Delusional

Gerald is a psychiatrist, semi-retired. “So,” I said last week, mocking him, “how does it make you feel, Gerry? Angry, hurt, bitter, resentful? Let it all out. You can share with me, in this safe space.”

“I’m pissed,” he said. “Now knock it off.”

We were talking about Comrade Premier Horgan’s plans to steal $3,600 from his retirement nestegg in 2019, and then $9,000 annually thereafter. You see, Gerald has a small practice and a condo in Calgary (where he is licensed), but spends about eight months a year at his place in Kelowna. He and Debra bought it in 1998 (she passed two years ago) for just over $400,000. Now BC Assessment tells the doctor it’s worth a tad more than $900,000.

“But that’s not my fault,” says the doc. “I can’t help it if the market goes up. How does that possibly, in any way, shape or form, make me a speculator?”

So here’s the problem. In days BC will legitimize a ‘speculation tax’ designed to Hoover money from people who own a second property in major populated/tourist areas. They can be BC residents who have a vacation home or any owner with a principal residence in Alberta, Ontario (or anywhere else in Canada). And those evil foreigners, of course, who already have to pay a 20% head tax for the right to purchase in the province.

The lefties running the government in Victoria are adamant, doctrinaire and ideologically insufferable. “There’s a housing crisis in British Columba,” says the finance minister, Carole James. “The public wants us to address it. It’s going ahead.”

Despite that, most local politicians are apoplectic. Nanaimo, Kelowna, the Local Mainland Government Association, as well as the local business organizations, are warning that this could be a kiss of death for development. The message it sends to guys like Gerry is clear: Bug off. You’re a second-class citizen. You will be penalized for investing in our community.

The rationale is that by forcing people with two houses to bail, or rent them out (for at least six months a year), house values will fall and affordability rise. Half right. The entire market will be brought down, equity for everyone will diminish, recent buyers will be crushed, and prices will fade. But that doesn’t mean homeownership will rise, since sales always collapse in declining conditions. It’s already happening, with Vancouver transactons at the lowest point in decades.

The tax is punitive. In 2019 it will be 0.4% of the assessed value of a property, rising to a full 1% the next year for out-of-province owners and 0.5% for locals. (Non-Canadian owners, or even Canadian citizens who belong to ‘satellite’ families, will pay a huge 2%.) To avoid it, owners have to sell (good luck with that) or rent for at least half the year (good luck finding part-time tenants).

“I stay in my place way more than half a year,” Gerry tells me. “It’s my spiritual home – the place I will retire to in five or six years. Renting it with all my stuff in it for six months is a joke. So this tax is extortion – taxation without representation. Arbitrary. Pure discrimination.”

Of course. This is also an envy tax. A levy on wealth since in BC, owning land/property/house is equated with being rich. The place is now run by a government doing nothing about true speculation, flipping or unearned capital gains, instead applying classic leftist logic to a social problem: tax the poop out of it.

So the speculation tax will join the foreign buyer tax, the Van vacant homes tax and the luxury property tax in a concerted government effort to crash the real estate market. This is concurrent with the mortgage stress test, rising mortgage rates as bond yields spike, and at least three looming Bank of Canada interest rate increases. No wonder sales have tumbled across the province and prices have already been pared by a third in areas like the tony Westside. Now average homeowners across the Lower Mainland, in the Okanagan and on the Island can also see their equity sucked off.

The dipper retort: “When a property owner holds onto vacant homes and benefits from rising property value, that is speculation. This behaviour is taking homes out of the housing market, driving vacancy rates lower, and making it harder for British Columbians to find a place to live.”

Of course Gerry’s house is not ‘vacant.’ He spends months there. Pays local property taxes, plus feeds more into the pockets of neighbourhood utilities, repair guys, gardeners and merchants. He has no kids in local schools and consumes no healthcare. But he pays for it. And if his house rose in value, well, he had no hand in that. Mr. Market did it. He took no taxable gain, and the market may well erase the increase. Finally, how many locals are there who want to spend $900,000 on a house in Kelowna and can’t buy one now? There are 110 for sale at the moment in exactly that price range.

Apparently most BCers support this delusion. But that won’t last too long.

About the picture...

“I spotted this pup at the wheel of a cargo van in Calgary the other day,” says blog dog Chris, “and thought it might make a good potential blog post image for one of your articles. Thanks for all your continued knowledge-sharing and investment advice. Your blog is a daily read for me and has been a tremendous resource and source of entertainment. Give my regards to Bandit!”

215 comments ↓

#1 For those about to flop... on 10.07.18 at 5:37 pm

. “Now BC Assessment tells the doctor it’s worth a tad more than $900,000.”-Thor Turner.

Less than assessed.

Just came across this recent sale while looking at another case and the discrepancy between the two numbers caught my eye.

Thought I’d pass it on for all the assessment watchers out there.

The details…

5240 Lancing Road ,Richmond

Sold in June 2018 for 1.57

Originally asking 1.78

Assessment 2.18

So they didn’t even try to get anywhere near the assessed number from the start, and it ended up going for 28% less than assessed.

The boil in Vancouver real estate has been lanced…

M44BC

#2 Dave on 10.07.18 at 5:45 pm

Mr. Market took a decade too long to correct…now no one in BC cares. Reduce pricing at any cost, too much anger has led to shallow thinking

#3 somedude531 on 10.07.18 at 5:49 pm

I just really don’t have any sympathy for these people. The NDP ran on addressing the housing problem. They told people more than a year ago they were introducing these taxes. It’s not like they sprang them on people with no notice.

No, taxing is not a perfect solution but when the BoC leaves rates as low for as long as they have and the fed’ govt does everything they can to increase demand for housing what are provincial politicians supposed to do? Sit by and do nothing while the problem gets worse and worse? This is the problem with the ‘rugged individualism, laissez faire, let the free market decide, libertarianism’ that we get from this blog.

Don’t believe me? go on craigslist in the vancouver area and see what $1500 1 bedroom gets you. Let me know if you can even find one.

#4 Old gringo on 10.07.18 at 5:56 pm

Unfortunately, this is just another government tax grab, exploiting its citizens.
This money will be used to hire more government workers and fund their pensions.
Grab the easy money and run!
Sad but true

#5 Millmech on 10.07.18 at 5:58 pm

He sells for 900k rents a beautiful house for the 5k a month it spins off per month. Good luck selling though over 90 new listings in Penticton this week alone and more coming next week lol

#6 AGuyInVancouver on 10.07.18 at 6:02 pm

It stands to reason you can’t see the reason for the tax Garth. You’ve expended so much effort denying foreign buyers are a problem that you can’t see this is the only way to capture revenue for BCers from property owners who don’t pay any form of income tax, or when they do, it’s pennies paid on income from social benefits Canada is stupid enough to make them eligible for. The relatively little they paid on standard property tax went nowhere near covering the cost their buying had done. Social housing is expensive and thanks to foreign buyers BC and Vancouver are now having to build it for professionals, just to keep the locally economy viable.

Gerry is quite welcome to start a practice in Kelowna and the leave the snowbound hell of Calgary behind, why wait 5 years?

#7 Fred Jones on 10.07.18 at 6:02 pm

Wow. i get to be first, again. Second time in my life.

#8 Muttley O'Toole on 10.07.18 at 6:05 pm

From here it looks like Comrade Premier Horgan should be named after your dog Garth .

#9 georgist on 10.07.18 at 6:08 pm

Great stuff. Poor guy, two homes – one his “spiritual” one. Having to have just one home.

Meanwhile families are crammed into apartments.

Garth you are peddling something that doesn’t match reality here.

Do markets clear or not? If prices fall enough they will clear. If they don’t and transactions severely fall, those staying in the market now have a cost of carry. Before they didn’t have this, that’s why the housing market is such a popular place to “invest”.

They will clear, price discovery will occur. That’s how markets work. Let the market work with the correct pricing system, which is that those with two “homes” should pay for the privilege through the nose.

#10 Johnny on 10.07.18 at 6:09 pm

1% is a lot? Sorry, most US cities have property taxes over 1%. B.C. property taxes are way too low.

Homes are not investments. If you want to invest buy an ETF or AAPL. Why anyone would want to “invest” in RE where jealousy can destroy your wealth and liquidity at a whim is beyond me. And as for tenants? Being a landlord is way more work an hassle than it’s worth.

This is not a property tax. It’s a surtax. – Garth

#11 Figure it Out on 10.07.18 at 6:13 pm

Spends more than six months a year in BC? Simple — declare the BC property to be his primary residence and file as a BC taxpayer. Lemme guess — you don’t like that idea either.

It’s a terrible burden to be a man of property.

#12 WIN not Lose on 10.07.18 at 6:17 pm

Will renting it out to AirBnB people help?
Should cover the taxes being imposed by the lefties?

#13 akashic record on 10.07.18 at 6:18 pm

It’s a stupid, unjust tax but, I don’t see any appetite to rally on the streets to fight for multiple property owners.

Multiple property owners just have to suck it, like mortgage holders will have to suck up higher rates.
Nobody forces anyone to own.

#14 YVR 60% crash on 10.07.18 at 6:24 pm

Well Gerry! If you don like it just bug off.
The speculation tax should be at least 5%. Just tax the poop out of it.
You’re too soft honourable John Horgan.

#15 Watcher on 10.07.18 at 6:27 pm

Please do not say that ‘most BCers support this delusion’. The powers that be are not there with a mandate from the voters of British Columbia. They are advancing their agenda as quickly as they can, because they know that the moment this little charade is over and the voters go back to the polls, they will be eradicated from power for a generation. Go ahead Dippers. Do your worst. Tick tock.

#16 Rosie McLeore on 10.07.18 at 6:29 pm

First!

#17 BobC on 10.07.18 at 6:40 pm

Unbelievable. Was that voted in or crammed down the people’s throats by politicians?

#18 When Will They Raise Rates? on 10.07.18 at 6:46 pm

We were talking about Comrade Premier Horgan’s plans to steal $3,600 from his retirement nestegg in 2019, and then $9,000 annually thereafter.

Pure theft, plain and simple.

#19 Vampire studies on 10.07.18 at 6:48 pm

Isnt this Gerry’s principal residence? I know lots of people have their home here but work in Alberta.

Many professionals must have principal residences where they are licensed. – Garth

#20 Steven Rowlandson on 10.07.18 at 6:49 pm

Making life and reproduction unaffordable or impossible for any group in whole or in part is genocide under international law. PC, personal choice, market forces, or desire for tax free profits is no defence. Real estate is a place to live. It isn’t an investment or a GD lottery ticket with a guarantee to win the jackpot.

The real estate market is genocide? You need help. – Garth

#21 FOUR FINGERS WATSON on 10.07.18 at 6:51 pm

So the speculation tax will join the foreign buyer tax, the Van vacant homes tax and the luxury property tax in a concerted government effort to crash the real estate market.
………………………..

You forgot to mention the upcoming carbon tax on pot. It’s gonna be yuge !

#22 Swanson on 10.07.18 at 6:53 pm

Isn’t home ownership something like 70%? For many, their property is their sole asset. For some, they borrow against it. Some even borrowed to “double down” (home reno or additional properties).

And yet the same people are cheering for something that will make them poorer, all in the hope of sticking it to some foreign buyer boogie men?

#23 RGeezie on 10.07.18 at 6:58 pm

No sympathy for Gerald and his ilk; I’m a conservative and want government out of my business for most things but the current state of housing is an exception. I am losing out on potential employees because they can’t afford to raise a family in BC any more. Gerald should sell at market prices, invest the proceeds and stay at The Grande like I do when visiting Kelowna. Doing so will help the local economy as well as return housing stock to be purchased by locals.

What’s preventing your employee from buying one of the 110 similar houses now for sale in the same town? How does taxing this Albertan unfairly help your business? Weird conservative. – Garth

#24 Stone on 10.07.18 at 7:15 pm

We were talking about Comrade Premier Horgan’s plans to steal $3,600 from his retirement nestegg in 2019, and then $9,000 annually thereafter.

———

Every day, I am ever thankful for my highly liquid, income generating, balanced and globally diversified investment portfolio.

So, why do people continue to throw their precious money into silly things that require expensive maintenance and get taxed continuously?

By the way, I found a toonie in the parking lot of the local grocery store today. Wasn’t too shy to pick it up and put it in my pocket. People seem to be very careless with their money. Thanks careless people who make bad decisions.

And then they wonder how the 1% become the 1%.

You do realize even the 1% get a high finding a lonely toonie just lying there in a parking lot.

#25 We'll Soon See Who is Swimming Naked on 10.07.18 at 7:16 pm

Wow! Finally the slumlords will be identified and have to pay their fair share of taxes and fees. Excellent!

#26 Lead Paint on 10.07.18 at 7:22 pm

It is inevitable that governments will start to tax home ownership, the largest reserve of wealth in the country. It’ll start on second homes worth over X million, but over the years it will apply to more and more residences.

#27 somedude531 on 10.07.18 at 7:29 pm

I’m in favor of progressive property taxes. People have all kinds of tricks to hide their income but good luck hiding that 4 million dollar house. Deduct the tax against income earned.

#28 FOUR FINGERS WATSON on 10.07.18 at 7:30 pm

If BC had electoral reform and a system like or similar to that of say France, the Greens would have been eliminated in the first round and the final runoff would have been LIB vs NDP which would have resulted in a majority for one of those two parties. The NDP might not be in power. The Green Party would not be holding the NDP hostage and a pipeline might be happnin’.

https://en.m.wikipedia.org/wiki/Two-round_system

#29 OttawaMike on 10.07.18 at 7:30 pm

Thought the gist of this blog is that owning housing isn’t a right?

The shrink should sell and invest in a balanced portfolio then rent in the Okanagan. I really think this is a first world problem much like this mural that a concerned citizen objects to and demands immediate removal here in Ottawa:
https://www.cbc.ca/news/canada/ottawa/sara-may-bulldog-imelda-arpi-hintonburg-bylaw-1.4852691

#30 Lorne on 10.07.18 at 7:31 pm

#15 Watcher on 10.07.18 at 6:27 pm
Please do not say that ‘most BCers support this delusion’. The powers that be are not there with a mandate from the voters of British Columbia. They are advancing their agenda as quickly as they can, because they know that the moment this little charade is over and the voters go back to the polls, they will be eradicated from power for a generation. Go ahead Dippers. Do your worst. Tick tock.
……….
You might be surprised how the people of BC actually feel about their Premier (unlike you and Garth):
https://www.cbc.ca/news/canada/saskatchewan/poll-popular-premier-saskatchewan-scott-moe-1.4714926

#31 Gross on 10.07.18 at 7:32 pm

You sir are gross.
The fact you’ve constantly using the term” head tax ” is an abomination.
It’s extremely disparaging and offensive not just to Chinese Canadians but to all the people of Canada.

I find your underlying message to be full of hate and aiming to devide our people as a nation!

Who let Horgan in here? Need a new moat… – Garth

#32 Mean Gene on 10.07.18 at 7:39 pm

Hmmm, designate the Kelowna condo as his principle residence and the Calgary sky box as the secondary residence?

#33 FOUR FINGERS WATSON on 10.07.18 at 7:44 pm

What’s preventing your employee from buying one of the 110 similar houses now for sale in the same town? How does taxing this Albertan unfairly help your business? Weird conservative. – Garth
…………………………….

Those 110 similar houses in the 900k range ? Not too many people who live and have to earn a living in Kelowna can afford 900k.

