Property tax deferment and empty bedrooms

Peter Ladner over at the Vancouver Courier asks the question ‘why reward Vancouver seniors for staying in big empty houses‘?

The oldest of us will be 80 in 10 years, well past the time we needed all those bedrooms for our children, even the ones who stick around into their 30s. And we have lots of those bedrooms. Canadians have the most living space per person of any country in the world (2.5 rooms per person), according to Organization for Economic Co-operation and Development stats. I confess: I have two empty bedrooms in my home, even after converting the basement into a suite.

A decade ago, Urban Futures estimated that around 30 per cent of homes in Metro Vancouver had at least one unoccupied bedroom. That would be 220,000 empty bedrooms then, and many more in coming years as the boomer tsunami arrives. It would be interesting to calculate how many years we could go without building any new homes simply by filling up the ones we already have.

The opposing viewpoint says that asking people to pay their property tax is the same as kicking old people out of their homes, some calling Ladner ‘a disgusting human being’.  But as George points out is it really unfair to ask people who’ve benefitted from decades of rising property values to pay their share of the tax bill?

…Whenever young people cry about high housing prices in Vancouver, we’re told that’s the free market, suck it up, supply and demand, blah blah blah. It’s actually not a free market, it’s a highly distorted market, but that’s besides the point. If it’s good for the goose, it’s good for the gander. If young people in Vancouver are just supposed to accept being priced out due to the free market, then elderly people should have to accept the same thing. I am not saying I want to see elderly people displaced out of Vancouver. But Peter Ladner is right, it’s just not fair that elderly people sitting on massively overvalued homes get what amounts to a tax subsidy from the young, the very people priced out of the city.

What do you think? Are you against young families or the elderly?

 

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Westside Realtor
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Westside Realtor

The downside risk of this housing market is massive.

Reminds me of the NASDAQ at 5000 fifteen years ago.

Wouldn’t touch it.

Wonder how Oracle’s definitely buying a SFH this fall hunt is going…perhaps he’s secured it already and is enjoying windfall gains…

To those about to rock, we salute you.

My ears are still ringing…

WSR

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

sounds great. should give tax avoiding HAM more choice.

bullwhip29
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bullwhip29
realist
Member
realist

The argument is as old as old folks have lived in their old houses.

It’s also a longstanding realtors’ come-on line, most productive after Mrs. Elderly has had a setback, like a hospitalization or a big plumbing problem:

“Now Mrs. Elderly, whachya doin’ rattlin’ around in this big old dark drafty house of yers when ya could be in a nice new spanky-clean bright warm apartment/condo/townhouse and hey, have tons of money to boot? Why, you’d have money to spend yer winters in Hawaii! And plenty left over to help out your grand/kids, too! ”

bullwhip29
Guest
bullwhip29

as i mentioned earlier, it isn’t just seniors who qualify for property tax deferment.

realist
Member
realist
OK, humour(ous truth!) aside, shall we consider: 1. if the object is to end subsidizing the high-net-worth-low-income homeowner: tax deferral is indeed a subsidy. Its value is a function of the time and the price paid, which can be altered by the tax authority. Put the price high enough and the tax authority can be turning a profit on the money-lending business, rather like the reverse-mortgagers do. 2. if the object is to add more housing stock, I suggest you consider how efficacious the construction of thousands of condo units has been under Gregor R’s & Penny B’s tenure in housing Vancouver’s homeless or its young working families. Yes, Granny will be out of the house, which will then for years sit empty, or be intermittently occupied by the new owners or their retainers or tenants, until demolition, after which… Read more »
patriotz
Member

@6:

This is a provincial program so look beyond your West Side or CoV view.

The provincial government has an array of policies designed to keep people in underutilized dwellings. Besides the tax deferral, there is the senior’s HOG bonus, and there is the legacy property assessment (under market value).

Goals in total:
1. Keep properties off the market which results in both higher prices and higher rents.
2. Allow higher consumer spending through de facto consumer debt which doesn’t show up on the books.
3. Buy votes of Liberal target groups such as seniors and families.

space889
Guest
space889

If you can’t beat then join them.

The solution is pretty simple, just set the interest rate at the average of big 5 bank’s HELOC rate. If you want to defer then pay the market going borrowing rate.

elvince
Guest
elvince
I’ll go with spacedOut on this one. But maybe one step further: if you’re gonna charge market interest rate, why not let these people go rent their money from private entities? Let them borrow from a bank. I do see the political interest in just asking for market rate, so as not to cancel a very popular program, and since 99% of the population understands squat about interest rate, a skilled politician could spin the whole thing as a win-win, but the right thing to do is to just reduce your program costs to 0 by firing everyone involved, and reducing your future interest costs to minimal by not originating new loans. By jacking rates to market rate, you do reduce your interest costs, but you still have to manage these loans. Nobody is actualy kicking granny out of her… Read more »
paulb
Member
Active Member

Week to date:

New
675
Sold
546

Daily’s are still giving me very inconsistent results. I’ll just post the week to date totals each day…

http://www.paulboenisch.com

Westside Realtor
Guest
Westside Realtor

Thanks PaulB.

Wonder if one of the sales was to Oracle? He is on the hunt for a SFH with definite intent on buying this fall.

