mortgage that month. Thankfully that friend wisely sold the place last summer-(she’d built in 2006).
Anecdotal stuff is truly telling I think. If its so hard to find the truth amongst all the deception, then we’ve got to rely on verbatim and whats happening on the ground. Or maybe I’m just a poor deplorable but I rent on 80 acres, buy organic, grow food, have chickens, get most of our clothes from the bins for 10% of the retail price, see no reason to buy a vehicle newer than my 24 yr old Eurovan and travel often. I think the time is comin when my friends might start seeing the light about why we do what we do.
Or I’m dead wrong and all this debt is just the new norm and she’s uppa from here, all around. With Trump whispering in cahoots with so many bankers and a proposal out to separate investment banks from main st banks regulation wise… one wonders. Maybe debt is money and anyone can be “rich”. I’m just stupidly standing on principle then I guess.
A childhood playmate lost to a 3 city block expropriation by the City of Edmonton for a freeway project. His parents tried to fight it in court and hold out for a better price.
Result: his home used to sit on what is now the north end of the Capilano Freeway.
Torontonians should gracefully accept a 100 % increase in property tax, then they would be paying only 50 % of what we do in Timmins where a $800,000 house pays $15k a year.
Vancouver Dudes:
Totally agree with your debt-free lifestyle (I’m living it too, have been for years) – but if there’s 0% financing on the table and your investments are earning >0%, then why wouldn’t you take it?
Side benefit: debt-free people like us need every opportunity to keep the credit rating decent – this is one way of doing that.
Ford Seeks to Curb Long Car Loans as Canadian Debt Pile Mounts
https://www.bloomberg.com/news/articles/2017-03-30/ford-seeks-to-curb-long-car-loans-as-canadian-debt-pile-mounts
If it’s so simple for any level of government to arbitrarily impose a selective tax on a targeted group of asset holders, why can’t the same principle apply to legislating an increase on mortgage interest rates, while keeping the general interest rate where it is. Just deflate the value of real estate by making it more expensive to borrow money for it. The biggest single factor in the overvalued property market is the cheap cost of borrowing. Low mortgage rate = high house prices. High mortgage rates = low house prices. Any other measures will ultimately do nothing to stop house price inflation. It’s nothing but political drivel.
#66 Pepito on 03.30.17 at 8:31 pm
Such a tax is an excellent idea, though not particularly novel. It works fine in Spain, keeping rents reasonable. The role of government is to ensure that citizens have reasonable and affordable access to housing. An empty house tax certainly helps with that. Canada has a long way to go and a lot to learn about socially responsible policies.
People may have a right to housing. They have no right to real estate. — Garth
____________________________
Such a tax has nothing to do with owning realestate. It has everything to do with incentivizing owners of unoccupied residential realestate to utilize that asset for public good. An empty house tax increases rental stock and, thus, helps to keep the cost of rent reasonable. What part of that do you not get?
Always interesting to see the hypocrisy of the investor class fighting for tax breaks for investors on the basis of incentivizing risk ( and presumable public good, ie economic growth) but when a government introduces similar incentives for utilizing housing for public good, all of a sudden it’s about fairness.
Uhhhhhhh…1 more thing…….
Toronto property taxes need to double, like NOW.
Don’t like it? Sell the property.
The sudden supply in homes increase will lower prices.
Why are Toronto home owners a protected species when it comes to property tax?
Toronto property taxes are disproportionately low.
Toronto politicians need to stop beating around the bush regarding this issue. The money is there. Take it from the property owners who have realized this massive windfall over the last 15 years. Stop playing around.
Blog dogs . Whatever you believe is the cause for todays housing bubble spend a little time and email your MP or whoever you think needs to know. Let them see the growing angry mob. That maybe will pit them into action. Its amazing how lazy and usesless politicians have become. Garth wasnt lazy or useless and Harper hated him for it.
We already have the EHT in Ontario – Employer Health Tax. Nobody knows about it but any employer with payroll over $400k has to pay 1.95% of payroll to the province. Costs my small business about $60k a year. Just another chunk of change we could actually use to expand, hire someone or just pay myself another dividend and spend a month on a beach with the family.
What a house of cards Canada has become . Its all based on unpayable debt. Canadians will spend until they go bankrupt. They will make the monthly payment until the debt game stops. Then they will go bankrupt in mass .
https://www.bloomberg.com/news/articles/2017-03-30/ford-seeks-to-curb-long-car-loans-as-canadian-debt-pile-mounts
#118 Millmech on 03.30.17 at 11:55 pm
Another one percent increase in property taxes coming to a city near you.Once they are done with the empty house tax, they will move onto the million dollar house tax because all the millionaires can afford it and are priveleged.It won’t take long for this to happen once they realize the windfall they can get by getting people to turn on each other.
There is a great article on Financial Samurai titled stealth wealth, worth looking into and following as anyone who seems to have anything will probably have it taxed away in “fairness”.
**********************************************
Agreed. And it will eventually get extreme: tax if your house has a pool, tax if your house has a driveway and you don’t have to park on the street.