Then why boot the doc out? – Garth

#34 TurnerNation on 10.07.18 at 7:51 pm

Time for the Buy or Rent game.
But first an important message to please spay and neuter your blog dogs.

Pick up this ho-hum urban townhouse for an eye popping $1,600,000:

https://www.realtor.ca/Residential/Single-Family/19914000/488-KING-ST-E-Toronto-Ontario-M5A1L8-Moss-Park

Or…Rent it to the tune of a monthly $4500

https://www.realtor.ca/Residential/Single-Family/19967737/488-KING-ST-E-Toronto-Ontario-Moss-Park

…………….

But what is $4500 each month? Is is equal to an $800,000 mortgage 25/3.35% plus $4500/yr in taxes plus a $2500/yr repair budget.

Final answer: this townhouse is overpriced by $1,000,000

#35 Remembrancer on 10.07.18 at 7:58 pm

#25 We’ll Soon See Who is Swimming Naked on 10.07.18 at 7:16 pm
Wow! Finally the slumlords will be identified and have to pay their fair share of taxes and fees. Excellent!
——————————————————————

Huh? Though not at all the point of tonight’s blog, “Gerry” like your slumlords, is already paying taxes and contributing to the local economy – what is a fair share then?

#36 Remembrancer on 10.07.18 at 8:01 pm

#26 Lead Paint on 10.07.18 at 7:22 pm
It is inevitable that governments will start to tax home ownership, the largest reserve of wealth in the country. It’ll start on second homes worth over X million, but over the years it will apply to more and more residences.
—————————————————————-
Wow a tax on property, brilliant! Lets call it, um, property tax! Oh wait, that’s already taken b/c its already done… What about sales at time of transfer? Land transfer tax maybe?

#37 Vampire studies on 10.07.18 at 8:02 pm

32 Mean Gene – it might be too late now as that could be deemed a sale and trigger tax on a $500k gain.

I think he got some bad advice (or none at all).

#38 Dolce Vita on 10.07.18 at 8:07 pm

How can it be his retirement “nestegg” if he plans to retire and live there?

Once he retires, sells his Calgary condo and lives in Kelowna he will no longer pay the speculation tax (per your BC Spec Tax definition).

NDP housing affordability campaign promises. Got voted in. Doing what they promised. Tune into the YVR Mayoral race. Same campaign promises, this time, by near every candidate.

People aren’t as stupid as you think they are (i.e., cheering on spec. taxes on additional property owners while not realizing their RE asset value prices will go down because of this, in part).

Have a care with smugness and superiority.

Tony Westside bellwether RE prices down by 1/3 you admit; hence, the result of all your anti-BC NDP, anti-tax, anti-this, anti-that, drivel today is that:

It’s working.

It wasn’t before the NDP…how irritating.

#39 Cristian on 10.07.18 at 8:10 pm

“You will be penalized for investing in our community.”

That is BS. Buying a house does not mean investing in a community. Investing in the community means doing something that helps creating jobs in that community, improve the infrastructure, services, etc – not buying a house for yourself!
And the good doctor may move his practice to Kelowna, I assume they must have their fair share of loonies there.

Locals paid because of home ownership: real estate agent, insurance broker, bank loans officer, movers, landscapers, the seller, painters & renovators, fuel oil guy, local utilities, and everyone in the community using services funded by property tax. – Garth

#40 Remembrancer on 10.07.18 at 8:16 pm

#29 OttawaMike on 10.07.18 at 7:30 pm
Thought the gist of this blog is that owning housing isn’t a right?

The shrink should sell and invest in a balanced portfolio then rent in the Okanagan. I really think this is a first world problem much like this mural that a concerned citizen objects to and demands immediate removal here in Ottawa:
https://www.cbc.ca/news/canada/ottawa/sara-may-bulldog-imelda-arpi-hintonburg-bylaw-1.4852691

—————————————————————
As a long time reader, personally the gist of this blog to me has been owning housing is not a right if you can’t afford it / do so by putting so much of your capital into it the you are totally enslaved by it… Otherwise I think you may mean something from the Stalinist subpage on some Marxist-Leninist blog somewhere…

Actually a vexatious state making a punitive seizure of capital or property is, short of eminent domain examples, is a fairly non-1st world problem…

Points for the bulldog mural though keeping with canine theme – well played sir.

#41 Lorne on 10.07.18 at 8:19 pm

#28 FOUR FINGERS WATSON on 10.07.18 at 7:30 pm
If BC had electoral reform and a system like or similar to that of say France, the Greens would have been eliminated in the first round and the final runoff would have been LIB vs NDP which would have resulted in a majority for one of those two parties. The NDP might not be in power. The Green Party would not be holding the NDP hostage and a pipeline might be happnin’.

https://en.m.wikipedia.org/wiki/Two-round_system
……….
That is a pretty big “IF”! Have not heard anyone suggest the “Two Round system” for Canada or BC. Interesting that France is one of the few countries in Western Europe that does not use PR….and they all seem to be doing just fine. As well, it would be hard to believe the 17% of the voters who voted for the Greens would be likely to instead vote Liberal….more than likely NDP….and, you may have noticed, they are not in favour of the pipeline as presented.

#42 Active on 10.07.18 at 8:27 pm

Not hard to bypass the spec tax. Sign a fake lease and make sure a “rent” payment is deposited on the 1st of each month. There, done.

Fraud. Criminal. – Garth

#43 Stone on 10.07.18 at 8:27 pm

#35 Remembrancer on 10.07.18 at 7:58 pm
#25 We’ll Soon See Who is Swimming Naked on 10.07.18 at 7:16 pm
Wow! Finally the slumlords will be identified and have to pay their fair share of taxes and fees. Excellent!
——————————————————————

Huh? Though not at all the point of tonight’s blog, “Gerry” like your slumlords, is already paying taxes and contributing to the local economy – what is a fair share then?

———

Gouvernments will find any excuse to bring in new taxes. This was just an excuse to do so and they found a way to convince voters to accept it. Nothing else. Gotta give credit to the BC gouvernment to be smarter than the average bear. This is simply just another consumption tax.

#44 yvr_lurker on 10.07.18 at 8:33 pm

#3 #6 #23 have echoed my sentiment completely. No need for me to chime in on what I would normally say on this subject. Prices need to come down in order to have viable communities for the next generation of citizens, for businesses to recruit and then retain employees at all levels, and for the marginalized to at least find some housing solution (not 1500 per month studios in YVR). This person’s problem is regrettable, but there is a much broader landscape that needs to be addressed.
How many households are there in YVR in particular, where the reported annual income is a pittance, and they are living in 3M+ houses, with either the house vacant, or have occupants using up medical services, going to schools etc.., and the main breadwinner working overseas shielding all earned income from the CRA to contribute to the payment of these services. A 1-time transfer tax for a house purchase is not sufficient in my view. These “low-income” households in exclusive neighborhoods are not simply retirees who won the housing lottery by selling door-to-door avon supplies in the 1970s.

#45 Fish on 10.07.18 at 8:36 pm

BDO Canada
TAX ALERT – ONTARIO CUTS SMALL BUSINESS TAX RATE

https://www.bdo.ca/en-ca/insights/tax/tax-alerts/ontario-cuts-small-business-tax-rate/

#46 Fish on 10.07.18 at 8:40 pm

Reg. 224/09: TAX RATES

https://www.ontario.ca/laws/regulation/090224

#47 Marcus on 10.07.18 at 8:46 pm

What a bunch of rubes! I cannot believe that Canadians have become this stupid. How the hell did you guys become such pushovers? Own a house for years as a vacation destination and then the govt one day says you will be penalized as a speculator? LOL! You deserve what you get for voting in these crooks.

#48 Spectacle on 10.07.18 at 8:48 pm

FOUR FINGERS WATSON on 10.07.18 at 6:51 pm
So the speculation tax will join the foreign buyer tax, the Van vacant homes tax and the luxury property tax in a concerted government effort to crash the real estate market.
………………………..

You forgot to mention the upcoming carbon tax on pot. It’s gonna be yuge !

——-………….———…………———–………….

To say nothing about the thousands of tons of burning pot contribution to Global warming, or is it called climate change……

How about a “drug smokers” tax, like “shop supplies” added at your auto repair shop? To fight the weather changes .

#49 Ace Goodheart on 10.07.18 at 8:48 pm

https://news.sky.com/story/banksy-painting-girl-with-red-balloon-self-destructs-after-1m-sale-at-sothebys-11518809

We bought a number of these, including the one with the tribesmen attacking the shopping carts. Of course we paid very little (the shopping cart one we got for under a hundred pounds). Interesting to see how much they go for now. Kind of predictable back in the day, when everyone was like “where will the next Banksy pop up” and we were like “you don’t have to really wait, you can just pick up his stuff for peanuts.

He did this stunt back in the day, printing fake bank notes and then having them fall on the heads of people at a market in the UK. At the time, shop keepers were pissed right royally at this, as a bunch of fake bank notes ended up in their tills. Now the fake notes are worth far more than the real ones, if you can find them.

I applaud this dude. He never had any interest in making money off his stuff (sold it to us for almost nothing). Instead of capitalising on his new found fame, he shreds it.

Some men want success. Some want love, some want power. Some just want to see the world burn. And some, well, they find truth and freedom, and then they give it to us, for free, and fight against any attempt to profit off of it.

#50 georgist on 10.07.18 at 8:51 pm

> Thought the gist of this blog is that owning housing isn’t a right?

For me it’s a huge contradiction. Conservatives want to have a dynamic, meritocratic society to bring about greater wealth for all. Then they turn around and argue for a rigid society, divided by whose parents and did and did not own land. With no cost of carry, no inheritance tax.

We had this under feudal times. Proponents of feudalism designed a society just like this. And it worked.

Why not tax land, not labour? Some conservatives might answer honestly: because I want to lord it over people without working!

#51 Millmech on 10.07.18 at 8:51 pm

Yet when real estate collapses no one will be buying it because it will be perceived as a terrible investment and will be told stories of people who lost their life savings buying real estate and only a fool would buy it now.
Then it will rise again and people will whine about missing out again for another generation, seen this happen before.

#52 Ustabe on 10.07.18 at 8:52 pm

Back in the day my businesses were labour intensive…one of the first things I let any new staff know is that they were to bring me solutions, not problems.

Don’t just dump a problem in my lap, present me with the issue and your solution. This caused the staff to hold conversations, drill closer to what really was the issue and often come to consensus on a way out.

So, Garth, you have dumped the problem…what is the solution?

I don’t offer one because I live out in the back of the beyond quite comfortably and don’t really give a poo.

The market was rolling over before the NDP took power. These are just excuses to tax. – Garth

#53 crowdedelevatorfartz on 10.07.18 at 8:54 pm

Surtax, speccer tax, Double tax….whatever.
PEI has charged non residents double property tax for decades.
I bought as a non resident and paid the double property tax without bitching.
Its the cost of owning an out of province(or country) piece of heaven.

And as someone has already pointed out. Its not like this new tax is a surprise….
Sell, lock in your gains and rent.

Oh,
Right……
There’s no places to rent because all the housing has been snapped up by residents and non residents and there in lies the rub.
Full 6 months of the year or empty ….it isnt available to the VOTERS of BC.

Not a lot of sympathy for non residents bitching and moaning about the rising cost of ownership levied in govt fees especially when their property has doubled in value.
Since the people that live here either cant afford to buy OR have no place to live because the rental vacancy rate is near zero.

Lots of angry voters out here are cheering the Dippers on and personally……I cant wait for a major housing realignment and if the economy suffers…..so be it.

Property tax in PEI is 50% higher for non-residents, not double. If you are there 183 days a year there is no surtax. – Garth

#54 Nonplused on 10.07.18 at 8:58 pm

Maybe the fallout from Fukashima is driving everyone on the left coast insane. Or maybe lefties are insane to begin with?

I’m not a religious man, but I do know that the 7th commandment is “thou shalt not steal” and the tenth commandment is “thou shalt not covet thy neighbor’s goods”. Socialism is therefore a sin and all socialists are going to hell. Let’s hope they don’t drag us all down with them first.

And let us not forget that the government created the housing bubble in the first place, through zero interest rates at the fed level and restrictive zoning practices at the local level. Zoning practices are responsible for the lack of supply, not speculators.

Anyway if you own property in BC, even if it’s not in the affected areas, you should sell. Unfortunately the cat may already be out of the bag though. Prepare for massive losses. God be by the side of the highly leveraged, for they are about to walk through the valley of the shadow of bankruptcy.

Anyway what is about to happen in Vancouver couldn’t happen to a nicer group of people. If they thought being “priced out” of the market was bad, wait until people find out what being “priced in” feels like. Those people are going to find out that they just ruined their whole life.

Garth, oh knower of many things, in the event of a foreclosure, what assets are protected and which ones aren’t? Is the bank only entitled to the house, or can they come after other assets if there is a deficiency like your TFSA’s and your RV? Not that people who’ve bought in Vancouver in the last 5 years have money for those sorts of things, but just wondering. I think it’s going to get really bad out there. The “myth of the empty houses” is really just that, a myth. Nobody leaves a house empty unless it makes economic sense to do so. So when all those vacation condos in the Okanagan go up for sale, there won’t be anybody to buy them. With all the part time residents gone, there won’t be any jobs. This is going to suck big time.

Anyway, I wouldn’t worry if I were Gerald. He won’t be paying $9000 a year for long, if he ever does. His condo is going to be worth $400,000 again shortly. Yup, I predict the crash will be 50% in Vancouver right to the Okanagan valley. But the effect will be devastating all the way to Invermere. I have friends with vacation homes there too and they are all panic selling. Or panic listing I should say, nothing is selling.

The time to deal with a bubble is when it’s forming. There is nothing to be done to stop the collapse afterwards. Hasn’t anybody but me read “Extraordinary Popular Delusions and the Madness of Crowds”? We’ve known about this side of human nature since 1841.

#55 crowdedelevatorfartz on 10.07.18 at 8:58 pm

@#67 El Presidente Trumpster
“Excuse moi, but they were TOTALLY WRONG about my victory……… missed it by a deplorable mile.”
++++++

My goodness El Presidente.
You’re Tri-lingual.
I’m pleasantly surprised.

Well even pollsters cant predict “crazy”.

Hows “The Wall” coming along?

#56 Al on 10.07.18 at 9:01 pm

Why doesn’t he just work in Kelowna? What’s that, the local job scene doesn’t support it? Taxes are higher than AB? Yet Kelowna can support the house prices that require said job? This situation is usually not an issue until it starts happening too much then the people who work in the city are gonna get squeezed.

#57 PBrasseur on 10.07.18 at 9:01 pm

Such arbitrary extortion should be illegal but with our activists juges appointed by socialists politicians not a chance.

I wonder if Trump was referring to Canada when he was talking about s**those countries, maybe he should….

#58 georgist on 10.07.18 at 9:02 pm

> Investing in the community means doing something that helps creating jobs in that community, improve the infrastructure, services, etc – not buying a house for yourself!

>> Locals paid because of home ownership: real estate agent, insurance broker, bank loans officer, movers, landscapers, the seller, painters & renovators, fuel oil guy, local utilities, and everyone in the community using services funded by property tax. – Garth

Perhaps there is middle ground to agree here.

1. the main cost of a house is the land

2. The local community generate the value of that land via infrastructure, services and community

3. home owners “pay” for this via:
a. property taxes
b. adding to the community themselves as per point 2 – this does not include absentee landlords

The uplift in land value is taken by the private landlord despite not adding to the community except via property taxes. This uplift significantly exceeds property taxes. This represents a free lunch. Property taxes should be higher.

