The rental vacancy tax

Over at the Vancouver sun there’s an editorial by former BC supreme court justice Ian Pitfield proposing a rental vacancy tax.

This would be a tax that municipalities could impose to discourage vacant units held for speculation.

A vacancy tax would oblige a non-resident who beneficially owns housing accommodation in British Columbia, wherever the non-resident resides, to ensure that it is ordinarily occupied by the owner as a principal residence or available for rent at a competitive market rate. Failure to satisfy the requirements would result in liability for a vacancy tax equal to the monthly fair market rental value of the housing unit. The tax would be payable annually and not just at the time of purchase as is the case with the property purchase tax, or at the time of sale, as is the case with the income tax.A vacancy tax could increase the rental pool by some 15 per cent across the board, and by as much as 25 per cent or more in certain areas, if Mr. Yan’s estimate is correct. An increased supply of rental accommodation would also tend to put downward pressure on rents generally. The tax need not be seen as a bad thing by speculators. Avoiding the tax will produce income for the owner and offset the cost of owning and carrying the property in the course of speculation.

Read the full article here.

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Priced out Renter
Priced out Renter
7 years ago

Anon, completely agree.
75% of the population in Richmond is Asian, up from 60% 5 years ago.

YLtn
YLtn
7 years ago

@vote down.

Yea, I saw that after posting. I’d still go to the police though, they get enough complaints they will have to react. I do like the knee-capping idea though.

Anonymous
Anonymous
7 years ago

Makaya:

Garth’s audience is the Naive.

He changes is tune with the flow. He is “Mr.Flip Flop”.

He thinks there are no Immigrants from Asia coming and buying property…he thinks they were all born here. To Mislead…very evil..

MarKoz
7 years ago


Every time I see a realtor posting messages that suggest sellers should panic I take it with a grain of salt. Fear and greed are the realtor’s friends. When the market goes up they pitch greed (buy and make a fortune) and fear (tomorrow’s bargains so buy today! – buy now or be priced out forever!). When the market is down they pretty much only have fear (OMG! Cut your price and sell now or you are doomed!).

Mr X
Mr X
7 years ago

“The owner of Oakridge Centre and Westbank development have submitted an application that would double the size of the existing mall and add a new community centre and towers as high as 45 storeys.”

http://www.cbc.ca/news/canada/british-columbia/story/2013/05/29/bc-oakridge-redevelopment.html

jesse
7 years ago

” the bank doesn’t make money of the spread but what happens is that if GoC 5 year rate go up then the people who would be buying the MBSs from the banks will go for the bond instead”

No, banks make money on the spread to however they finance the loan. They don’t want to make money betting on the direction of interest rates and use various methods to minimize their risks on this front.

As I mentioned, in the past few years banks have seen very rich spreads and, not surprisingly, their profits are rich as well.

Makaya
Makaya
7 years ago

crap, the link didn’t work. Here it is: http://www.rosskay.com/index.html

Makaya
Makaya
7 years ago

Realtors are turning more bearish than the bears now! Garth posted an interesting link tonight: RossKay.com issues warning on home sales numbers to be reported in Canada, giving you a 60 to 90 Day lead time. For the first time, since 2008, RossKay.com is going live publicly with it’s industry leading Real Estate Sales Trends Index because of the drastic downward trends it has recorded since April 8th, 2013. Over the course of the last 9 weeks, our index has revealed a downward spiraling real estate marketplace, with results that will not reveal themselves in MLS sales data for another 60 to 90 days, when they will finally be reported by Organized Real Estate Associations. (…) What should the Consumer do? (…) For Sellers, As we have been advising our own clients since April of 2012, Sell and Sell Now.… Read more »

Anonymous
Anonymous
7 years ago

“The moral of this story is when you have been defrauded, don’t go to the industries “association” go to the police. The police will follow up criminally and the association will have to follow up professionally.” No they wont. The police are more of joke when it comes to fraud. As an example my wife had some cheques stolen from a gym locker along with her purse and $1000 of cash and jewellery. The person then wrote a bunch of cheques in their own name and tried to cash them at Money Mart. The cheques were reported stolen and the account was closed so they didn’t get anything but when we talked to the police they said they would not investigate it because the cheques were made out under $2500 each and they do not investigate fraud under that amount.… Read more »

slurker
slurker
7 years ago

Basically you are saying the bank doesn’t make money of the spread but what happens is that if GoC 5 year rate go up then the people who would be buying the MBSs from the banks will go for the bond instead?

jesse
7 years ago

” I’m honestly curious how this works and nowhere have I found any useful information except broad hand waving and graphs showing this spread”

You can estimate it by looking at NHA MBS prices to extract primary-secondary spread. I think CMHC publishes MBS rates, it’s a few 10s of BPS above risk-free since it’s fully government-backed.