People have made a lot of money on real estate in recent years, and for them I’m happy. But the writing is on the wall: in the future (15/20 years from now) real estate will be more of a liability than anything else.
Just look at what’s going on in Chicago and Illinois: that’s the future for us all.
Taxing unoccupied property will likely have the unintended consequence of increasing rents as owners have no choice but to pass down the additional costs.
So What is stopping me from paying a college kid 100 bucks to say that he’s renting my summer hangout for 1 dollar a month and declaring that as rental income?
” As frightening as it is to consider public debt increasing to more than 100% of GDP, an even greater danger arises from a rapidly aging population. The related unfunded liabilities are large and growing, and should be a central part of today’s long-term fiscal planning.
“It is essential that governments not be lulled into complacency by the ease with which they have financed their deficits thus far….
“… [W]e note the risk that persistently high levels of public debt will drive down capital accumulation, productivity growth and long-term potential growth … [A] recent study suggests that there may be non-linear effects of public debt on growth, with adverse output effects tending to rise as the debt/GDP ratio approaches the 100% limit….”
— Bank for International Settlements
http://www.bis.org/publ/work300.pdf
If I’ve done the math correctly using the tables you provided, Canada’s debt/GDP ratio is 80%* as of Q4 2016.
* Total public debt ($1.667 trillion) / GDP ($2.068 trillion)
#4 Owe Canada on 03.30.17 at 6:54 pm
“The borrowing and spending binge by Canadian households, businesses and governments (all levels) continues unabated. Growing the debt in the economy significantly faster than the economy itself grows seems to have developed into a way of life in Canada.”
….”At the end of December, 2016 the total debt outstanding in Canada was 3.5 times greater than our annual gdp, and looking at just the total debt outstanding of domestic non-financial sectors, that was 2.5 times greater than our annual gdp.”
I know. Beyond pathetic. Great post.
Meanwhile, the selfie brigade continues to spray our taxes about like through a fire hose. Jobs continue to evaporate and those that do see the light of day are predominantly servile in nature.
Our deep economic problems won’t be solved by attempting to staunch the re monster with more taxation.
It most definitely will be by dealing with the source of the problem: restoring value to money, therefore making it more challenging to borrow by fools who buy re uniquely as a fast cash commodity. And more attractive to those who would then see it as a powerful means to building a secure, independent (less reliance on social programs) and quality retirement.
What we’ve had for far too long, is not just cheap money spinning extremely fast, causing galactic re and tax increases, we have been engineered to borrow for the privilege.
Vancouver and Toronto are metastatic and the back of the economy will break.
Few Canadians are comfortable with this outcome. The young can’t start their lives, all levels of government are cash starved, the “middle class” is borrowing its brains out relentlessly, and seniors, who should be spending their wealth like it’s 1999, are hunkering down and preserving every nickel they can.
Banks are doing exceptionally well though.
And the chief enabler of these resultant mutant earnings sits on the fence, doing sweet damn all, carrying on with a pure, business-first policy. This is not the solution to an economy that slides increasingly towards penury for the middle class. This trend has been picking up momentum since the GFC.
What will Canada’s debt economy look like in 2.5 years? 5? 10?
Vancouver rentals available galore on Craigslist
what happens to the owners / landlord hopefuls if they cannot fill the vacancy?
does the City make provisions for ‘we gave it our best shot and failed’?
Vancouver rentals are almost attractive again. It had to happen or the place would have died and sat empty like a Chinese ghost town. Those are all speculator owned but never occupied either.
Wow you’re so greedy Garth. You own at least one condo under a numbered corp in the city, while working people can’t find a place to live, and you think a tax on this kind of behaviour is a savages assault on your imaginary “property rights”. Tell you what, mr conservative, if you sneer at the word “society”, feel free to go to a place where centralized rule of law doesn’t apply and take for yourself whatever you can personally defend. Go to Somalia and make yourself sovereign over a patch of land. Not so easy, is it? You expect your corporations condos to be registered as yours by a registry, for the courts to defend your sole right to the property, you expect the police to protect it and evict whoever might be trespassing etc etc. And you want to be lightly taxed because… reasons? What for? To amass a slightly larger fortune to leave to your dog?
This blog used to be cool, now it’s just extremist political propaganda.
Excellent analysis, but don’t forget about irrational exuberance (overconfidence) and financial illiteracy (ignorance) as contributing factors.
#65 Linda
$20,000/yr isn’t bad, that’s $40,000/yr for a couple to get by on.Start researching Financial Independence and you will find a lot of people are bringing their costs down to this level and they aren’t homeless.
#51 Ex-Cowtown on 03.30.17 at 7:50 pm
Thanks for the Kulak quote. It’s interesting to read the history we (most of us) don’t know.