In addition because property taxes cannot be passed on (no dead weight loss, see https://www.youtube.com/watch?v=NuLlNAdrom4), putting them up to capture this free lunch does not increase rents.

This is in contrast to taxing labour, where if I’m taxed say > 50% at the high end I might not bother working more.

There are a number of economists who support this line of thinking, old and new. Adam Smith. David Ricardo. Henry George.

Check out the video and think for yourself, without the shackles of fusty conservative contradictions.

Outside of our largest cities, the greatest cost component of a home is the structure, not the lot. – Garth

#59 FOUR FINGERS WATSON on 10.07.18 at 9:04 pm

#41 Lorne
….and, you may have noticed, they are not in favour of the pipeline as presented.
…………………………..

NDP supported the pipeline prior to the coalition with the Greens . Anti pipeline stance was the cost of the Green co-operation. I was paying attention.

#60 Ace Goodheart on 10.07.18 at 9:05 pm

RE: BC real estate taxes.

The current state of things is basically, “truth is for losers, dishonesty gets you places, the ruthless abuse of those weaker than you is fun and profitable, take advantage of anyone and anything you can, might is right, lies are fine as long as you are powerful, do as you please and as makes you most happy regardless of the effect on others”

This holds true across the political spectrum and is as much the current mantra of the left as it is the right. No one seems to be able to rise above this. It has become the word on the street.

We are in a lot of trouble.

This sort of public thought doesn’t lead to good things

#61 georgist on 10.07.18 at 9:06 pm

#51 Millmech

> Then it will rise again and people will whine about missing out again for another generation, seen this happen before.

Can you please look at Canada real-estate prices in real terms here and tell us where you’ve seen an equivalent peak, like we have now?

https://www.economist.com/graphic-detail/2018/08/09/global-house-price-index

This bubble is not a small cycle one.

#62 Newcomer on 10.07.18 at 9:09 pm

#33 FOUR FINGERS WATSON on 10.07.18 at 7:44 pm
What’s preventing your employee from buying one of the 110 similar houses now for sale in the same town? How does taxing this Albertan unfairly help your business? Weird conservative. – Garth
…………………………….

Those 110 similar houses in the 900k range ? Not too many people who live and have to earn a living in Kelowna can afford 900k.

Then why boot the doc out? – Garth
——–

So that there will be nobody who can afford it at that price and so that, as a consequence, the price will be lowered. It is the stated purpose of the tax and it will probably work as intended. The tax is intended to be dirigiste not punitive.

How naive. – Garth

#63 Al on 10.07.18 at 9:13 pm

“But what is $4500 each month? Is is equal to an $800,000 mortgage 25/3.35% plus $4500/yr in taxes plus a $2500/yr repair budget.

Final answer: this townhouse is overpriced by $1,000,000”

You forgot to factor in capital appreciation the landlord will receive on top of the rent, and subtract the capital gains taxes (and any other closing/ selling costs) when they liquidate it.

#64 Poor Gerry on 10.07.18 at 9:13 pm

What I learned here is that one should simply shut up and move if you don’t like the circumstances and cant afford to live in your home city. But this is his “spiritual home” whatever the F that means.

I am a single parent that never received a wooden nickel from my ex. My rent has gone up 9.5% in 2 years.

I have never complained about my situation and love life, too bad there’s so many “victims” out there.

Garth, lets start a gofundme for this poor fella. I will add in as much as I can afford for this hard done by wrinkly white male conservative so he can have it a little better…poor guy.

I like your style of putting Fox News labels on Horgan, very refreshing, original and not inflaming. Well played I guess.

Where did I say he was white? – Garth

#65 Thresher on 10.07.18 at 9:13 pm

I might sympathize with the good doctor if he agrees to pay capital gains on one of the properties. But I’ m guessing while he whines about a few thousand dollars he will continue to bill MSP in the hundreds of thousands annually and when the time comes he will sell his principal residence claiming the exemption and then declare his spiritual home as his new principal residence so it will be exempt in the future.

Sorry you’re blasting your right wing bias a little too loud on this one, Garth.

And your bias shows. Envy is ugly. – Garth

#66 georgist on 10.07.18 at 9:13 pm

> Outside of our largest cities, the greatest cost component of a home is the structure, not the lot. – Garth

And is the tax not proposed for metropolitan areas?

Also the tax should be graduated, in that if you have a second home worth $1M close to Vancouver downtown, you clearly pay more than someone who has a similar sized home out in the middle of nowhere, whose value would be far, far less.

I don’t see a contradiction or a problem here, Garth. Possible I see a bit of a politician’s answer, in that you’ve not addressed the main point and slipped in a truism.

#67 jerry on 10.07.18 at 9:17 pm

The dipper retort: “When a property owner holds onto vacant homes and benefits from rising property value, that is speculation. This behaviour is taking homes out of the housing market, driving vacancy rates lower, and making it harder for British Columbians to find a place to live.”

Garth why is it that the personal stories you throw about people who will be hurt by the speculation tax are always the tiny minority of probably 1% the tax will impact. Lets get real. The massive majority of people who will be paying the tax are locals, out of province and foreign buyers who bought secondary properties in the hopes of prices going higher so they can cash out and make a quick buck. This is what we call speculation and this is who the tax was intended for in its original form. Victoria and Vancouver have amongst the highest percentage of locals buying secondary properties in the world. In Victoria last year almost a quarter of all homes purchased were mainly locals purchasing secondary properties. Most other Canadian cities average about 5%. There are only a handful of cities in the world where people purchasing secondary properties outnumber first time buyers like here. Do you really believe that a quarter of the population here were dreaming about being landlords when they were younger? The speculation tax was much more efficient in its original form where it taxed local speculators as high as out of province and foreign speculators. Unfortunately is was dumbed down due to a corporate and politically conservative backlash. If you can’t afford to pay the speculation tax there is a simple solution. Stop speculating on homes

#68 Lost...but not leased on 10.07.18 at 9:18 pm

A couple of points..

Pretty sad to see the typical NDP mentality of cheering on an RE collapse and the NDP can do no wrong. The NDP has never EVER been able to develop policies that are ill advised, petty, mean spirited, machiavellian and result in much collateral damage that is either ignored or they are too incompetent to foresee.

As Garth said…NDP moves do NOT equate with, or result in, affordability, but the exact opposite. Buyers wait it out, if they can afford at all(aka Stress tests, B20 etc). Prices will likely dive further..and then we enter into recession, requiring the same stimulus as previously. The BC economy was strongly impacted by RE…so if RE collapses…fallout of many will be out of work= can’t afford to buy.

Seriously..if home prices collapsed 25%…..50%….or more…do these NDP cult members think the alleged problem is solved ?

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

Other matter of even greater concern is the upcoming NDP referendum on PR voting. This is sliding under the radar screen, and will likely be rigged to effectively give NDP and Greens power in BC for the foreseeable future.
Then we will see their true colours of a socialist paradise hell.

NDP is for idiots..they deserve each other.

#69 45north on 10.07.18 at 9:19 pm

So the speculation tax will join the foreign buyer tax, the Van vacant homes tax and the luxury property tax in a concerted government effort to crash the real estate market. This is concurrent with the mortgage stress test, rising mortgage rates as bond yields spike, and at least three looming Bank of Canada interest rate increases. No wonder sales have tumbled across the province and prices have already been pared by a third in areas like the tony Westside. Now average homeowners across the Lower Mainland, in the Okanagan and on the Island can also see their equity sucked off.

October 2019, Comrade Horgan: “last year the banks pulled back credit. We just didn’t think they would. Worse we didn’t see it until now.”

#70 Poor Gerald on 10.07.18 at 9:22 pm

His spiritual home is only worth 900K.

900K for a place in Kelowna that we know is at least 1998 or older? What the hell is going on in BC with house prices?

And man, life much be so tough for Gerald.

Wait until we build the wall and make Alberta pay for it.

Just be lucky the NDP caved and cut this tax down by 50%.

They should have stuck with 2% plus having to rent the place out all year, not half the year.

Plays right into the vacationer rental slumlord hands where they rent the place out over the winter and kick the people out to price gouge summer vacationers for 15k over the summer.

Locals first.

#71 Economystical on 10.07.18 at 9:24 pm

#35 Remembrancer

“Fair share” is when the rich have their money taken away until everyone has the same amount. Fair = equal. Anyone who has more money than someone else has more or less stolen it.

We are, gradually, as people need time to adjust to such revelations, moving towards a $50 minimum wage. But it will also be the maximum wage. All people will earn the same. Property will also be equally divided. No farmer will own his land, instead he will rent it from the state. No company will be privately owned, instead all will own it. But we are managing this transition slowly just as the Catholic Church managed Galileo’s findings, or the theory of evolution for that manner.

The goal of economystics is a free lunch for everyone, and nobody working in the kitchen. Our children will know this paradise.

Except for me of course. My consulting rate will remain at $500 per hour and per diem expenses including my private jet. I can’t stand flying commercial.

#72 El Presidente Trumpster on 10.07.18 at 9:26 pm

#55 crowdedelevatorfartz on 10.07.18 at 8:58 pm

@#67 El Presidente Trumpster
“Excuse moi, but they were TOTALLY WRONG about my victory……… missed it by a deplorable mile.”
++++++

My goodness El Presidente.
You’re Tri-lingual.
I’m pleasantly surprised.

Well even pollsters cant predict “crazy”.

Hows “The Wall” coming along?
….

I have put Judge Kegger in charge of the wall.. he owes me YUUUGE…

You are also banned from Trump Tower elevators

#73 Figure it Out on 10.07.18 at 9:36 pm

#54 Nonplused — “I’m not a religious man, but I do know that the 7th commandment is “thou shalt not steal” and the tenth commandment is “thou shalt not covet thy neighbor’s goods”. Socialism is therefore a sin and all socialists are going to hell.”

Old testament, old covenant. New testament, new covenant, viz:

Then the Pharisees went and plotted to entrap him in what he said. So they sent their disciples to him, along with the Herodians, saying, “Teacher, we know that you are sincere, and teach the way of God in accordance with truth, and show deference to no one; for you do not regard people with partiality. Tell us, then, what you think. Is it lawful to pay taxes to the emperor, or not?” But Jesus, aware of their malice, said, “Why are you putting me to the test, you hypocrites? Show me the coin used for the tax.” And they brought him a denarius. Then he said to them, “Whose head is this, and whose title?” They answered, “The emperor’s.” Then he said to them, “Give therefore to the emperor the things that are the emperor’s, and to God the things that are God’s.” — Matthew 22:15-22

…Take it for what it’s worth — I’m an atheist.

#74 Poor Gerry on 10.07.18 at 9:38 pm

Where did I say he was white? – Garth

You didnt but i have a suspicion and it served my narrative, you taught me that:)

Thanks for your blog and your writing style, been reading for years!

#75 Just read change.org on 10.07.18 at 9:54 pm

This is the website where all those speculator cry babies owning two homes are spouting doom.

Oh, no. End of world is here. We can’t afford this tax.

But we can afford a second home.

The more I read into this the more I realize how much speculation has gone on in BC.

Maybe Garth is right. Maybe Canadians have taken out a few too many loans to buy a few too many properties and now about to find out the consequences of being not so genius, greedy people, price pumping shelter.

The common theme is people the age of 50+. Get these speculators a soother. They will sue, they will scream, they will claim the economy will disappear forever.

Love it. This spec tax is awesome. NDP gets my vote for looking after locals.

To be respected and effective taxes must be faur and equally applied. Slapping people because they’ve had a family cottage for decades, for example, is unjustifiable. High real estate taxes will not benefit those who covet some. Just the opposite. But, you will learn. – Garth

#76 Vampire studies on 10.07.18 at 9:58 pm

65 thresher – one of the properties will be subject to cap gains. In this case it sounds like Gerry has declared the condo as his principal rez so he will not pay gains on this, so the Kelowna property would be subject to the gain. However, depending on how he has treated the property tax-wise, he may be able to defer that until he actually sells it.

#77 crowdedelevatorfartz on 10.07.18 at 10:01 pm

I quite certain that regardless of who was in power in BC.
NDP (Dippers) or Liberals (Conservatives)
The “non resident” tax would have been implemented one way or another.
Voters are pi$$ed at what has been going on and when there is no affordable places to even rent………the populist solution is……..tax tax and more tax.
Either way.
The govt ( NDP OR Liberal) wins!

And they still cant balance a budget.

#78 Linda on 10.07.18 at 10:08 pm

The great BC tax grab may not turn out so great if the policies do indeed ‘crush’ housing prices. Should the melt occur & housing prices drop then the amount collected should drop as well. Or is there some kind of clause in this envy tax that would prevent any lower assessed value from being used in the calculation?

#79 Stan Brooks on 10.07.18 at 10:11 pm

The tax is punitive.

Life is punitive here.

Boost the biggest ever housing Ponzi scheme with specific pointed policies in order to ensure banks and real estate industry profits and then tax the ‘rich homeowners’ to death in any shape or form possible while destroying savers, retirees and renters with inflation.

Pure genius. And a reminder that what you consider as your own property really isn’t.

Of course it is a theft. The problem is that there is nothing you can do to protect yourself.

Of course they won’t touch your retirement savings.

#80 Allie McLeurte on 10.07.18 at 10:11 pm

Horgan, a modern day Robin Hood!

#81 True colors showing here on 10.07.18 at 10:18 pm

What’s preventing your employee from buying one of the 110 similar houses now for sale in the same town? How does taxing this Albertan unfairly help your business? Weird conservative. – Garth

___________________________________________

Hey Garth. News alert. Taxing this Albertan and every other person owning more than one house is going to add fuel to the crash happening and bring affordability well in line pretty soon. Maybe advise your buddy that he should have hit the exits long ago, if he can’t see what is happening.

Right now, you cannot get staff when you need a $145,000 dollar income at current median prices in Kelowna. A median 1 bedroom condo at 700-800 sqft requires a $92,000 income in Kelowna if stress testing.

What is preventing this guys employee from considering working in the area is what was stated above and/or rent for a small condo pushing $2,200 per month in the area.

NDP has the numbers and is smart enough to understand how BC will become a ghost/tourist only town if these prices are not addressed immediately. Look at Vancouver core? Already is a ghost/tourist town visited only by workers commuting in and tourists. 3 million for a home in West Vancouver? This is crooked and rife with fraud. Working people do not push prices up like this.

When people have had enough, they leave, which is why population numbers in Kelowna started reversing in 2017.

It is actually cheaper and easier to secure more affordable rental in the Lower Mainland at present.

If people can’t afford stuff, specifically any kind of roof over their head, they move to where life might make more sense. Just like you have said many times.

ps…NDP, please blanket this wealth tax to all those wealthy people owning multiple properties across the entire province of BC – across Canada even better. Do whatever it takes to get life back in line before the corrupt Liberals took it over and destroyed the province. Just try living in Vancouver for a day if you want to realize the temper tantrums greed has created. A culture fostered by the Liberals.

Taxes do not make anything cheaper. But in this instance they could accelerate a natural market correction that throws BC into a recession. In that case it will not be the wealthy suffering, nor will the unemployed be buying cheap houses. But the homeowning middle class will be ground zero. How can BCers believe this political fairy tale? – Garth

#82 NumNum on 10.07.18 at 10:19 pm

For once I am ok with this draconian policy. Housing is a basic necessity (renting offers no escape from increasing property costs either) and the increasingly unaffordable cost of housing in Canada are turning the average person into a slave. If this is what it takes to make basic housing reasonably affordable, so be it.