Table V122526 gives the 5 year GIC, and that has about 35bps spread to the GoC 5y. MBSs are more variable and higher than that because of how they are structured.

omfgitslikegrouponbutforcondosftw
omfgitslikegrouponbutforcondosftw
7 years ago

The top results when you Google this realtor’s name are about him forging documents. In this day and age that locks you out of a huge swath of the job market (not the very bottom or the very top! 🙂 ) I actually feel a bit sorry for young people who get caught doing really stupid things like this. If it were me, going to jail for a few months relatively anonymously like in the old days would probably be a preferable punishment.

slurker
slurker
7 years ago

@94, jessee

That’s nice but nowhere does it explain how the originator of mortgage – the bank – is making money of the spread between the mortgage rate and GoC 5 year bond rate. I’m honestly curious how this works and nowhere have I found any useful information except broad hand waving and graphs showing this spread.

The BoC link site is pretty blunt on this topic, i.e. the chartered banks only need to settle their accounts at the end of the day to make sure they aren’t insolvent. That is their assets (credit at BoC+assets) is equal to or more than their liabilities (deposits+what they owe others) and since BoC has no reserve requirement for chartered banks it’s pretty straight forward.

paulb
7 years ago

New Listings 244
Price Changes 127
Sold Listings 115
TI:18422

http://www.paulboenisch.com

chilled
chilled
7 years ago

Vote Down The Facts Says:
May 29th, 2013 at 4:32 pm 110

The police didn’t follow up in this case after reviewing it. Read the last paragraph of vangrl’s article, above.

++++++++++

EXACTLY what I suggested yesterday. Go to the police with the civil matter? In British Columbia? BAHAHAWHAWHAW!!! Good luck. Even MORE “luck” is needed in the courts. Like I said, pay to get the ‘turds kneecaps dislodged, the ONLY justice possible in this clusterfuck.

Although, a bit of media attention is all it takes to have the “police review the case.”

emmi
emmi
7 years ago

vangrl link, stealing from one consumer is the only way these guys lose their license, but fraud that leads to market manipulation steals from everyone. But the BC realtors board isn’t going to give a hoot about market manipulation since that is to their benefit.

Vote Down The Facts
Vote Down The Facts
7 years ago

‘The moral of this story is when you have been defrauded, don’t go to the industries “association” go to the police. The police will follow up criminally and the association will have to follow up professionally’

The police didn’t follow up in this case after reviewing it. Read the last paragraph of vangrl’s article, above.

vangrl
vangrl
7 years ago

I bet that realtors clients (he has 18 listings right now) had no idea he had done this. Who would hire this guy knowing that?

this story should be shared on facebook for unsuspecting sellers and buyers.

http://bc.ctvnews.ca/who-s-policing-dishonest-b-c-realtors-1.1300858

patriotz
7 years ago

“So that’s the same system we have now (higher property tax for non-owner occupied properties).”

No, because I said the non-occupancy tax would not apply to bona fide rental properties.

addair
addair
7 years ago

@ #105

US treasyries yields are at a 13 month high: Reuters

Absinthe
Absinthe
7 years ago

, #98 ~ On first glance my sense is that the difference is that Garth is giving just detached numbers.

Anonymous
Anonymous
7 years ago

Bond yields went DOWN in the USA today.

At today’s rate of decline, we should be at record low rates in 10-11 days. 😉

addair
addair
7 years ago

OUTCH! All interest rate sensitive stocks got absolutely hammered today. All the steady div payers like pipelines and utilities were down bigtime. Bernanke has been going out of his way to send signals that QE is over. These are just shock absorbers to prevent the market from overreacting when we get hit with the inevitable first rate hike. All the crap we’ve been hearing that the mountain of cash that has been printed is just sloshing around in the coffers of big financial institutions without any effect on the economy or future inflation is exactly that, Crap. We’ve been lulled ito a false sense of security by politicians and wannabe economists who have drunk the cool-aid. I’m sure this will all get sugar coated to keep the logjamb intact a bit longer. But it’s hard to fool the stockmarket. It… Read more »

/dev/null
/dev/null
7 years ago

http://bc.ctvnews.ca/who-s-policing-dishonest-b-c-realtors-1.1300858

Forty-nine realtors have been “sanctioned” in *the last year alone* for forging or altering documents. Stern finger-wags for each one I’m sure. They all feel really just horrible about it and promise to never, ever, ever get caught doing it again. Pinky-swear.

bcj
bcj
7 years ago

Spotted on CL:

http://vancouver.en.craigslist.ca/rds/reo/3834994658.html

$865000 / 4br – 2721ft² – brandnew 4 br house with 1 br legal suite (ladner)

“this is limited time price offered if its not gone by june 15
new price will be 899.999.00 no realtors please ”

Bwahahahaha!!! Good luck with that strategy.