Snippets from Wikipedia:
“Stalin’s leadership of the total campaign to collectivize the peasantry meant that “peasants with a couple of cows or five or six acres more than their neighbors” were labeled kulaks”
“any peasant who sold his surplus goods on the market could be automatically classified as a kulak. In 1930 this list was extended to include those who were renting industrial plants, e.g., sawmills, or who rented land to other farmers”
“During the height of collectivization in the early 1930s, people identified as kulaks were subjected to deportation and extrajudicial punishment. They were often murdered in local violence; others were formally executed after conviction as kulaks”
Link:
https://en.wikipedia.org/wiki/Kulak
We’re back to discussing the economics of public goods and the free-rider problem. Oy!
#141 Millenial
I rent and probably will never own again as I see government looking at housing as the best way to tax wealth.It is getting harder for them to justify fees and raising income taxes but a percent here and a percent there on the rich homeowner will be accepted by the masses.
Funny how the media is whipping up the hysteria of FOMO and yet when you look on realtor.ca across Canada lots of inexpensive housing for sale and it’s not being snapped up by the wealthy foreigners(and you know that they are not making anymore land)
Also think that if land is so valuable like gold or a share of a company as extolled by the masses here on the blog why is that same commodity cheaper in Gatineau,Fredricton,Quenel than Vancouver or Toronto and why aren’t the masses who are priced out of the major centres snapping up the obviously underpriced assets knowing that like all the other major centres they too will soon have a meteoric rise in value(imagine going to buy gold or an index fund and finding out you can buy twenty times as much from an institution in Thunder Bay than in Toronto,but of course you buy it in T.O. and overpay for it in a bidding war)
Jungle on 03.30.17 at 8:15 pm
So what’s cheaper, paying 15k empty home tax or leaving the lights and tap on so they can’t tell no one is living there?
Also how (or who) is buying up 30-50 homes at one time and then flipping them??? That would take a lot of capital.
——————————————————————–
A co-worker went to a sales launch for a small subdivision of 30 home. All 30 were bought by 3 individuals, is what she was told when she got there by the sales staff.
Ford Motor Co. is seeking to limit the growth in long-term auto loans and leases in Canada, where consumers are twice as apt as U.S. buyers to stretch out payments to as long as eight years in order to afford a car.
—
Proof positive that people are idiots. They are only concerned about monthly payments. F, H and the sister at Queens Part all know that trick. It’s true that people are cash poor, they’ve already been cleaned out :2 land transfer taxes, plus hst on new homes and carbon taxes.
Right now Torry and Sousa are in a race to get yet another hand in voters pockets. Imagine the disappointment of finding the pocket has already been picked countess times by themselves.
Sousa, wins the hog contest: hst on new homes, land transfer tax, and now we’re paying him to dream up something new
Retail Apocalypse is here (in the US, that is. Canada still has some steam left). Look at the map in Manhattan, where 1 in 20 people are millionaires.
http://www.vacantnewyork.com/
#141 Millenial on 03.31.17 at 7:43 am
#118 Millmech on 03.30.17 at 11:55 pm
Another one percent increase in property taxes coming to a city near you.Once they are done with the empty house tax, they will move onto the million dollar house tax because all the millionaires can afford it and are priveleged.It won’t take long for this to happen once they realize the windfall they can get by getting people to turn on each other.
There is a great article on Financial Samurai titled stealth wealth, worth looking into and following as anyone who seems to have anything will probably have it taxed away in “fairness”.
**********************************************
Agreed. And it will eventually get extreme: tax if your house has a pool, tax if your house has a driveway and you don’t have to park on the street.
People have made a lot of money on real estate in recent years, and for them I’m happy. But the writing is on the wall: in the future (15/20 years from now) real estate will be more of a liability than anything else.
Just look at what’s going on in Chicago and Illinois: that’s the future for us all.
—
Next they will tax you for painting your fence: you’re obviously adding value, which in MPACs eyes is taxable, into perpetuity of course
Is it fair? No not even close. With all the subsidies housing gets this tax does not even start to level the playing field. Business tax is higher then residential tax. But what buisness can thrive on empty homes. So the people who live here get taxed more. Services need to be provided and maintained yet schools are emptied as people are forced to live further from their place of work. This puts stress on the roads which need to be increased due to the added traffic. New schools will need to be built as the existing schools sit empty. Water in the pipes goes stale due to lack of volume as a result of empty houses. This leads to higher chlorine levels and more flushing of the system and general maintenance due to higher corrosion. There are hundreds of other costs but you get the picture. Housings free ride is coming to an end, at least for empty homes, and it is about time.
#145 it’s already working on 03.31.17 at 8:20 am
Vancouver rentals available galore on Craigslist
what happens to the owners / landlord hopefuls if they cannot fill the vacancy?
does the City make provisions for ‘we gave it our best shot and failed’?
_____________________________
No. The cost of ownership that’s not utilized goes up. Presumably, those who own such properties ask themselves whether it’s worth keeping it empty, or keeping it at all. It’s a win-win for renters and buyers. The property either becomes available at reasonable rent or get’s sold to someone who is either going to live there or rent it out at reasonable rent. Being a speculator becomes more costly. Those against such a tax in the context of the housing mess in places like Vancouver and especially Toronto, are on the wrong side of the argument.