#83 reynolds531 on 10.07.18 at 10:22 pm

I’d like to see your take on cra cracking down on TFSA accounts. Apparently you can’t be a member of the Ford (motors) family and own super class shares in a TFSA.

#84 Stan Brooks on 10.07.18 at 10:23 pm

#73 Figure it Out on 10.07.18 at 9:36 pm

…Take it for what it’s worth — I’m an atheist.

————————————

It is highly likely though that you would still have close to religious experience in the next decade or two with taxes and general life/cost of living here whether you like it or not.

In the bible’s and in your own words: It is their money, remember. You are just the temporary holder/bearer.

#85 dakkie on 10.07.18 at 10:31 pm

Canada Real Estate LEAST AFFORDABLE EVER! 75% of Income Spent Just To Pay Their Home!

http://www.investmentwatchblog.com/canada-real-estate-least-affordable-ever-75-of-income-spent-just-to-pay-their-home/

#86 Remembrancer on 10.07.18 at 10:37 pm

#76 Vampire studies on 10.07.18 at 9:58 pm
65 thresher – one of the properties will be subject to cap gains. In this case it sounds like Gerry has declared the condo as his principal rez so he will not pay gains on this, so the Kelowna property would be subject to the gain. However, depending on how he has treated the property tax-wise, he may be able to defer that until he actually sells it.
————————————————————-
The story was clear, dude plans to retire to BC and that would be his primary residence in the future.

CRA is actually clear on this, sell primary residence, live at least 2 years in former secondary residence and that becomes your new primary residence for cap gains exemption going forward… i.e. You aren’t restricted to one primary residence for a life time in Canada, yet anyway…

#87 Viorelli on 10.07.18 at 10:39 pm

Today is a gloomy and rainy day in Vancouver. Nevertheless I went to see my grandsons hockey game, my kids and their spouses came over with kids (some of them), we had our Thanksgiving dinner together and were thankful for what we have and where we are. Nevertheless, the human nature doesn’t change, just like drinking of Vikings at the long table together and planning for raids and future prospects, today its survival prospects in Vancouver. Everyone wants a decent life, place to live, enough income to cover comfortable living. Unfortunately it is not possible unlike what the socialists would like you to believe. Thankfully the parasitic plans of basic income were scrapped by the new government in Ontario, how can you afford it by taxing all of your most productive workers into oblivion. Nonetheless, globalization must be also scrapped to allow the locals a decent opportunity and life, otherwise the class disparity will grow and either a revolution or civil war will take place. If you look at history it is clear where it is all going to go. There is a fine line and nothing is white and black like many are led to believe.

#88 Shawn allen on 10.07.18 at 10:46 pm

Spec tax and discrimination against other Canadians.

Constitutional amendments needed to protect property rights against discriminatory taxes.

Until then need federal government to apply maximum pressure on provinces to stop the nonsense. If Trudeau won’t do it then vote in someone who will.

#89 AB Boxster on 10.07.18 at 10:55 pm

How can BCers believe this political fairy tale? – Garth

———————————-
It’s because then generation doing all the whining, primarily millennials, have grown up expecting free everything.

Every gets a ribbon for showing up.
No one wants to pay for music or content.
It should all be free.

So why would you not expect them to believe in the government of socialists that promise it all.

#90 Fess up Garth on 10.07.18 at 10:57 pm

You own a second property in BC, don’t you?

“High real estate taxes will not benefit those who covet some. Just the opposite. But, you will learn.” – Garth

Housing isn’t an investment for me. I am about to learn what happens to speculators in BC. Nobody who owns a house and lives in it as a principle residence is getting any kind of tax. 99% of BCers will not be affected by this tax.

So, let’s see who is speculating and better yet, let’s see who is swimming naked. Big crash coming to BC and I am more than ready to weather any massive recession. Bring on the dark ages. I save and invest, not spend. Those reckless spenders borrowing to speculate and buy multiple homes have put many in a precarious situation. Mostly the younger generation.

Not doing anything and letting run away fraud and speculation is not an answer. Will end up in a bigger crash and wayyyyy more economic damage (re: Vancouver right now).

The people who spend without a pot to you know what in will learn. And I am glad to see NDP bring any kind of action. Hopefully they get more ideas to implement.

The only scum hanging onto the idea of don’t touch anything, scrap the tax, are those with money to lose – vested interest. And apparently that is a lot more people than previously thought.

Next up, interest rate lessons.

#91 I met her in Kelowna on 10.07.18 at 11:12 pm

She was a stripper, told me she owned 5 homes there and that interest rates can’t possibly go up.

#92 Made in BC on 10.07.18 at 11:16 pm

Not hard to bypass the spec tax. Sign a fake lease and make sure a “rent” payment is deposited on the 1st of each month. There, done.

Fraud. Criminal. – Garth

In BC they call it soft fraud, which somehow makes it okay to do whatever it takes to own many homes and squeeze unreported income out of them.

#93 Bobs ur uncle on 10.07.18 at 11:17 pm

“The entire [BC housing] market will be brought down”

So…where’s the problem?

#94 I Like Beer #Me too on 10.07.18 at 11:18 pm

Decide how much you are willing to spend on rent and stick to it. Move if you have to in order to stay at that price point. No one in their right mind would want buy at over inflated prices. Rent instead and watch all your money worries disapear.

#95 [email protected] on 10.07.18 at 11:28 pm

#81 Taxes do not make anything cheaper. But in this instance they could accelerate a natural market correction that throws BC into a recession. In that case it will not be the wealthy suffering, nor will the unemployed be buying cheap houses. But the homeowning middle class will be ground zero. How can BCers believe this political fairy tale? – Garth

———————

This recession business is just fear-mongering. With the proper Gov’t incentives jobs lost in the bloated real-estate sector, will be offset by job creation due to hother (some high-tech) companies seeing a future in BC that they can attract and retain workers to live here. In the end it will lead to a better-balanced economy, not dominated by those who are in the business of flipping houses to one another. Let’s see where we are in 4 more years. NDP still is very popular in BC the last I checked.

#96 Ponzius Pilatus on 10.07.18 at 11:28 pm

Horgan is doing a fine job.
Calling him comrade is an insult.
Cleaning up the mess that Christy let behind.
If it means screwing a few Alberta docs.
No problem.

#97 Smoking Man on 10.07.18 at 11:28 pm

Taxes do not make anything cheaper. But in this instance they could accelerate a natural market correction that throws BC into a recession. In that case it will not be the wealthy suffering, nor will the unemployed be buying cheap houses. But the homeowning middle class will be ground zero. How can BCers believe this political fairy tale? – Garth
……

Because they are over schooled and stupid.

#98 Jen1010 on 10.07.18 at 11:29 pm

Yes it’s too bad that the situation changed for Gerry when he purchased so long ago. However, the property taxes in BC are very low and don’t cover the things he uses here-doctors, roads, infrastructure and education (not for him but the people who will support him in his older age). It’s not an envy tax. It’s a tax for people who use services in BC but aren’t paying for it.

#99 Smoking Man on 10.07.18 at 11:34 pm

When you punish success and reward stupidity and lazyness you become Cuba, Venezuela.

Money and brains have wings. You frighten any one of them they fly away and you are left with total iditots and crooks in power.

I escaped. Even Commie California is better than 53% income tax Canada. I’m not the only one that fleed.

Where is John Galt

#MEGA

#100 Foo on 10.07.18 at 11:39 pm

Garth, you need to realize that the situation is out of control in bc; particularly in the LM.

Speculation has been encouraged for 15 years and the mentality has to change.

A hangover is never pretty…

#101 Ian on 10.07.18 at 11:39 pm

#45 re: Ontario small business tax rate

That Souza last Liberal gasp reduction to 3.5% was nothing my friend.

We will be taking it way lower, ideally to zero!!! I talked to Ford in person about this twice now, I think it will happen once the Ontario budget gets a little more back to the land of the living.

#102 Ponzius Pilatus on 10.07.18 at 11:50 pm

Drove by my bungalow 1,400 sq feet for sale.
30×100 lot.
That I sold 10 years ago. For 521 k.
Out of curiosity, phoned the realtor about the price.
1.3 mill, land only.
In the fricking Edmonds area in Burnaby.
Spanking new 4,000 sq foot beside it taking up the whole lot.
Empty
Local buyers.
My ass.

#103 Cici on 10.07.18 at 11:57 pm

As my ol’ man always says (and most often when I don’t feel like listening to it), “Life ain’t fair.”

And despite this “injustice,” Gerald’s still got it pretty good in comparison to most, with plenty of lucrative options to choose from.

I won’t bore anyone by listing them all, but will say that if I were in his shoes and really wanted to keep the “spiritual” home, I’d offload the Calgary condo and rent
for those four months per year in Alberta instead. He may also want to consider moving his practice to BC, seeing that the new marijuana laws coupled with falling RE prices could push a good percentage of the BC population close to the edge and be a big boon for his profession.

#104 Ponzius Pilatus on 10.07.18 at 11:59 pm

BC adds 33k jobs.
Way to go comrade Horgan
https://www.richmond-news.com/business/b-c-adds-33-300-jobs-in-september-unemployment-plummets-1.23454800

#105 Looney Baloney on 10.08.18 at 12:18 am

Sell it. Take the free cap gains. Buy it back at half the cost in a few years. No brainier. Next

#106 Matt on 10.08.18 at 12:20 am

Personally I love this tax! I live in the Burbs of Vancouver in a plane Jane house that I bought for $400k (nearly paid off) that peaked over $900k. My problem, the next step up (what I want) went from $650k to $1.5+ million. I’m 30 and my mortgage to upgrade would be more then my original house. I rent the basement, invest and make $180k per year at my day Job in Oil and Gas. Personally the more all these factors pummel the housing market the more luxurious my life will be (bigger house and less employment income to buy it) and my hard work and saving will mean more. I’m a conservative thinker, but realize nothing is free market about houses so using tax to punish people who don’t pay income tax here is goodwith me. My first choice would be abolish the ALR and build American style freeways to open up tons of land around Vancouver to pummel prices and huge me buying power by dew flying older folks housing wealth. Why should I give a rats ass about people who by birth age got opportunities I never had? I don’t expect them or the government to care about me, I’m self sufficient so why protect their wealth at my expense.

#107 Lorne on 10.08.18 at 12:36 am

#59 FOUR FINGERS WATSON on 10.07.18 at 9:04 pm
#41 Lorne
….and, you may have noticed, they are not in favour of the pipeline as presented.
…………………………..

NDP supported the pipeline prior to the coalition with the Greens . Anti pipeline stance was the cost of the Green co-operation. I was paying attention.
…….
Another couple of statements that are totally false. Nice to say you were paying attention when you clearly were not!
https://globalnews.ca/news/3426234/b-c-ndp-vows-to-fight-kinder-morgan-pipeline-expansion-but-wont-say-how/

#108 adee on 10.08.18 at 1:10 am

The rest of us have principal residence where we spend most of our time. If he wants to spend 8 months in BC he should get licensed here. His choice.

Gov’t policies resulted in a huge capital gain for him. He can sell and crystalize, or pay the surtax. His choice.

You’ve been telling everyone else in BC to sell and then rent in BC. His choice.

Hard to feel sorry for him. He needs a better advisor.

And he needs to examine his inflated sense of entitlement. Perhaps someone can recommend him to a good therapist.

#109 SteveM on 10.08.18 at 1:13 am

Considering that I will have to work about half my career just to pay for the price increases on real estate since I began working, and recessions last a lot less than half of a career, these threats of a slowing economy due to crashing RE are baseless. I could afford to take 10 years off work if there was a crash.

#110 James Kuher on 10.08.18 at 1:14 am

“Now average homeowners across the Lower Mainland, in the Okanagan and on the Island can also see their equity sucked off.”

Which equity? Bubble contains only air. Emptiness. Air. Nothing.

No equity in bubbles. Only unearned profit if the property is sold

#111 Gerald on 10.08.18 at 1:23 am

“the 7th commandment is ‘thou shalt not steal'”

Well, how much of the cash that buys real estate in Vancouver do you think maybe, maybe, traces back to stealing of some sort?

#112 WUL on 10.08.18 at 1:33 am

Upon reading this blog and the comments about Gerald’s situation, I went to my bookshelf and found my “Diagnostic and Statistical Manual of Mental Disorders” Fourth Edition (aka DSM-IV-TR). From the American Psychiatric Association.

I think I bought it about 1999.

Kelowna is not mentioned in it.

Gerry will be fine.

Most chapters mention Stan Brooks. A different case and diagnosis there, by golly.

Dr. WUL

#113 For those about to flop... on 10.08.18 at 1:34 am

Recent sale report.

This house in Coquitlam sold 25 days ago.

The details…

3353 SCOTCH PINE AVENUE ,Coquitlam.

Paid 1.79 March 2016

Sold 1.71 September 2018

This is the type of scenario I have seen over and over in my study,and because the Spring market of 2016 was so epic there are still a lot of cases to play out.

So they paid 1.79 in March 2016 and then had it back on the market by June 2016 trying to make a quick buck at 2.28.

Terminated the listing in October 2016 and with my study I have been able to show this is when the problems started for the speculators in Vancouver as the market slowly rolled over.

Too many people had the same plan, and then when the fall market failed to take flight, the people who were only looking to do it for the short term hit the first hurdle and a backlog of listings failed to clear before the holiday period of 2016/2017.

A lot of people took a couple of months of and came back for the 2017 spring market,when the lights were flashing Amber and the media and the real estate boards tried to convince consumers it was business as usual, but these guys waited until the fall to try it on for 2.58

Tone deaf,bad info,dunno,but they were going the wrong way, probably to try and get the same number as before, but let the buyers feel like they had a win.

Prices although still elevated had been softening for some time, and buyers by then had speculators from 2016 and spring 2017 to play against each other and older purchasers that were able to undercut them.

Small ,shallow victories, but the tide had definitely turned in most parts.

After trying one more time to pry a profit out of a deteriorating market, listing for 1.99 during spring 2018 ,they finally settled up and closed the account as stated just recently in September 2018

So three calendar years later, it’s all over, they took their Buckleys and can move on but thousands more are still in limbo.

The sellers carried a big stick for a long time but they got complacent and left it beside the pool while they and the market took a dip.

They went looking for it in the sauna and the buyers grabbed the stick and used it to barricade the sauna door.

Now the sellers are being made to sweat…

M44BC

https://www.zolo.ca/coquitlam-real-estate/3353-scotch-pine-avenue

$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#114 Grandma Moses on 10.08.18 at 2:03 am

Another mandate for socialism in BC and confiscation will surely begin. The fanatics will force tenants on you, like it or not. There is precedence for this in the UK, socialist Russia and China, where migrants are delegated housing by local council’s regardless of ownership status.

If you’re a “snowbird” expect to have your exit status recorded at the border and new “tenants” moved into your house, condo or t/h without your knowledge or permission without leave to appeal.

I believe this mandatory dictatorship without doubt will occur, and homeowners may return to Canada and find themselves homeless or find that the second home or bedroom they thought they owned has become logged on a quota registry, and you will be living in a hotel or sharing your refrigerator with complete strangers. This will be confiscation without compensation.

Secondly, there is no doubt, as there is also precedence in socialist Europe and China, that the number of bedrooms in your house will be tallied and owners will be forced to accept tenants of undetermined origin as ‘lodgers’ as has happened in Soviet states in Russia and China.

#115 Emporor McMuff on 10.08.18 at 2:57 am

Doctor shortage in Victoria is now critical. You see, even Docs can’t afford to relocate here due to astronomical real estate prices. Thus, as they retire here, no one is replacing them. This means that elderly patients are now waiting for hours at walk-in clinics that have increasingly reduced hours due to Doc shortage. If the NDP can tank real estate prices by 50% or more, then we may attract more Doctors, nurses, firefighters, law enforcement professionals. If prices don’t tank, then we have a continuing societal collapse that will accelerate. Go for broke Comrade Horgan! Tear it down!!

#116 Tony on 10.08.18 at 3:13 am

Gerry won’t have to worry about any extra taxes slapped on his Calgary condo as it collapses in price.

#117 SteveinVic on 10.08.18 at 4:01 am

Garth — tone down the rhetoric. Calling an uncontroversial FBT a ‘head tax’ is just so ugly. Really poor taste.

#118 Howard on 10.08.18 at 4:45 am

#28 FOUR FINGERS WATSON on 10.07.18 at 7:30 pm

If BC had electoral reform and a system like or similar to that of say France, the Greens would have been eliminated in the first round and the final runoff would have been LIB vs NDP which would have resulted in a majority for one of those two parties. The NDP might not be in power. The Green Party would not be holding the NDP hostage and a pipeline might be happnin’.

https://en.m.wikipedia.org/wiki/Two-round_system

————————————————–

No, the Greens came second in many ridings where the first-round victor took less than 50%, so they would be in many of the runoffs in a hypothetical two-round system.

Do you not realize we elect legislatures at the riding level?

#119 Jack Dawsun on 10.08.18 at 5:04 am

“how does it make you feel, Gerry? Angry, hurt, bitter, resentful? Let it all out.-Garth”

Garth, you really know how to wind up the denizens of the steerage class.

#120 Howard on 10.08.18 at 5:05 am

#64 Poor Gerry on 10.07.18 at 9:13 pm

What I learned here is that one should simply shut up and move if you don’t like the circumstances and cant afford to live in your home city. But this is his “spiritual home” whatever the F that means.

———————————————-

Yes that’s right. Garth seems fond of telling ambitious young people they should move to Fredericton or Regina if they don’t like house prices (driven up by a myriad of government policies) in Toronto and Vancouver.

Well, there are many beautiful areas of the BC Interior where the speculation tax will not be levied. Gerry should move there if the tax troubles him so much.

#121 Danny Baloney on 10.08.18 at 5:11 am

Lemme help the poor guy out.
Sell both places. Relocate business to Banff and expand services to cover all the crazed locals and foreigners who might also need treatment. Buy a lakefront cottage in Kawarthas or some other lake district in Ontario.
Kelowna????who would want to go to Kelowna. It even rhymes with bologna!

#122 unbalanced on 10.08.18 at 5:16 am

Spends about 8 months a year in Kelowna. Nice job to have.

#123 Howard on 10.08.18 at 5:21 am

#76 Vampire studies on 10.07.18 at 9:58 pm

65 thresher – one of the properties will be subject to cap gains. In this case it sounds like Gerry has declared the condo as his principal rez so he will not pay gains on this, so the Kelowna property would be subject to the gain. However, depending on how he has treated the property tax-wise, he may be able to defer that until he actually sells it.

——————————————-

But after he sells his Calgary condo in 5 years (cap gains exempt) and declares the Kelowna house his new primary residence, he will not have to pay cap gains on it if he decides to sell it some time in the future. Right? Or does it depends on the amount of time spent as a secondary residence vs primary residence over the duration of his ownership?

#124 Pogus Mahonus on 10.08.18 at 5:21 am

By Guest Blogger Doug Rowat

I’ve spent the majority of my 20 years on Bay Street researching the stock market. Yesterday

Garth,

watch this guy like a hawk. 20 years in the rat race and not a grey hair on his head nor a wrinkle to be seen. Think he spends alot of time at the Adelaide Club or over at the pub.

#125 Another Deckchair on 10.08.18 at 7:15 am

Gosh, the “Crab Bucket” mentality group is out in full force right now.

Pull everybody down to the same level; no new businesses started, no new authors, no new Canadian TV shows, nobody running the government (hmmm…!) No street buskers, no new coffee shops (with free WiFi) no Canadian Banks, no blogs to air ones discontent – nothing but whiners wandering the trash-laden wasteland wondering where the exuberance of life went.

Sheesh.

#126 Howard on 10.08.18 at 7:27 am

Oh nothing. Just a $14 million price tag for this fairly average looking house in Vancouver West. https://www.zolo.ca/vancouver-real-estate/1773-knox-road

#127 FOUR FINGERS WATSON on 10.08.18 at 7:50 am

#118 Howard
No, the Greens came second in many ridings where the first-round victor took less than 50%, so they would be in many of the runoffs in a hypothetical two-round system.

Do you not realize we elect legislatures at the riding level ?
……………………..

The Greens took 17% of the popular vote in BC. That is why we need electoral reform.

#128 FOUR FINGERS WATSON on 10.08.18 at 8:16 am

#107 Lorne on 10.08.18 at 12:36 am
#59 FOUR FINGERS WATSON on 10.07.18 at 9:04 pm
#41 Lorne
….and, you may have noticed, they are not in favour of the pipeline as presented.
…………………………..

NDP supported the pipeline prior to the coalition with the Greens . Anti pipeline stance was the cost of the Green co-operation. I was paying attention.
…….
Another couple of statements that are totally false. Nice to say you were paying attention when you clearly were not!
https://globalnews.ca/news/3426234/b-c-ndp-vows-to-fight-kinder-morgan-pipeline-expansion-but-wont-say-how/#107
…………………………………….

Last week, Horgan suggested he was open to supporting the pipeline.
https://theprovince.com/news/bc-politics/christy-clark-and-john-horgan-display-an-utter-lack-of-leadership-on-pipeline-politics

#129 jess on 10.08.18 at 8:18 am

reputation vs $ …The bank has also canceled a share buyback program, after Danish authorities ordered it to build up capital to face a potential fine or financial trouble.

between 2007 and 2015.
whistleblower warning 2013

Financial Times reported Friday that an internal Danske Bank memo revealed some of the strategies that could be behind the scandal.
“mirror trades”

#130 jess on 10.08.18 at 8:24 am

maybe change the word tax to carbon pool ?

Nobel laureate Paul Romer has been tweeting.

He’s flagged up an article explaining why he is optimistic that climate change can be tackled, with firm action.

It says:

The practical insight is that there are two very different types of optimism. Complacent optimism is the feeling of a child waiting for presents. Conditional optimism is the feeling of a child who is thinking about building a treehouse. “If I get some wood and nails and persuade some other kids to help do the work, we can end up with something really cool.”

What the theory of endogenous technological progress supports is conditional optimism, not complacent optimism. Instead of suggesting that we can relax because policy choices don’t matter, it suggests to the contrary that policy choices are even more important than traditional theory suggests.

https://paulromer.net/conditional-optimism-about-progress-and-climate/

#131 jess on 10.08.18 at 8:52 am

hey trumpian tin hatters hear ye

https://paulromer.net/economic-growth/

#132 Penny Henny on 10.08.18 at 9:03 am

#34 TurnerNation on 10.07.18 at 7:51 pm
Time for the Buy or Rent game.
But first an important message to please spay and neuter your blog dogs.

Pick up this ho-hum urban townhouse for an eye popping $1,600,000:

https://www.realtor.ca/Residential/Single-Family/19914000/488-KING-ST-E-Toronto-Ontario-M5A1L8-Moss-Park

Or…Rent it to the tune of a monthly $4500

https://www.realtor.ca/Residential/Single-Family/19967737/488-KING-ST-E-Toronto-Ontario-Moss-Park

…………….

But what is $4500 each month? Is is equal to an $800,000 mortgage 25/3.35% plus $4500/yr in taxes plus a $2500/yr repair budget.

Final answer: this townhouse is overpriced by $1,000,000
/////////////

Turnernation, you forgot the basement unit.

#133 Howard on 10.08.18 at 9:22 am

#127 FOUR FINGERS WATSON on 10.08.18 at 7:50 am

#118 Howard
No, the Greens came second in many ridings where the first-round victor took less than 50%, so they would be in many of the runoffs in a hypothetical two-round system.

Do you not realize we elect legislatures at the riding level ?
……………………..

The Greens took 17% of the popular vote in BC. That is why we need electoral reform.

——————————————-

I’m not sure how that’s a reason for electoral reform? They won 17% and got 3 seats. What’s the problem? Surely a better reason for reform is to prevent majority governments winning only 35% of the vote.

Anyway in any electoral reform away from FPTP, smaller parties like the Greens are likely to do better, not worse.

#134 ts on 10.08.18 at 9:33 am

Wow! That sounds like a pretty scary scenario. Hope it does not come to Canada.

#135 PastThePeak on 10.08.18 at 9:37 am

If the steerage section of Garth’s blog is at all representative of the general population, then it would seem that BC residents are a very bitter and envious lot. Doesn’t sound like a nice place at all to live.

#136 Gravy Train on 10.08.18 at 9:39 am

Bill Nordhaus and Paul Romer both win the Nobel Prize in economics “for integrating climate change into long-run macroeconomic analysis.”

AB Boxster will fly into a conniption over this ‘outrage’! Any bets? We’re dragging him kicking and screaming into the 21st century. Too funny! :)

#137 georgist on 10.08.18 at 9:41 am

#106 Matt – you hit the nail on the head. If you are numerate *and* only have a home to live in, falling prices are a win for most.

Some people here who are balls deep in property leverage will cry “think of the first time buyer in negative equity!” but this is a small number of people. Revising prices will help many more than it hurts.

But it will hurt lazy landlords.

Patently incorrect. 70% of Canadians own homes, and have the bulk of their net worth there. A politically-engineered market dive could have profound economic consequences, as opposed to a natural market-induced correction. – Garth

#138 georgist on 10.08.18 at 9:42 am

> I could afford to take 10 years off work if there was a crash.

Or more likely: you continue working and spend your increased disposable income. The exact opposite of the “negative wealth effect” claimed on this page.

#139 crowdedelevatorfartz on 10.08.18 at 9:47 am

@#113 Flop
“Paid 1.79 March 2016
Sold 1.71 September 2018
This is the type of scenario I have seen over and over in my study,and because the Spring market of 2016 was so epic there are still a lot of cases to play out.
So they paid 1.79 in March 2016 and then had it back on the market by June 2016 trying to make a quick buck at 2.28.”

+++++

Yep.
The is about to turn into one royal bbq with a lot of prime rib steaks being burned into charcoal.
Speaking of fires.
Havent seen many houses or condos go up in smoke yet. Maybe insurance companies are getting better at denying claims.
The early 80’s was fugly.
A friend of mine who was an excellent carpenter went from building houses to cleaning offices at night to pay the bills ……..in about 6 months……..
I dont think the market will slam shut that hard but if it’s anywhere near as bad . Houses went from 250k to 80k in less than a year.
Who knows, perhaps Millenials might even discover how “easy” Boomers had it in the early 80’s when interest rates and govt policies crushed the economy.

#140 X on 10.08.18 at 9:50 am

“When a property owner holds onto vacant homes and benefits from rising property value, that is speculation.”

Technically by their own rule, Gerry hasn’t benefited until he has sold. Perhaps it would be ‘more fair’ or ‘less unfair’ to tax upon sale, then at least it gets the flippers, not the people who have committed long term to the communities. Not that I like the thought of an additional home sales tax either.

Re#42-This will probably happen a little. I don’t think most people avoid taxes to be greedy, but moreso when they feel they have been treated unfairly.

#141 georgist on 10.08.18 at 9:57 am

> Patently incorrect. 70% of Canadians own homes, and have the bulk of their net worth there. A politically-engineered market dive could have profound economic consequences, as opposed to a natural market-induced correction. – Garth

I never get this kind of reasoning. If all homes are 400k then all homes become 200k, people are better off.

They can’t release the equity, because they have to live somewhere. So why does it need to be 400k? So they can give 400k to their son who needs 400k because houses are 400k? If they are 200k it still works.

You can’t unlock these “savings” in totality. That’s why bankers hand out fiat money like confetti (which is created when they extend a new loan). It’s *not* redeemable for a barrel of oil.

Apart from people caught in negative equity, who else “suffers” from a correction so houses are actually affordable, Garth? Their use as some kind of wealth store is mocked by yourself daily. Because it cannot work.

People spend years paying off mortgages, historically at far higher rates than today, eschewing saving and investing to instead reduce debt. The typical person ends up with a home, little in the way of financial assets, with the ultimate need to sell, downsize, and live off the equity realized. An engineered crash obviously disrupts that. Worse, a real estate event which has been designed by government to ‘increase affordability’ through increased taxation pushes property values lower, robs people of imputed wealth, affects their spending habits and at the same time causes an economic reversal – especially in a place like BC where 25% of provincial GDP is housing-related. Economic activity slows, unemployment increases, government spending swells as tax revenues fall and real estate sales stall badly. Humans do not buy things that are getting cheaper, particularly when jobs are in peril. It’s lose-lose-lose. Your logic is naive, simplistic and incorrect. – Garth

#142 Tim Palupock on 10.08.18 at 9:58 am

These NDP, Green Party, Liberal tax pushers are such hypocrites.

I didn’t see them complaining when mortgage rates dropped from 10%-11% down to now 2% to 4%. They have no idea or don’t care how economics and the real world works. When interest rates drop alot , housing becomes much more expensive. It is basic economics.

They think that they can force people to give housing to whoever one they want. Rent controls don’t work and these policies will not work either. All this will do is run out good paying jobs and business anything from carpenters to electricians etc. We are talking really well paying jobs and income lost here.

The NDP will eventually lose and they will end up like here in Ontario as a lost relic of the past. What a bunch of brain dead politicians, voters, supporters.

#143 crowdedelevatorfartz on 10.08.18 at 9:59 am

@#117 SteveinVic
“Calling an uncontroversial FBT a ‘head tax’ is just so ugly. Really poor taste.”
++++

Really?
Poor taste?
Need a time out in your safe place?
You must avoid all live stand up comedy shows or Netflix for fear of hearing uncomfortable, controversial, sexist, racist, “labelling” .
How conventionally boring “modern” life has become.

I guess my “name” really pushes the sensitivity buttons.

#144 KLNR on 10.08.18 at 10:04 am

@#57 PBrasseur on 10.07.18 at 9:01 pm
Such arbitrary extortion should be illegal but with our activists juges appointed by socialists politicians not a chance.

I wonder if Trump was referring to Canada when he was talking about s**those countries, maybe he should….
__________________________
Life is pretty damn amazing here in Canada, TO specifically for me.
I like to stay grounded though so I often come here to peruse the comments. thank you curmudgeons, you know who you are. ahem, ustabe, pbrasseur, dolce vida, stanb…

#145 crowdedelevatorfartz on 10.08.18 at 10:05 am

@#127 Another Deckchair
“Pull everybody down to the same level; no new businesses started, no new authors, no new Canadian TV shows, nobody running the government (hmmm…!)

++++
You left out the taxpayer funded govt employee pension plans…….

That sounds like the current CBC’s version of “utopia” .