Hey if you think about it makes as much sense as all the carbon taxes. The earth is turning as it should so if we, the west, get taxed for the foibles of the east who continue to pollute heavily then it is only fair to make the rich of the east pay us in the west on another made up tax. Gotta get money out of the pockets to pay for all the social programs the minority think the majority need/want.
Yep makes as much sense as you think it does…
An empty promises politician tax would be great!
#2 TurnerNation on 03.30.17 at 6:52 pm
I’m getting into long term kaputs for Genworth – MIC.TO.
It too might get hit by sub-prime slime.
————————–
warning – gambling not investing question…
want to short a penny (tsx-v) stock that i may or may not know of.
pretty sure that there is zero chance of profitability
(or sales), ever.
it’s a VERY elaborate dog and pony show with a recently bloated 150+m mkt cap.
with a worthless product of vaporware.
no options available.
any tips on hypothetically shorting something like this?
of course this is only to be done with 6/49 money because it’s the opposite of bal/div/liq, the golden rule, of course.
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cool store.
a tiny suggestion, not every owner can afford (or will spring for)your designer organic gourmet imported premium (made to measure?)dog treats, but every dog should get a treat just because.
perhaps you already have a box of milkbones under the counter for the best friends of some of your more ‘ahem’ , frugal, or just regular income guests.
You are correct Garth. Never read the comments section, on your blog. What changed last 24 months? Governments.
This morning the province is set to officially announce it will match the federal government’s commitment of $2.2 billion over the next 11 years to fund the Broadway SkyTrain project
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i’m flattered!
and i only need 1% of that 2.2b, ya’all can keep the rest.
Garth
You blame the govt for this housing bubble and for not doing anything to control it. Then when they do you criticize them for it. You cant have it both ways!
This is not the fix. — Garth
@#24 I’m stupid
Lol, developers are irrationally greedy, more news @ 11.
A developer on another housing forum argued for weeks that the cure to high prices is municipalities giving developers public land for free. Mind you, while that reduced the developer’s costs the end product would still be sold at full market value. He was finally cornered into admitting the reasoning was devaluing the market by flooding it with excess inventory.
Makes sense until the lithium kicks in.
#28 DaleFromCalgary
I don’t know either, all of the metrics the government track are looking ill.
http://economicdashboard.alberta.ca/JobVacancies#alberta
A new poll out. If election held today in Ontario The Wynne regime would only get 7 seats wiping out party status,
Pot this on the fridge. They won’t win one seat come next year.
The goverment knows that a rental house or condo is a great investment and a pension for Canadians.Its gain say 4% to 25% a year.Our goverment wants their cut and needs it desperately because its flat broke.Whats wrong with that?
I have to agree with this tax, people need to live somewhere! Either Toronto will have to pay more for subsidized housing or put the onus on investors to let people live in their RE (which is it’s purpose in the first place). Plus I don’t see any rental buildings going up, only condos (Which are out of reach for many Toronto youth and families to purchase) which leaves them with the only responsible option of renting. If we allow these condos to sit empty (or be rented out to AirBnb) rents will rise, and Toronto will end up with the burden of high poverty/homeless rates (the wait list for Toronto community housing is about 3 years). Not to mention the brain drain of Toronto/Van youth having enough and heading south of the border. Why would an investor want an empty condo anyways? Does he want to be even more cash flow negative?
RE:128 Grayjayflyer on 03.31.17 at 3:09 am
Not that big a leap before governments start issuing mandatory residence permits that govern where you CAN live – e.g. X km from your location of principal employment. No job? Back to the village for you. Works fine in that country T2 admires so much…
*********
I use to live in a small Ontario town and I can tell you that you could only live X miles away from municipal town,to have insurance, Before a firetruck would come in case you had a fire at your house, otherwise you are on your own. That is for every thing, they tell you your home is in municipal town but the road to your home isn’t,
.
#151 The Technical Analyst, CSTA, CPD on 03.31.17 at 9:05 am
” So, if you live in Toronto and spend the winter in Vancouver in a condo which is then largely vacant for seven or eight months, you pay. ”
Can we use REALISTIC examples? Who the heck would WANT to live in Vancouver in the winter? Gawd. Rain, rain rain rain rain rain… cloudy day…rain rain rain rain rain rain rain
Ya, shoot me.
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come on , be fair, we’ve had at least 8 hours of sun in the last month or two!
MASSIVE layoff at IBM today, not covered by the US media: coldly referred to as a ‘Resource Action’
https://www.theregister.co.uk/2017/03/31/ibm_bloodbath_continues/
For those of you hoping for huge mortgage defaults in Canada, a quote from Doug Porter of BMO in the Financial Post today:
“So really, people are borrowing what they can handle – presuming interest rates don’t spike. And that’s a pretty big presumption.”
On a $500,000 mortgage, a rate jump from 2.5 to 4.5 would only increase monthly payments from about $2,200 to about $2,700. I don’t believe this will lead to a catastrophe and it’ll take three years for rates to get there.
The article also calls the debt to income ratio the Don Cherry of all economic indicators – everyone watches, nobody learns anything.