#146 NoName on 10.08.18 at 10:06 am

#131 jess on 10.08.18 at 8:52 am
hey trumpian tin hatters hear ye

https://paulromer.net/economic-growth/

Interesting read that was, Yoda Jedi Master would say, but…

Another chart from stats canada about canadian wage growth for almost same period of time, i don’t understand why they stopped on 2011, maybe salaries and wages are making very steep comeback down to 1980s levels.

https://www150.statcan.gc.ca/n1/pub/11f0019m/2013347/ct002-eng.htm

And here is similar chart for us, that goes back only to 1998.

https://www.frbatlanta.org/chcs/wage-growth-tracker?panel=1


Of topic but now that shenzhen was mentioned supermicro there…

I have this super smart neboughr two house over, when i need computor advice he is my go to guy, knows everything.

So yesterday i send him an email about asking does he knows anything more about this supermicro fiasco, he obviously miss read it and replays back are you planning on building crypto mining machine… Now that got me wondering is where are all those stolen bitcoin went.

https://cryptomining-blog.com/tag/supermicro/

( Those upside down sentences what you guys are reading it here i am using in real life to, much more interesting! )

#147 Steven Rowlandson on 10.08.18 at 10:06 am

The real estate market is genocide? You need help. – Garth

Yes! I need billions of dollars, the powers of government, an army of law enforcers ,prosecutors and prison guards to bring the genocidal real estate market and its fans for to justice for their crimes against humanity. I am sure the list of defendants would cut cross all races, income groups , ideologies ,sexuality
and religions. Therefore we will not be bigoted or communist about it. The Canadian swamp would be drained by the process to a large degree. Genocide is more than gas chambers and firing squads. It is often a process that leads to the end of a group through no fault of its own in whole or in part by any means.
I have no doubt that the desire to profit from real estate exists deliberately and regardless of the cost to society as a whole or members there of. This is the equivalent to intent to destroy by making the cost of life too high for the sake of profits. In the case of real estate it is to profit even if it destroys by any means. Poverty, celibacy, deprivation of habitat, exposure to crime, disease and environmental factors and prevention of family formation…. People have swapped their morals for money and it must end Garth.
Remember real estate is only a place to live and work.
It isn’t an investment.

Seven in ten Canadians own real estate. Your genocide argument must be satirical. Or, you need help. Can I recommend a psychiatrist in Kelowna? – Garth

#148 The Great Gazoo on 10.08.18 at 10:11 am

Interesting article in the G&M this morning entitled:

“Are young Canadians giving up their big city dreams?”

Here is a key excerpt that I did not know about inter-provincial movement of people OUT of Toronto and Vancouver:

“Stats around whether younger Canadians are choosing to stay closer to home are still sparse, though Statistics Canada did find that between 2012 and 2017 Toronto’s net interprovincial migration – the difference between the number of people moving into Toronto and moving out of it and into different areas of the province – was minus 142,465. British Columbia’s Lower Mainland, which includes Vancouver, also saw more people leaving than arriving, with a net interprovincial migration of minus 18,670.

While Statscan doesn’t say why these cities are experiencing these trends, Patrick Adler, a research associate at Toronto’s Martin Prosperity Institute, says “there might be an aversion to the high sticker prices on property in Toronto or Vancouver.” ”

No kidding – would have thought Van would be as high or higher than Toronto.

Maybe some are reading this blog and following Garth’s advice. Important trend that will likely continue until prices come back to some sense of normalcy.

#149 KLNR on 10.08.18 at 10:23 am

@#106 Matt on 10.08.18 at 12:20 am
Personally I love this tax! I live in the Burbs of Vancouver in a plane Jane house that I bought for $400k (nearly paid off) that peaked over $900k. My problem, the next step up (what I want) went from $650k to $1.5+ million. I’m 30 and my mortgage to upgrade would be more then my original house. I rent the basement, invest and make $180k per year at my day Job in Oil and Gas. Personally the more all these factors pummel the housing market the more luxurious my life will be (bigger house and less employment income to buy it) and my hard work and saving will mean more. I’m a conservative thinker, but realize nothing is free market about houses so using tax to punish people who don’t pay income tax here is goodwith me. My first choice would be abolish the ALR and build American style freeways to open up tons of land around Vancouver to pummel prices and huge me buying power by dew flying older folks housing wealth. Why should I give a rats ass about people who by birth age got opportunities I never had? I don’t expect them or the government to care about me, I’m self sufficient so why protect their wealth at my expense.
_______________________
lololol, typical conservative. want less gov involvement but if it benefits me, me, me, i’m ok with its.

More like a typical troll. – Garth

#150 Tina Elyser on 10.08.18 at 10:25 am

When the NDP and other left leaning parties increase electricity costs, heating costs, gasoline costs, housing costs etc. etc. etc. for Canadians through their green energy and green tax, carbon tax, green regulations and other policies through that make everyone’s cost of living less and less affordable.

What do you call that? It is called B.S. The more they tax, over regulate or put in destructive regulations, they make it just more impossible for every worker, employer, business and Canadian in general to survive and live.

The same people they help to claim, lower to middle class Canadians are hurt not helped in the process. Two faced liars is what they are, plain and simple.

#151 MF on 10.08.18 at 10:26 am

120 Howard

Haha yeah that’s right. If he doesn’t like it then he can just get up move to where the tax doesn’t apply.

Maybe Yellowknife or Gananoque?

That logic is such BS.

MF

Try Montreal, Toronto or Halifax. – Garth

#152 Silver on 10.08.18 at 10:31 am

I love how all this winey crowd thinks a drop in prices like they want will leave the economy intact, and they will have mountains of cash with which to buy a home without “working and saving” for a good period of time… try sitting with the “educated university crowd for a while.

… what do you mean i have to give up my three destination holidays a month to save… so i can buy a house.

homes should be a right… and i expect a 5000 square foot starter home now…

their glasses are full of the tears made from their whining…

people are going to get exactly what they asked for and deserve.

beware what you ask for…. you just might get it

#153 Daughter of Ponzi on 10.08.18 at 10:38 am

As stated many times on this blog, home ownership is not a right in this country. If keeping two houses is too expensive for this guy, he can sell the second home and rent when in Kelowna. What is the problem Garth?

Taxes need to be fairly and justly applied, not capriciously. So many whiny, envious, vindictive people here. Disappointing. – Garth

#154 Howard on 10.08.18 at 10:46 am

#143 crowdedelevatorfartz on 10.08.18 at 9:59 am

@#117 SteveinVic
“Calling an uncontroversial FBT a ‘head tax’ is just so ugly. Really poor taste.”
++++

Really?
Poor taste?
Need a time out in your safe place?
You must avoid all live stand up comedy shows or Netflix for fear of hearing uncomfortable, controversial, sexist, racist, “labelling” .
How conventionally boring “modern” life has become.

I guess my “name” really pushes the sensitivity buttons.

———————————————

Can you calm down? Pointing out that something is in poor taste is not the same thing as shrieking and yelling and demanding a safe space or demanding that opposing opinions be silenced. Learn a little nuance will you.

And if you knew anything about comedy, it’s usually only funny if it pokes fun at real stereotypes (why do you think Russell Peters is so hilarious?). There has to be a link between the joke and reality. Otherwise it will elicit a few eyerolls or befuddled grimaces and not much more. Such is the case comparing the spec tax to a head tax.

#155 Spectacle on 10.08.18 at 10:55 am

#143 crowdedelevatorfartz on 10.08.18 at 9:59 am
@#117 SteveinVic
“Calling an uncontroversial FBT a ‘head tax’ is just so ugly. Really poor taste.”
++++

Really?
Poor taste?
Need a time out in your safe place?
You must avoid all live stand up comedy shows or Netflix for fear of hearing uncomfortable, controversial, sexist, racist, “labelling” .
How conventionally boring “modern” life has become.

I guess my “name” really pushes the sensitivity buttons.
————————//////////————–
…or at least the ” Close elevator door button” !

Great point Crowded :
Comedian Joe Rogan, has a Brand New Netflix comedy special out, and it is Bang-Point-on this very topic.

Just says the things we barely get time to think about, the decline of our society from stupid influences (criminal clinton actions and soros etc ) , HAIR BUN IDIOCY, .

Highly recommend it to everyone, speaks to the real problem of nearly everything we Rant about on here Thanks to the Mercy of Sir Turner.
Even brings up Dogs ( Good ) and cats.

Oops, ding, here is my floor….Cheers

#156 Johnny on 10.08.18 at 11:00 am

1% is a lot? Sorry, most US cities have property taxes over 1%. B.C. property taxes are way too low.

Homes are not investments. If you want to invest buy an ETF or AAPL. Why anyone would want to “invest” in RE where jealousy can destroy your wealth and liquidity at a whim is beyond me. And as for tenants? Being a landlord is way more work an hassle than it’s worth.

This is not a property tax. It’s a surtax. – Garth

——

Sorry Garth a tax is a tax. I don’t care what you call it. This is like a property tax on different class of owners. B.C. still has low taxes on properties for owners of principal residences.

I’m a capitalist but don’t see the problem with this tax. Mostly because this market has been way distorted and there was a lot of illegal money driving this along with low rates.

I give up. Enjoy your province’s ideologically-pure, uber-taxed, inexorable decline. – Garth

#157 Johnny on 10.08.18 at 11:03 am

Isnt this Gerry’s principal residence? I know lots of people have their home here but work in Alberta.

Many professionals must have principal residences where they are licensed. – Garth

—-

Not true. In B.C. all you need is a PO Box for docs.

Not licensed n BC. – Garth

#158 NoName on 10.08.18 at 11:18 am

interesting podcast, pay attention around 8m:30s.

https://risky.biz/RB516_feature/

#159 PEI farewell on 10.08.18 at 11:20 am

Property taxes in PEI are set the same for everyone, but residents get a 50% deduction, effectively meaning that non-residents do pay 100% more then the locals.

When I asked about that, locals told me it was because they didn’t want to see outsiders coming in and buying up all their waterfront, driving up the prices. We were to stay in their rental accommodations.

Looking at the house cost plus the $6-20,000 I spent per year on my house vs the cost of renting, I’m inclined to agree. They can have the second residence, and I’ll take my money elsewhere. And this way I’m not locked into visiting only PEI every summer – I hear NS is nice.

If I’d pulled out at the beginning the PEI economy would be 1/2 million the poorer. What if all the “come-from-away’s” did that? You bet we contribute – massively to the local economy.

Incorrect. Taxes at 50% higher for non-locals, not 100% more. And those who live there 183 days per year pay no surtax. – Garth

#160 A Dollar is a Dollar is a Dollar on 10.08.18 at 11:21 am

To be respected and effective taxes must be faur and equally applied. Slapping people because they’ve had a family cottage for decades, for example, is unjustifiable. High real estate taxes will not benefit those who covet some. Just the opposite. But, you will learn. – Garth

Exactly, Garth.

You pejoratively call this an “envy tax”.

So then, you would of course agree that the lower tax rate on stock market gains should be called an “entitled, superiority complex, unsubstantiated, antiquated, mostly wealthy-class white male privileged non-tax”.

To do anything less simply makes you a complete hypocrite, unwilling to apply equal standards of reason and fairness.

Surely, that is not you…?

ALL DOLLARS ARE EQUAL. TAX THEM THE SAME.

PERIOD.

Those who risk capital, especially when it is invested in the economy (not in a bank account), deserve to be taxed less. Without that incentive, why take the chance? The economy would wither. – Garth

#161 georgist on 10.08.18 at 11:37 am

> Humans do not buy things that are getting cheaper, particularly when jobs are in peril.

This is old-style economic thinking, that doesn’t bear out.

I’m typing this on a computer. These have gotten cheaper since the year of their creation. I knew when I bought it I could get the same spec a year later for a lower price. But I needed one now.

Same for cars.

Why on earth would sinking all our labour into land that *already exists*, that requires that we go into huge debt which allows bankers to dip into our wages via interest payments, be a good thing?

How will they release this equity when they need somewhere to live until they die?

Printing fake wealth by giving with one hand (yay equity!) and taking with the other (yay interest repayments and 30 year mortgages) is not sane. What’s more, you can only continue to give free equity by having prices rise above wages so long as rates keep going down. This has a lower bound of zero. We hit that.

Honestly Garth, your reasoning only makes sense at a fixed point in time, post fact. Once you step back and extrapolate, most people can see it’s a highway to nowhere.

You should have realised this before you allowed the Homebuyer’s Plan. It’s a can kicking exercise that fails to reason beyond the immediate horizon. We can all fix the economy until the end of the week.

#162 crowdedelevatorfartz on 10.08.18 at 11:38 am

Totally off subject.

The NDP created “govt car insurance”( ICBC) in BC in the 1970’s and while it became a huge cash cow for successive govts of all political stripes( NDP, Socred, Liberal)…..now it is hitting the proverbial “wall” financially.

The average cost of car insurance here is $2000 per year. ( price assumes an excellent safe driving record ie no accidents for at least 5 – 10 years. Assumes you are not driving a “luxury” car ie one worth 100k or more. Assumes minimal liability coverage and fire , theft, collision).
Side note. A friend’s 17 year old son purchased a 10 year old “beater” for $2500 and is paying….$4500/year as a “New Driver”….thus the days of young kids learning to drive are pretty much done in BC.
ICBC rates are expected to increase substantially in the next few years since the NDP have regained power and the Minister in charge has declared ICBC’s finances (after reviewing the books natch) “a dumpster fire”….
We lotus eaters are nervously awaiting annual 10% (or more) car insurance rate increases over the next few years.
Just curious as to what other blog dogs are paying for car insurance Canada wide as opposed to socialist BC.
Assume 5 -10 year accident free “safe driver” discount.
Assume 5 year old vehicle now worth aprox 25k.
Assume basic insurance (PLPD) and fire,theft,collision.

#163 Vampire studies on 10.08.18 at 11:43 am

86 Remembrance – yes I understand that you can have multiple PRs over your life. Just not at the same time. The gain made on the Kelowna prop from the time he bought until the time he declares it his PR is deemed a cap gain. So $500k, half of that taxable.

123 Howard – Gerry will enjoy a tax free cap gain on the condo if it has always been his PR. What I haven’t figured out yet is when he has to actually pay the cap gain on the Kelowna prop. I did some googling and he may be able to defer that until he actually sells that property.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate/changes-use.html

Now if the Kelowna prop loses value, Gerry is still on the hook for the $500k gain recognized at the time of the deemed disposition.

I hope he got some good tax advice.

#164 georgist on 10.08.18 at 11:47 am

I’d also add it’s a really weird thing to say “people don’t buy things that are falling in price” about housing.

People buy houses because they need to live. If housing fell to half the current price they’d still buy them.

And then they would have significantly *more* disposable income to spend.

This way, people who work more and create more wealth would have more disposable income. Isn’t that what you want?

Or do you want to go to the other end of the problem, and create more money by giving money to unproductive landlords, who are leaching off the rest of the economy, unproductive. They then drive the economy via unearned income which encourages even more parasitic activity instead of actual wealth creation.

This is what has occurred over the past 20 years as the parasitic side of the economy has driven us:

* banking – which is a cost center, the more it costs the worse we are off
* landlordism which is also a cost center

Who wants to encourage more of this versus more people doing actual things that *need* to be done, like food, education, healthcare ?

This is a classic failure of reasoning to separate out wealth creation versus wealth appropriation. Though this blog isn’t technical, which is fine, I can see from your reader comments that quite a few people are almost putting their finger on this, though they lack the terms to spell it out.

Landlords provide accommodation, and take a risk in doing so. They do not leech. – Garth

#165 Remembrancer on 10.08.18 at 11:49 am

#42
#140 X on 10.08.18 at 9:50 am
“When a property owner holds onto vacant homes and benefits from rising property value, that is speculation.”

Re#42-This will probably happen a little. I don’t think most people avoid taxes to be greedy, but moreso when they feel they have been treated unfairly.
—————————————————————–Capital gains tax is payable on the differential of amount paid + expenses and amount of appreciation at sale. Anyone who might complain about tax dodging maybe should be pushing for better enforcement instead…

#166 Monster Box on 10.08.18 at 11:55 am

#99 Smoking Man on 10.07.18 at 11:34 pm
When you punish success and reward stupidity and lazyness you become Cuba, Venezuela.

Money and brains have wings. You frighten any one of them they fly away and you are left with total iditots and crooks in power.

I escaped. Even Commie California is better than 53% income tax Canada. I’m not the only one that fleed.

Where is John Galt

#MEGA
————————-

John Galt is like me… flew away to Mexico and loving it.

#167 Remembrancer on 10.08.18 at 12:11 pm

#123 Howard on 10.08.18 at 5:21 am
#76 Vampire studies on 10.07.18 at 9:58 pm

As per CRA he needs to live in the prior secondary residence for 2 years after selling the primary residence for it to be the new primary residence…

#168 georgist on 10.08.18 at 12:14 pm

> Landlords provide accommodation, and take a risk in doing so. They do not leech. – Garth

But most of the cost of renting is the cost of carry on the debt for the land, for most of the accommodation (urban centers).

Landlords are distributed debt collectors for the banks, which can create unlimited fiat (see BoE and BoA papers for agreement on this).

Landlords do provide accommodation, I agree. This is a building *on* the land. They add value here and should be rewarded for this. Most landlords don’t build anything, in reality, they exploit decreasing debt costs in a world of finite land.

So:

1. let’s tax the unimproved value of land to capture the societal value of the land for society, not for the banks who can create fiat at will

2. let’s not tax the *improved* value of land because if someone builds a 5 story mansion block that provides safe, clean, warm accommodation for people they deserve to gain more from this than the guy running an asphalt car park next door

3. let’s not tax labour, which creates wealth, which we want more of when people are willing to sell it

4. let’s stop banks from running countries into the ground via high land prices, which they can always, always increase by making it more rewarding to appropriate wealth via land speculation.

This is the plan that proponents of land value tax support.

They want people who add more value to be rewarded more. They don’t want communism. They can just see that we are being taken for a ride by the bankers and land speculators.

As could many, many economists throughout history. Such as Adam Smith. Ricardo. Friedman.

But if you just look very simply at the system and say “it works, this land speculator made a profit so he *must* be adding value”, you won’t reach this conclusion. Life is more complex than this, the state creates an unlevel playing field via tax breaks (capital gains), safety nets (CMCH), privileges (money creation).

I know you know all this, but you seem to have a blind spot when it comes to land.

Land is not the basis of wealth. Basing a tax system upon it is as ludicrous as thinking we can return to the gold standard. – Garth

#169 Spectacle on 10.08.18 at 12:17 pm

156# crowdedelevatorfartz on 10.08.18 at 11:38 am
Totally off subject.

The NDP created “govt car insurance”( ICBC) in BC in the 1970’s and while it became a huge cash cow for successive govts of all political stripes( NDP, Socred, Liberal)…..now it is hitting the proverbial “wall” financially.

The average cost of car insurance here is $2000 per year. ( price assumes an excellent safe driving record ie no accidents for at least 5 – 10 years. Assumes you are not driving a “luxury” car ie one worth 100k or more. Assumes minimal liability coverage….

ICBC rates are expected to increase substantially in the next few years since the NDP have regained power and the Minister in charge has declared ICBC’s finances (after reviewing the books natch) “a dumpster fire”….
We lotus eaters are nervously awaiting annual 10% (or more
Just curious as to what other blog dogs are paying for car insurance Canada wide as opposed to socialist BC.
Assume 5 -10 year accident free “safe driver” discount.
Assume 5 year old vehicle now worth aprox 25k.
Assume basic insurance (PLPD) and fire,theft,collision.

—– good question ———

I have 3 vehicles. The Suv and Pick up. Both zero real value, no collision insurance coverage on either. Yes, about $150 per month, $1700 per year! Ouch.

At this time, I chose not to pay $600-$800 in new car leases, plus $250 for insurance on them each.

Note :: In BC a good Dash Camera is essential !

Second time this year someone ( wink ; ) ) drove Into the Dollar store. 2nd time people have driven through a brick/cedar fence, up the curb at an intersection. And these people don’t smoke drugs!!

I think your point of car insurance, and related running costs are relevant to this blog. Just add it up over ten years. Good math, dumb choice to go that expensive vehicle route. Cars are now dropping like elevators with a broken security cable .

#170 Johnny on 10.08.18 at 12:18 pm

I don’t get why Garth is always crying over people who have two or more homes. It is sad to see houses that sit empty much of the year because of some ones frivolous ways. I am supposed to sympathize or care about upper income people who need to pay some money to keep their unnecessary second home..seriously?? These people can just sell and will often have made hundreds of thousands in profits on their second home.

Garth has been going on and on about how overpriced real estate is and when the government finally does something about it he whines and rails about how unfair this is to these precious 1 percenters. Yes it will collapse real estate prices but this is good and necessary..yes it will cause a bad and long recession but out of these depths a real fundamental recovery can take place with affordable real estate for all.

You must be toking good stuff. Out of recessions comes misery – and not for the 1%ers. – Garth

#171 No More Mister Nice Guy on 10.08.18 at 12:20 pm

Counter measures to Spec Tax
from BC resident with 2 homes

1. Let the government use tax collected
from me to look after community needs.
I will end my generous donations
To BC Charities. Will send elsewhere.
2. I will raise prices on all products
and services that I provide to BC customers.
3. Whatever is required to balance the books
And recover the tax.
4. I would be totally content to have my
BC income tax rate raised instead of this new tax.
If I do well I am happy to share. If I have a no
profit Then I will pay No BC tax.

#172 Figure it Out on 10.08.18 at 12:35 pm

Taxes need to be fairly and justly applied, not capriciously.

Caprice? Has been widely debated for some time, current government ran on it and got a mandate, implementation was telegraphed and expected, and enjoys broad voter support, even among homeowners.

Caprice is when you wake up one crisp October morning and decide, out of the blue, to impose a new tax on income trusts, widely held by retirees, at a stroke lowering their incomes and decimating their asset values.

The North Remembers.

One capricious act does not justify another. At the time I resolutely criticized the federal government for its betrayal. – Garth

#173 Barb on 10.08.18 at 12:43 pm

I couldn’t even get through all the comments, which I usually do, due to the sheer number of socialists (the enviers) here.

It makes me ill they applaud these discriminatory and punitive practices, even recommending additional taxes on wealth by the B.C. government!

Two NDP terms in the 90s seemed to cure many residents who wondered if anything could have been worse. And along comes Horgan’s group of leftovers from that era…proving we hadn’t seen nuthin’ yet!

…Gerald’s profession is needed. Not for “us”, but for the “revolutionists”, which this time in B.C. government surely has become.

With credit to Churchill, socialism “is the philosophy of failure, the creed of ignorance, and the gospel of envy. Its inherent virtue is the equal sharing of misery.”

#174 georgist on 10.08.18 at 12:50 pm

The trouble with not being well-read, and seeing the world through the very simplistic lens of “socialism” and “capitalism” (americanism?)

#169 Barb

> due to the sheer number of socialists (the enviers) here.

> With credit to Churchill, socialism “is the philosophy of failure, the creed of ignorance, and the gospel of envy. Its inherent virtue is the equal sharing of misery.”

So here is a speech by Churchill in 1909 advocating Land Value Tax.

http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html

Did you know Churchill (and Einstein) were proponents of Land Value Tax? And Friedman. And Adam Smith.

You do now.

1909. Now I know you’re a kook. – Garth

#175 Remembrancer on 10.08.18 at 12:50 pm

86 Remembrance – yes I understand that you can have multiple PRs over your life. Just not at the same time. The gain made on the Kelowna prop from the time he bought until the time he declares it his PR is deemed a cap gain. So $500k, half of that taxable.

123 Howard – Gerry will enjoy a tax free cap gain on the condo if it has always been his PR. What I haven’t figured out yet is when he has to actually pay the cap gain on the Kelowna prop. I did some googling and he may be able to defer that until he actually sells that property.
—————————————————————-
Vampire, as I read the relevant tax sections its a binary calculation of the use test in the scenario Garth describes: after 2 years of declared principal residence of the BC property, its considered primary… Unless, if that formerly 2nd property was used for (reported though there should be no other kind) income such as a rental and later converted to primary, then yes, cap gains calculations apply at time of status change, not at sale…

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate/changes-use.html

Garth’s story suggests a simpler scenario – AB primary residence and BC vacation property not used for income; personal use only before converting to primary…

#176 Silent (mostly) Observer on 10.08.18 at 1:06 pm

Something tells me Gerry-like most property owners in BC-were very happy over the past 15 years watching their property values exceed any regular market returns that follow recognized investment principles. Since 2008, you’ve been preaching how unrealistic this market was and how it would end badly. Chaos breeds chaos. It stands to reason that it was chaotic on the way up, it will be equally chaotic on the way down.

Just wait to see what will happen if Eby has his way and starts to seize properties. It will only take one or two to cause an immediate selloff to move money to a safer place. If you have any doubt, grab some popcorn, sit back, and watch.

You support a government seizing private property? There’s a name for that. – Garth

#177 Daughter of Ponzi on 10.08.18 at 1:17 pm

This guy has many options which most Canadians don’t. Do we need to be sorry for him for perhaps not being able to afford to pay taxes on TWO homes he ones? This blog has 100% turned into rich guy whining. Completely out of touch with regular people.

Since when was this for regular people? We just thought you needed a drink, or something. – Garth

#178 MF on 10.08.18 at 1:34 pm

#152 Silver on 10.08.18 at 10:31 am

Did everyone who put 5% down “work and save” to buy their overpriced property?

How come people like you didn’t complain when the government gave you the gift of home equity? That IS the main reason why prices are so high..not your investing savvy.

MF

#179 NoName on 10.08.18 at 1:36 pm

Iam thinking diggin out 15yrs dell dimension out of the box and start using Outlook…

https://www.cnbc.com/2018/10/08/google-reportedly-exposed-private-data-of-at-least-hundreds-of-thousands-of-plus-users.html

#180 jerry on 10.08.18 at 1:38 pm

“Slapping people because they’ve had a family cottage for decades, for example, is unjustifiable”

Please read the legislation. Cottages as most define them are exempt from the speculation tax. 95% of the land in BC is exempt from the tax. The only way you pay the tax is if you have multiple homes or vacation homes in one of the few designated cities that is actually in the city. These are the cities where people have gone bonkers and speculation is rampant. What do you think Gerry would say if his children or grand children in Alberta had to pay a million dollars for a run down home. I can guarantee you he would be one of the first to be calling on his province to implement a similar tax. It is hard for people who do not live here to realize how crazy people have become over real estate. It has turned many in this province in to mindless foaming at the mouth zombies. This legislation is fully supported by most of the people of BC and will help bring sanity back to these cities

https://globalnews.ca/news/4196524/bc-ndp-housing-bc-liberals-poll/

It is impossible to make assets cheaper by taxing them more without caving the entire market and, in the case of BC, the provincial economy. Jeez, people, grow up. The tax-&-spend gang you elected is zooming you. – Garth

#181 reynolds531 on 10.08.18 at 1:38 pm

On one hand the empty house three doors down bugs the crap out of me. On the other hand reading the comments I stop listening at the word “fiat”.

#182 MF on 10.08.18 at 1:38 pm

#166 Monster Box on 10.08.18 at 11:55 am

..and where did you make your money/fortune? What country gave you the opportunity to build it?

Why didn’t you grow up in Mexico?

MF

#183 rental property math on 10.08.18 at 1:42 pm

#86 Remembrancer on 10.07.18 at 10:37 pm
#76 Vampire studies on 10.07.18 at 9:58 pm
65 thresher – one of the properties will be subject to cap gains. In this case it sounds like Gerry has declared the condo as his principal rez so he will not pay gains on this, so the Kelowna property would be subject to the gain. However, depending on how he has treated the property tax-wise, he may be able to defer that until he actually sells it.
————————————————————-
The story was clear, dude plans to retire to BC and that would be his primary residence in the future.

CRA is actually clear on this, sell primary residence, live at least 2 years in former secondary residence and that becomes your new primary residence for cap gains exemption going forward… i.e. You aren’t restricted to one primary residence for a life time in Canada, yet anyway…

———————-
If I rented a property for 6 years and then moved into it for two.. I don’t have to pay capital gains tax? I’m pretty sure you have to pay capital gains tax once you change the use of the property.

#184 IHCTD9 on 10.08.18 at 1:44 pm

#73 Figure it Out on 10.07.18 at 9:36 pm

Then he said to them, “Give therefore to the emperor the things that are the emperor’s, and to God the things that are God’s.” — Matthew 22:15-22

…Take it for what it’s worth — I’m an atheist
———-

Yeah but, what if what Caesar decides what is his amounts to 99%?

#185 Daughter of Ponzi on 10.08.18 at 1:46 pm

On regular basis you advise people to rent if the housing is too expensive to buy or move out of Van or TO if renting is too expensive. Your buddy Gerry can do the same if he can’t afford taxes on his second home.
And what BC government is doing is absolutely necessery and just. And it is something they are clearly mandated by the democratic majority to do. And as you can see this is hitting housing sales and prices hard in BC. And this is only the beginning.
BTW “Delusional” is very appropriate title for this blog. You got that right.

Actually, the NDP-Green coalition government was elected by nobody. They cooked it up in Victoria. Liberals received the highest number of votes among individual parties. So much for democracy. – Garth

#186 Lee on 10.08.18 at 1:47 pm

You should have a filter that allows us to download only entries you comment on. Would be real time-saver.

#187 Nemesis on 10.08.18 at 1:59 pm

“Land is not the basis of wealth. Basing a tax system upon it is as ludicrous as thinking we can return to the gold standard.” – ViscountGartholomew VIIthMarquessOfLunenberg

[Guardian] – Duke’s £9bn inheritance prompts call for tax overhaul

https://www.theguardian.com/business/2016/aug/11/duke-westminster-hugh-grosvenor-inheritance-tax-reform

#188 Fluorine on 10.08.18 at 2:00 pm

This is the first time the comment section has been scary…

Sure, it’s been inane, political, bizarre… but I sincerely hope that the vast majority of the comments coming from people who purport to live in BC are just trolls posting to get reactions on a blog with know high visibility.

~Flu

#189 Vlad the inhaler on 10.08.18 at 2:02 pm

The tradition is 99% support 1%

Canada’s population may qualify us for inclusion in the Pakistani Peruvian Axis

http://www.freerepublic.com/focus/f-news/2807571/posts

#190 IHCTD9 on 10.08.18 at 2:15 pm

#162 crowdedelevatorfartz on 10.08.18 at 11:38 am
Totally off subject.