I don’t see where this Toronto crash everyone is talking about is going to come from. Prices will rise this year a horrendous 25% and then level off for the forseeable future. That’s about it.
This tax won’t do any good and if probably not fair.
On the other hand, this moment of time is unprecedented and completely different from RE crash in 80’s.
We are now facing with two external giant economies with 1/3 of the Earth’s population that have more millionaires than the whole population of Canada.
Influx of money won’t stop for decades.
Anyone who looks at the Canadian economy and our debt only, is missing the global picture.
Hopefully balanced portfolio will continue to produce results in the new reality.
Can you imagine? Being forced to accept somebody else living in your home? Where have we seen this before? Soviet Union perhaps, but not during Brezhnev or Gorbachev’s times, you’d have to go all the way back to Stalin… difference is, back then they’d be sending you to the gulag if you didn’t comply, now, if you pay the tax, no gulag – that’s progress.
#152
‘Also think that if land is so valuable like gold or a share of a company as extolled by the masses here on the blog why is that same commodity cheaper in Gatineau,Fredricton,Quenel than Vancouver or Toronto and why aren’t the masses who are priced out of the major centres snapping up the obviously underpriced assets knowing that like all the other major centres they too will soon have a meteoric rise in value(imagine going to buy gold or an index fund and finding out you can buy twenty times as much from an institution in Thunder Bay than in Toronto,but of course you buy it in T.O. and overpay for it in a bidding war)
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Um, have you been paying attention? All the communities surrounding the GTA, Vancouver and Victoria have seen massive increases in prices because of the spill-over and domino effect attributable to foreign capital, which breeds fear and greed, which prompts FOMO.
Vancouverite cashes out and moves to Victoria and buys house; that buyer cashes out and moves to Langford; and then the Langford seller cashes out and moves up Island. Foreign capital is part of this equation in all of these communities as well.
And that trend continues as it spreads farther in each direction. It may take a while for it to get to other places, but it will….unless it is stopped.
Soon you will hear about how Canada’s RE is disconnected from fundamentals like income – not just how places like GTA and Vancouver are disconnected from local incomes.
As T1 proudly boasts, Canada is, and will be, the first post-national state without any core identity. In other words, open for business to anyone in the world seeking our great social welfare system and a place for store their wealth in RE. Its a numbers game only.
And its not going to change….the gate is open, and the horse has left already. No turning this tide around.
I agree with Garth that owning a house/condo is not human right.
In capitalism (do we have that in Canada) I should be free to spend my money investing in 100s of houses and if my business model gives me a good reason, I should be able to keep them empty as long as I pay my property and utilities taxes/levies/bills.
Even if I keep them as a speculation and wait for the higher price, how is that different from buying a company stock (or ETF?) (yeah, taxes on proceeds are different but there is NO tax before you sell)
Re # 39 . Your combine income over 300K and you saved 1.5 mill in lust 10 years because you were renting . Me and my wife making 150K and we dont save we travel all over the world with over 2 kids , enjoyed over 4 bedroom home in a great neighborhood for the lust 9 year. Now if I sell I can pocket more then 1.5 mill (and we are emigrants as well ) So making twice less $$$$ we are much ahead of you thanks to home ownership . Long term renting is a loosing game and not so good life stile . ..
This creates far too many questions. What if you move out and rent a place to stay so you can renovate your house? If you don’t speed the reno job through in 6 months, will you be taxed? If rural communities jump on the bandwagon, then cottages will be fair game. Bye-bye Cottage Life magazine!
Yep, Garth, you’re right. Everyone in a hot market should rent and invest the rest.
People may have a right to housing. They have no right to real estate. — Garth
It is a reasonable expectation. No? In Canada will all that land and resources and little population?
As far as house is seen as investment, you are correct.
If seen as necessity I disagree.
#39 Toronto Renter
Refer to Ontario RTA (Residential Tenancies Act) – a landlord cannot force you to move if they want to sell the property. The new owners can force you to move if they want to use the residence for themselves or immediate family.
Google “tenant rights Ontario” or something similar – there is a lot of information available.
I don’t see any downside to this, and since when do conservatives like yourself care about fairness?
You certainly didn’t give a hoot about social justice in your past blog entries. In fact, you specifically said social justice isn’t a big concern of yours.
#172 Lee on 03.31.17 at 1:04 pm
I don’t see where this Toronto crash everyone is talking about is going to come from. Prices will rise this year a horrendous 25% and then level off for the forseeable future. That’s about it.
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The crash will come when prices begin to level off:
– The speculators are now driving the price increases. As prices increase at an ever accelerating pace, as they are now, more and more speculators are piling in, further accelerating price increases.
– At these prices, everything in the GTA is now cashflow negative as an investment property, which means that it only makes sense to buy to capture the appreciation.
– Once prices begin to level off, it will no longer make sense to buy as a speculative play or as an investment. Demand from the speculators will dry up.
– Speculators who have already bought, and are in a cashflow negative position, will begin to liquidate.
– Prices will begin to fall, causing more speculators to list their properties in order to either crystallize their gains or avoid losses.