…Just curious as to what other blog dogs are paying for car insurance Canada wide as opposed to socialist BC.
———

15 year old pickup, worth about 10K now, ~43K new in 03, full coverage including 2 Mil liability and collision, perfect driving record, $600.00/yr.

6 year old Mazda 3, 800.00/yr same coverage with a couple speeding tickets.

09 Raptor 700R + 14 Grizzly 700 SE 310.00 /yr combined (can be road driven in my area).

Ontario, private Insurance. I think with private insurance, your rates might benefit if you don’t cost them money, whereas with government insurance it’s “social”, so you pay more to cover the crappy drivers.

Is that 2000.00 average cost number based on just one vehicle?

#191 Lorne on 10.08.18 at 2:23 pm

#128 FOUR FINGERS WATSON on 10.08.18 at 8:16 am
#107 Lorne on 10.08.18 at 12:36 am
#59 FOUR FINGERS WATSON on 10.07.18 at 9:04 pm
#41 Lorne
….and, you may have noticed, they are not in favour of the pipeline as presented.
…………………………..

NDP supported the pipeline prior to the coalition with the Greens . Anti pipeline stance was the cost of the Green co-operation. I was paying attention.
…….
Another couple of statements that are totally false. Nice to say you were paying attention when you clearly were not!
https://globalnews.ca/news/3426234/b-c-ndp-vows-to-fight-kinder-morgan-pipeline-expansion-but-wont-say-how/#107
…………………………………….

Last week, Horgan suggested he was open to supporting the pipeline.
https://theprovince.com/news/bc-politics/christy-clark-and-john-horgan-display-an-utter-lack-of-leadership-on-pipeline-politics
………
NICE TRY BUT, that is not what your original statement said!

“NDP supported the pipeline prior to the coalition with the Greens . Anti pipeline stance was the cost of the Green co-operation. I was paying attention.”

#192 Linda on 10.08.18 at 2:32 pm

‘Meanwhile, families are crowded into apartments’. This being a justification for the additional tax. So let us look at the numbers for a minute. As per a quick Google search with current (October 2018) results, the average price of a 3 bedroom house in Vancouver is $2 million as per the BC realtor site. I am presuming the apartment family is a typical 2 adults, 2 children scenario. Thus 3 bedrooms would be needed. The typical rent for a 2 bedroom apartment (hence the crowded scenario) is $2,650 per month. So let us say that the tax policies will result in housing prices decreasing by 50%. Now the average price of a 3 bedroom house is only $1 million. The handy online mortgage calculator gives 3.39% for a 5 year fixed & states that with a 15% downpayment the mortgage would be $850,000 & cost $3,948 per month. Somehow I do not see a crowded apartment family having the funds to move up to a house purchase given their monthly housing costs would increase by at least 1/3. So this great housing fix doesn’t look like it will happen any time soon, even with the punitive tax. Housing prices will still be out of reach for the financially challenged, especially since mortgage rates are creeping higher.

As I said, it is a fairy tale irresponsible leaders have fed to gullible citizens. The fact is is believed underscores the financial illiteracy that helped lead to this situation. — Garth

#193 Lorne on 10.08.18 at 2:41 pm

#185 Daughter of Ponzi on 10.08.18 at 1:46 pm
On regular basis you advise people to rent if the housing is too expensive to buy or move out of Van or TO if renting is too expensive. Your buddy Gerry can do the same if he can’t afford taxes on his second home.
And what BC government is doing is absolutely necessery and just. And it is something they are clearly mandated by the democratic majority to do. And as you can see this is hitting housing sales and prices hard in BC. And this is only the beginning.
BTW “Delusional” is very appropriate title for this blog. You got that right.

Actually, the NDP-Green coalition government was elected by nobody. They cooked it up in Victoria. Liberals received the highest number of votes among individual parties. So much for democracy. – Garth
……..
Correct, they received 1566 votes province wide, more than the NDP, so both parties received ~40% of the total votes (of ~2 000 000 votes cast). The NDP/Green coalition received 57% of the votes cast….sounds like a REAL democratic majority, unlike the 40% that the Lieberals received

Coalition governments are not democratically elected. That does not make them illegitimate, but you cannot pretend that people who chose one party (Greens) equally supported the other (NDP). They did not. This was engineered by leaders to seize power. – Garth

#194 Remembrancer on 10.08.18 at 2:42 pm

#181 rental property math on 10.08.18 at 1:42 pm

If you rented it out then no – you are required to pay cap gains at time of change in status i.e. if there is a change in status that previously included designation as income producing…

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate/changes-use.html

#195 Penny Henny on 10.08.18 at 2:51 pm

#162 crowdedelevatorfartz on 10.08.18 at 11:38 am
Totally off subject.

Just curious as to what other blog dogs are paying for car insurance Canada wide as opposed to socialist BC.
Assume 5 -10 year accident free “safe driver” discount.
Assume 5 year old vehicle now worth aprox 25k.

//////////////////////
2017 Mustang and 2018 Escape.
Pleasure use only, no work.
20 year claim free.
$1300 for both vehicles, 2 drivers

Welland, Ont
Assume basic insurance (PLPD) and fire,theft,collision.

#196 crowdedelevatorfartz on 10.08.18 at 3:15 pm

@#191 IDHCT9
“Is that 2000.00 average cost number based on just one vehicle?”
+++++

Yup, 1 vehicle : 2014 Tacoma 4×4
ICBC Subtracted the 10 year accident free safe driving “discount” of 43%
PLPD, fire theft , collision ( with $1000 deductable)
All in…… $1975.00 for the one vehicle per year.

My co worker has the same driving credentials.
She drives a 2012 Hyundai worth about 20k.
She renewed last week…..$1975.00 for the year.

A new driver without the 43% “discount” would be paying over $3400 per year.

And the NDP has warned……rates are going up.

#197 Long-Time Lurker on 10.08.18 at 3:21 pm

I give up. Enjoy your province’s ideologically-pure, uber-taxed, inexorable decline. – Garth

I knew it would get ugly here yesterday and I was at a loss for words as a result.

Thank you, Garth, for continuing your blog and Happy Thanksgiving!

The road to hell is paved with good intentions. (Applicable here in so many ways.)

#198 crowdedelevatorfartz on 10.08.18 at 3:23 pm

@#180 jerry
“What do you think Gerry would say if his children or grand children in Alberta had to pay a million dollars for a run down home. I can guarantee you he would be one of the first to be calling on his province to implement a similar tax. It is hard for people who do not live here to realize how crazy people have become over real estate. It has turned many in this province in to mindless foaming at the mouth zombies. This legislation is fully supported by most of the people of BC and will help bring sanity back to these cities’

+++++

100% agreement.
I wasnt in a taxi at the Vancouver airport a few weeks ago longer than 30 seconds and the driver started babbling about his 3 “investment” houses.

The whole market needs a reboot and if that means a major economic downturn that will be blamed on the naive dippers( instead of the Liberals who pumped it up) ……. so ….be…….it.
No one can afford to live( rent OR own) here any more.

#199 jess on 10.08.18 at 4:18 pm

“strongmen ”

https://www.euractiv.com/section/justice-home-affairs/news/romanias-strongman-urged-to-resign-with-ruling-party-in-free-fall/

=====

4 September, Lavrov said:

“We only kindly ask [the US side] to specify what is meant when we are accused of violating the INF. In turn, we make especially specific claims under the same agreement concerning the deployment in Europe (in Romania, and soon in Poland) of installations that can launch not only interceptor missiles, but also Tomahawks (impact cruise missiles).”

Romania is hosting a US missile shield capable of shooting down rockets from countries such as Iran that Washington says could one day reach major European cities.

trash talkin’?
But Hutchison’s comments Tuesday were the first time a high-ranking US official indicated that the Pentagon might consider anything more than diplomatic action, should the Russian missiles become operational.

#200 Johnny on 10.08.18 at 4:43 pm

You must be toking good stuff. Out of recessions comes misery – and not for the 1%ers. – Garth

So are you saying that you agree that we should outlaw recesssions which are or were a normal part of the economic cycle for eon??? I guess you really believe the central bankers are omnipotent and geniuses..its their financial engineering and keeping interest rates far too low for far too long that created the real estate bubble int he first place. What are you smoking Garth??

#201 John P on 10.08.18 at 5:00 pm

“Actually, the NDP-Green coalition government was elected by nobody. They cooked it up in Victoria. Liberals received the highest number of votes among individual parties. So much for democracy. – Garth”

Governments aren’t directly elected, they are formed by those who are elected. When no one party wins an outright majority forming a coalition is a way to overcome the impasse and provide the electorate with a functioning goverment.

To call this perfectly legitimate coalition government “cooked up” not only besmirches your many years of honourable public service but provides ammunition for extremists on both sides.

I said it was not illegitimate, but also not the democratic mandate that was suggested. Climb off your pedestal. – Garth

#202 jess on 10.08.18 at 5:17 pm

158 NoName on 10.08.18 at 11:18 am
pence’s diversion story !
maybe he should head over to salton city east jesus
created from discarded waste

salton sea ecological disaster

housing bust from the past

A ghost town in the making: How Salton Sea – California’s largest lake – went from bustling resort popular with celebrities to a ‘public health disaster’ where the remaining residents choke on toxic dust

The Salton Sea, California’s largest lake, was created by accident in 1905 and was transformed into a vacation hotspot by developers who built up the shoreline with resorts, hotels, yacht clubs and more
By the 1950s and 60s thousands flocked to relax at the Salton Sea, including celebrities like Frank Sinatra, but during the 70s tourism declined and the resort towns around the lake were left in disrepair”

https://www.dailymail.co.uk/news/article-5839677/A-ghost-town-making-Salton-Sea-went-busy-resorts-public-health-disaster.html

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

“strongmen ”

https://www.euractiv.com/section/justice-home-affairs/news/romanias-strongman-urged-to-resign-with-ruling-party-in-free-fall/

=====

4 September, Lavrov said:

“We only kindly ask [the US side] to specify what is meant when we are accused of violating the INF. In turn, we make especially specific claims under the same agreement concerning the deployment in Europe (in Romania, and soon in Poland) of installations that can launch not only interceptor missiles, but also Tomahawks (impact cruise missiles).”

Romania is hosting a US missile shield capable of shooting down rockets from countries such as Iran that Washington says could one day reach major European cities.

trash talkin’?
But Hutchison’s comments Tuesday were the first time a high-ranking US official indicated that the Pentagon might consider anything more than diplomatic action, should the Russian missiles become operational.

#203 Shawn Allen on 10.08.18 at 5:31 pm

Tax Fairness

Who can judge what is fair? It seems clear here almost everyone’s opinion is driven by the impact on themselves.

I see little objective reasoning.

Tax fairness is a tough question. Simplistic self-serving views unlikely to solve it.

Everyone involved in the discussion seems to have a conflict of interest… me included.

#204 Barb on 10.08.18 at 5:57 pm

GT, so much for Thanksgiving, huh?
You must be totally drained from reading today’s diatribes!

Pour yourself a couple of nice smooth Aberlours…
you deserve at least that for the moderating headaches.

#205 John P on 10.08.18 at 6:57 pm

“I said it was not illegitimate, but also not the democratic mandate that was suggested. Climb off your pedestal. – Garth”

I’ll give you that about legitimacy as you stated it in a later comment which I didn’t read yet. However the Liberals only won two more seats than the NDP in one of the closest elections in BC’s history. Libs popular vote tally was only 1500 more, that’s razor thin, yet somehow they managed two more seats? The joys of gerrymandering and FPTP.

Neither party had a majority to govern but a functioning government needs to be formed not “cooked up”, that kind of language is divisive.

NDP’s pre-election platform clearly outlined many of the steps they would take with regards to real estate in BC. The electorate were fully aware of this before voting. Do they have a mandate to implement them?

Mandates are fuzzy at best, does the electorate really like us or did the electorate vote for us because we were the lesser of two evils? Democratic governments the world over have governed successfully with far weaker mandates than the NDP and Green coalition.

Will the outcome of this coalition be a success or a disaster for BC, who knows? Residents of BC will have to live with those consequences.

#206 Kim Canosa on 10.08.18 at 7:40 pm

Since Canada and all governments and agencies, federal, provincial, municipal all over promised pensions, benefits to their public sector workers. We need a public sector pension and benefits tax of 35% to start and higher income earners 50%.

This should be done also for other benefits for all others that are still tax free like WSIB, social assistance, Federal supplements etc.

This way all the pension and benefits deficit in this country can be addressed. They don’t like paying for their crap and liek to tax only the rest of us. NDP, Liberal, Green, Communist party etc. are all part of the thievery class.

#207 Rentin on 10.09.18 at 12:40 am

Mr. Market taketh away and Mr. Market giveth back.

If realestate is not a sound investment, then nobody should get too emotional about the results….

#208 No More Mister Nice Guy on 10.09.18 at 12:47 am

The hard working wise wealthy guys will buy all the YVR housing before it ever gets cheap enough for the parasites. Cap rate just gets better with lower prices. Rents don’t drop easily. Government is our friend and scares away many potential Landlords with heavy rules. But the pros can handle that. Raise my BC income tax if I make big Money then we both win. CRA and BC govt have been my partners for all my working days. 70 now and still grinding at it.

#209 Guy in Calgary on 10.09.18 at 12:07 pm

#70 Poor Gerald on 10.07.18 at 9:22 pm
His spiritual home is only worth 900K.

900K for a place in Kelowna that we know is at least 1998 or older? What the hell is going on in BC with house prices?

And man, life much be so tough for Gerald.

Wait until we build the wall and make Alberta pay for it.

Just be lucky the NDP caved and cut this tax down by 50%.

They should have stuck with 2% plus having to rent the place out all year, not half the year.

Plays right into the vacationer rental slumlord hands where they rent the place out over the winter and kick the people out to price gouge summer vacationers for 15k over the summer.

Locals first.
—————————————————————-

You realize there are a large number of British Columbians that come and work in Alberta right? Same with East coasters. Do you hear people in Alberta complain that their jobs have been taken and that we should build a wall?

I assume you’re a troll or an idiot.

#210 Marco on 10.09.18 at 3:20 pm

So, fistful of nails, some lumber and glue on Queen property is DADA for me, not real estate. Tulip bulbs.
With a help of wind that real estate can fly. So scientific.

#211 Marco on 10.09.18 at 3:25 pm

And residents of BC make money by exporting marijuana in their gasoline and natural gas powered trucks as was described in some books about mafia.
They make a lot of money so it is logical that so called real estate is expensive.

#212 Marco on 10.09.18 at 3:36 pm

And always Dog Ford or Mike Harris will prevail on mind of such a fine people. Why tax rich when you can have more fun by depriving poor?

#213 Jake on 10.09.18 at 4:17 pm

Stop whining Gerry, pay the tax and shut up..

#214 SCD on 10.09.18 at 4:29 pm

Any chance of a Freedom Of Mobility challenge to this tax?

#215 Monster Box on 10.09.18 at 8:08 pm

#182 MF on 10.08.18 at 1:38 pm
#166 Monster Box on 10.08.18 at 11:55 am

..and where did you make your money/fortune? What country gave you the opportunity to build it?

Why didn’t you grow up in Mexico?

MF
————————————-

Hurricane’s coming and I should just hang around taking my medicine?

Even ‘Smoking Man’ isn’t that foolish.

The onus has always been to protect yourself, your loved ones as well as your assets. No need to be a martyr.

Sorry MF.. you may wish to be a sheeple, but not me. I should have done this 20 years ago. {grin}