– The combination of no new speculators plus existing speculators exiting will accelerate the decline, culminating in a panic induced crash.
#146 Boo on 03.31.17 at 8:22 am
Very accurate description of the most progressive part of the Canadian society, imagine what the regressive one looks like.
#172 Lee on 03.31.17 at 1:04 pm
On a $500,000 mortgage, a rate jump from 2.5 to 4.5 would only increase monthly payments from about $2,200 to about $2,700. I don’t believe this will lead to a catastrophe and it’ll take three years for rates to get there.
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Almost 50% of Canadians live paycheque to paycheque. How do you propose they come up with an additional $500 per month?
http://business.financialpost.com/personal-finance/debt/almost-half-of-canadians-are-living-paycheque-to-paycheque-with-finances-stretched-the-most-in-ontario-and-b-c
#181 When Will They Raise Rates? on 03.31.17 at 1:41 pm
#172 Lee on 03.31.17 at 1:04 pm
I don’t see where this Toronto crash everyone is talking about is going to come from. Prices will rise this year a horrendous 25% and then level off for the forseeable future. That’s about it.
–
It will be a system crash.
Reading this blog, like any other it seem, is like reading a bad fiction novel.
How long have you all been calling for a “great unwinding” or a correction?
The economic paradigm we adhere to is one of growth at all costs. We all know that is unsustainable. Yet our governments do whatever they deem necessary to stimulate growth as we demand it.
It can’t go on forever but in your lifetime… don’t expect any change. We’ll continue to kick that can down the road for our grandchildren to deal with. Selfish materialist dipshits that we are. }:-(
Credit Suisse has confirmed that it has had five of its European offices raided, issuing a statement saying ‘on March 30, 2017, Credit Suisse offices in London, Paris and Amsterdam were contacted by local authorities concerning client tax matters. We are cooperating with the authorities.’
The prosecutors, Netherland’s Fiscal Information and Investigation Service (FIOD), has not yet named the bank.
The FIOD is investigating 55,000 bank accounts and has seized assets including a gold bar, paintings, a luxury car and jewellery.
https://www.cchdaily.co.uk/90m-fine-credit-suisse-reverse-engineered-finance-metrics
SEC uses satellite imagery to unearth $3.3bn accounting fraud
ghosts without houses?
The US Securities and Exchange Commission (SEC) is to take enforcement action against Mexico-based homebuilding company Desarrolladora Homex, after deploying satellite imagery to uncover a $3.3bn (£2.68bn) accounting fraud relating to the fake sales of more than 100,000 non-existent homes over a three-year period
https://www.cchdaily.co.uk/sec-uses-satellite-imagery-unearth-33bn-accounting-fraud
==========
The proposed partnership was also seeking additional participants through a U.S. program known as EB-5, which provides residency permits to major foreign investors, according to the documents. In 2014, 90% of EB-5 permits were obtained by Chinese citizens.
Mar 30, 2017 02:15 PM
M&A
Kushner, Anbang Call Off Talks on New York Property Deal
By Zhang Yuanan, Zhuang Qiaoyi and Han Wei
=
UPDATE 1-China c.bank urges tighter mortgage checks, no fake divorces
http://www.caixinglobal.com/2017-03-31/101073205.html
These stories of some investor buying 50 homes to flip them.. even if they’re even true, the way they’re delivered still make them look just like propaganda in search of useful idiots to support policy changes that won’t benefit them in the end. Buying a project at whatever stage of completion is perfectly legal.. the builder for some reason found it profitable to free up capital quickly and sold – at a discount, you can be sure. Another investor is willing to tie up capital, buy at a discount and sell retail, for profit – of course. There’s NOTHING wrong with it.
When it comes to block sale of condos, the buyers should be educated and choose builders who limit the number of units sold to one buyer – you don’t want to own in a building that will be occupied mostly by renters. If most buyers of single units do that, there will be more builders who put in such limits – this will be good to protect your investment. Because you can be sure of it: once you cross on the other side and become owner, protecting your investment will suddenly become important.
#113 TRT on 03.30.17 at 11:32 pm
That makes no sense, unless you think you’re entitled to what others have earned. — Garth
No one ‘earns’ anything. People take advantage of others (poor workers in Asia) or make donations for benefits (Trudeau Foundation, BC Libs), etc. I’m surprised you don’t know that Garth being an Ex-Politico.
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Screw you, that’s a gross generalization.
I sure as hell earned what I have.
Yeah some of the tools we use might be made in China by underpaid workers, but how does any extra tax I pay to the government of Canada help those Asians anyways?
And how does that diminish all of the hard work I put into my company? Or the early years where each of my employees took home far more money than I did while I struggled to keep the company afloat working 12+ hours 7 days a week for nothing? Now that I’m successful you think I should give an even bigger chunk of what I have EARNED?
#181,
By the time they renew after a five year term, the principal will be about $430,000. So in fact, the monthly will be about $2450. That’s where $250 of it comes from. Also, wages do rise a bit year to year so a little more comes from there. The rest comes from smoking and drinking less, which is actually a good thing as this hypothetical person isn’t getting any younger. So even if rates double, don’t expect the sky to fall. My example assumes a first renewal utilizing a 25-year amortization period. Things will slow next year I’m sure. But I’d be surprised if prices drop more than ten percent.
#180,
Maybe.
#158 Pepito
Those against such a tax in the context of the housing mess in places like Vancouver and especially Toronto, are on the wrong side of the argument.
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Ah yes… “in the context of the housing mess” is the operative phrase, isn’t it? But taxes, once implemented tend to never go away. Take our ‘temporary’ income tax for example, implemented in war and never rescinded.
The software industry provides us with a good analogy. No code is ever thrown away, no matter how ugly, bloated and obfuscated it may become. It’s added on to (never streamlined) in the quickest way possible so that it barely meets ever changing specifications dictated by salespeople. Then it gets shipped so customers can test it for the developer. If they’re lucky, the developer will ‘update’ it. That means they’ll fix the worst of the bugs the customer reports if they get the time, but they probably won’t because they’re busy making new bugs.
Taxes are very similar. They are never taken away. They just rot on the vine when they prove too costly to enforce and new taxes are added. Then you end up with a tax code nobody is really sure how to interpret. My tax guy who once worked for the CRA says nobody there really understands the Canadian Income Act, a Gordian Knot of self-contradictory rules that Garth claims to have read in it’s entirely, the poor man.
Throwing out a new tax is the last refuge of incompetent politicians who are against the wall, often through years of inattention to a growing problem.
Meanwhile, we’re four weeks away from the province imposing its own market-dousing agenda as politicians react to a 30% surge in average prices, caused largely by speculative fever and house-lusty hormones. The budget seems likely to bring a tax on speculation and flipping plus a foreign buyer whack.
there is a provincial election May 9 in BC:
http://elections.bc.ca/2017-provincial-general-election/
what could go wrong? the Liberal Party of BC could lose
it seems to me, the obvious strategy for the Liberal Party on Ontario would be to wait to see what happens in BC.
It is pure communism when they tell you what you can and can’t do.
Pretty soon they will be telling us that if we don’t rent out vacant land then there be a tax.
In Pickering for instance my cousin has a 10.5 acre land vacant and pays $6,200 a year in property taxes.
There is only garbage pickup but no city water hooked up. It is all well water there.
Ontario’s Sunshine List of top salaries for public sector grows by 7%
“The annual Sunshine List of the top-earning employees in Ontario’s public sector has grown by 7 per cent, with more than 123,000 people paid more than $100,000 last year.”
http://www.cbc.ca/news/canada/toronto/sunshine-list-2017-ontario-salaries-2016-1.4037987
I thought about it for 15 seconds and came up with the easy way everyone who wants to will beat the idiotic vacancy tax.
Have friend/family member sign a lease agreeing to rent your place for some nominal amount, a couple hundred a month (easy to argue that the renting was forced and so they had no choice).
Write off property taxes and other maintenance and repairs equal to same ‘rent’ received.
Pay no tax, no penalty, no one needs to ever enter the apt.
But bureaucrats are so stupid they can’t even see how easily stupid laws can be bypassed.
#121 Spaccone yup happened to me few times. And to Yorkville renter too.
Issue re occurred even after I switched cell phone providers fyi.
I just bought a 2nd property. More fore a long-term retirement downsizing option, but to be rented out in the mean while. All everybody is hoping for is for it to go up a few months or a year where a paradigm shift happens (good buy 600K housing days) where even if it were a pullback, you’re still up.
Keep em fools coming and load up on the debt and risk to inflate values just long enough please. We live in a fiat monetary inflationary system that has more vested parties than ever before. Monopoly money. Real Estate is a great hedge.
#147 Reply to Schlim
Excellent analysis, but don’t forget about irrational exuberance (overconfidence) and financial illiteracy (ignorance) as contributing factors.
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I agree completely. The current bubble is a result of human stupidity which has been enabled and encouraged by market intervention.
It was relatively easy to see that 2007 was going to mark the beginning of the end of the US housing bubble. I remember reading articles as far back as 2005 demonstrating how many adjustable rate mortgages were scheduled to reset in 2007. It was a very obvious catalyst.
The time around I just don’t see the catalyst yet. The bubbles may continue until they collapse under their own weight.
Thanks for the kind words guys.
#166 Smoking Man on 03.31.17 at 12:17 pm
A new poll out. If election held today in Ontario The Wynne regime would only get 7 seats wiping out party status,
Pot this on the fridge. They won’t win one seat come next year.
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Fingers crossed!
I’m not sure where 65,000 came from (maybe Vancouver?). Toronto’s number came in just under 100,000 according to the last city report.
However I don’t know how accurate they can be with condos. In my building water and electricity are paid for in the monthly maintenance with no individual metering so there’s no way it can be used to estimate occupancy.
Shouldn’t the field be called economysticism, and the practitioners of these black arts be called economystics?
And do we now have two economystics in our midst? I hope that’s not a trend. (No offense.)
You wrote, “Has the world gone mad with debt? Who are the greater fools again?”
Compounding operates very much like gravity: Both forces seem indetectable at first, but over time become unstoppable. Be patient.
(For example, 99% of Buffett’s wealth was earned after his 50th birthday.)
http://www.marketwatch.com/story/from-6000-to-67-billion-warren-buffetts-wealth-through-the-ages-2015-08-17
Oh, and for you physicists and economystics out there who are about to tell me that gravity is not a force between masses, but instead an effect of the warping of space and time in the presence of mass, you win (and I surrender)!
#194 Natrix on 03.31.17 at 3:24 pm
We live in a fiat monetary inflationary system that has more vested parties than ever before. Monopoly money. Real Estate is a great hedge.
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It’s also a big, fat, juicy source of tax revenue for over-indebted governments, is immobile and can become illiquid in a falling market. Look no further than Greece to see what may lie ahead for Ontario property owners – Greek parents have a joke that goes something like “If you don’t smarten up, I’ll leave you the house!”
A better hedge would physical Au and Ag.
This will only get worse in Alberta and its coming to Toronto. Its all a house of debt.http://www.cbc.ca/beta/news/canada/calgary/conference-board-alberta-insolvency-rates-bankruptcies-calgary-edmonton-consumer-business-1.4049820
“If you own a condo which is on the rental market and you can’t find a decent tenant”
The rental market in Vancouver and Toronto is ridiculous. If your place is decent, you’ll receive tons of interest from highly qualified candidates looking to rent.
I have no sympathy for the empty condo owner. Rent it out, or pay more tax.
Ontario Sunshine List came out today. Amazing how many Toronto police constables make over $200,000 per year. These are people who will also retire on $140,000 per year pensions at 55. There is something bizarre about this.
#202 Simone on 03.31.17 at 4:44 pm
“If you own a condo which is on the rental market and you can’t find a decent tenant”
The rental market in Vancouver and Toronto is ridiculous. If your place is decent, you’ll receive tons of interest from highly qualified candidates looking to rent.
I have no sympathy for the empty condo owner. Rent it out, or pay more tax.
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Hey Simone
You have a rental? didn’t think so!
Empty home tax.. necessary or not… not sure, but something must be done to ensure people have affordable housing. What are tenants to do when they face double digits increases? Buy? In this market? Insane. Keep renting and getting evicted each year because speculators are flipping condos for more profits? It’s seems like people of Vancouver (and Toronto) are finding themselves between rock and the hard place… Government is to blame for allowing speculators to go unregulated and untaxed. The same Government should go after speculators, tax them, fine them.. whatever. For people who have second property in town to use it less or more of 6 months – leave them alone.
Also, housing is a necessity and I agree that rent increase controls should be in place to some extent. Imagine you left something like healthcare or transit to market forces. All these people who work for minimum wage (or up to $15/hr) in Vancouver/Toronto should be protected from evictions, rent increases. As they are most vulnerable members of our society and do the work others will not do. Also, if those very people become so poor that they cannot lead comfortable life in our city, the crime will rise, and instead of 3 homeless people on my way to Urban Fair in the heart of Yaletown, there will be 10 of them soon. Just remember, there were none there 10 years ago. It’s getting worse…
@ #206 Vancouver on 03.31.17 at 6:29 pm
A two tier system of treatment is never a good idea. Next thing you know, millionaires with “zero income” are going to be taking advantage of these rules.
#204 Paul on 03.31.17 at 6:01 pm
Hey Simone
You have a rental? didn’t think so!
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Hey Paul,
Have you tried to rent an apartment in Vancouver or Toronto lately? Didn’t think so!
I’m not a landlord, but I just subleased my apartment. I received over 50 inquiries from highly qualified professionals in less than a week.
The rental vacancy rate in the City of Vancouver is 0.6 per cent. If you have a moldy apartment and have the brain capacity to post a Craigslist ad, you can be a landlord!
#148 Millmech: note that $20,000 is before tax. Yes, income tax does apply. Second, the presumption is that a couple will each receive $20,000 in aggregate CPP/OAS. Maximum CPP is achieved by very few people. In order to get it, you must contribute 39 out of the 47 years between the ages of 18 & 65 & contribute the maximum for all of those 39 years. The vast majority of people receiving CPP get around $600 – gross, not net – per month. That is $7,200. That plus OAS is approximately $14,000 gross income per annum. Yes, one pays very little tax on such a low income but – what is the average rent for a one bedroom apartment where you live? If you own your home, how much are the annual utilities & property taxes?
As for the putative couple, what happens if they split up or one of them dies? Since the government will only pay out the maximum for a single person you do not get your ‘full’ CPP & your partner’s too. If by some chance you both qualify for ‘full’ CPP the death of one means the survivor gets not one dime more.
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/cmpltng/menu-eng.html
https://www.youtube.com/watch?v=JveOq_Zbt1M
Whew! Canada is truly turning into a socialist crap hole! Not that the US is doing much better. Both countries are on their way to well deserved bankruptcy (or sky high inflation, which is what you get when you paper over bankruptcy with money printing).