Wishing him much luck…

WSR

Ulsterman
Member

I really struggle to have sympathy here. You are old and live in a mortgage-free home. If you have so little in pensions that you cannot pay the taxes then borrow via a HELOC to cover the difference between what you can afford and the actual amount. How much can this really be? At a minimum the city’s interest rate should be the typical bank HELOC rate plus a small additional amount to cover the admin costs.

GreenSalad
Guest
GreenSalad

it’s just not fair that elderly people sitting on massively overvalued homes get what amounts to a tax subsidy from the young, the very people priced out of the city.

I guess those “elderly people” never subsidized the schools and universities over their decades in taxes….

Time for an early FFFA!!

Runawayscreaming
Guest
Runawayscreaming

Quote from article about fleeing Vancouver:

“When residents gain purchase on Vancouver’s urban culture simply because they are the only ones who can afford it, we should not be surprised to see that culture defined by consumerism, shallowness and alienation.”

Found here:

http://www.asianpacificpost.com/article/7138-im-living-vancouver-dream-moving-away.html

Best place on meth
Member
Best place on meth

No deferments, force the old bastards to pay their taxes on time and in full.

If they can’t pay then liquidate.

The house, not the old bastards.

Tiger
Guest
Tiger

check out Vancouver Vanishes on Facebook

https://www.facebook.com/VancouverVanishes

w
Guest
w
southseacompany
Member
southseacompany

From the US:
“Weekly mortgage applications surge 13.9% on rate dips”, CNBC

http://www.cnbc.com/2015/09/23/weekly-mortgage-applications-surge-139-on-rate-dips.html

“The high drama leading up to and following the Federal Reserve’s decision not to raise interest rates had mortgage borrowers and their lenders busy last week.”

southseacompany
Member
southseacompany

“Bill Gross urges U.S. Fed to hike interest rates: ‘Get off zero and get off quick’”, Financial Post

http://business.financialpost.com/investing/global-investor/bill-gross-urges-u-s-fed-to-hike-interest-rates-get-off-zero-and-get-off-quick

“Bond guru Bill Gross, who has long called for the Federal Reserve to raise interest rates, urged the U.S. central bank on Wednesday to “get off zero and get off quick” as zero-bound levels are harming the real economy and destroying insurance company balance sheets and pension funds.”

“Do they not know that if zero were to become the long-term norm, that any economic participant that couldn’t print its own money (like they can), would soon ‘run on empty’ ”

“The developed world is beginning to “run on empty” because investments discounted at near zero over the intermediate future cannot provide cash flow or necessary capital gains to pay for past promises in an aging society, Gross said.”

southseacompany
Member
southseacompany
“Central Banks Below Zero. Serious voices are floating the idea of punishing cash”, Wall Street Journal http://www.wsj.com/articles/central-banks-below-zero-1443048030 “The main monetary news last week was Janet Yellen’s decision not to start a modest liftoff in U.S. interest rates until, well, whenever. So it might have escaped broader notice that the Bank of England is inching toward the same conclusion, despite Britain’s recent success as the fastest-growing developed economy.” “Britain is getting caught in the same zero-interest-rate policy, or Zirp, trap that we’ve described in the U.S. Sustained low rates have kept many low-productivity businesses afloat instead of forcing them into bankruptcy; favored larger companies at the expense of smaller, more disruptive firms; and diverted investment into low-productivity areas such as property and construction. The longer this policy persists, the greater a drag it places on investment as businesses start to worry… Read more »
patriotz
Member

@12: “At a minimum the city’s interest rate should be the typical bank HELOC rate plus a small additional amount to cover the admin costs.”

Provincial government, not the city. The provincial government pays the taxes to the city (and school board) on behalf of the homeowner.

But replies such as this are missing the point. You are proposing rational solutions, but the goals of the program (as I’ve enumerated) aren’t rational in the first place.

vangrl
Member
vangrl

Update on Scammy immigration Consultant

“An unlicensed immigration consultant appeared in court in Vancouver, Canada last week in an immigration fraud case which the prosecution described as “beyond any of the precedents”. Over a thousand Chinese immigrants who were clients of the consultant are now facing the possibility of having their Canadian nationality or residency revoked.”

https://www.hongkongfp.com/2015/09/22/beyond-any-precedent-fraud-case-could-cost-chinese-immigrants-their-canadian-nationality/

These guys are cheats, why would we let them keep their citizenship if we didn’t have to?

Our news is awfully quiet on this, has anyone seen this on T.V or Globe and mail etc..? it’s being touted as the biggest immigration fraud to date.

Egg Hunt
Guest
Egg Hunt
> #22 Vangrl This practice is in place for years, mostly by mainlanders. I doubt if faking passport is that much common among Taiwanese, Hong Kong people. I know a couple immigration consultants (both licensed), one specializing for middle east wealth immigrant, other used to work at lawyer’s office. They started telling me about ten years ago, when they say your age (or whatever) is not qualified for xxx immigration application. Next day, same person bring in amended Chinese passport. Same for any educational certificate, reference letter, bank statement. This is not secret among immigrants community. I am also not impressed to know that this fraud consultant was never be licensed. There are many licensed consultants knowingly doing the same thing. Who are going to be in trouble if this is openly discussed? The government. Federal CIC, and regulatory body… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

looks like the stock market is going to test the august lows.

how is real estate doing? does anyone on here discuss prices and sales anymore?

Natcho
Guest
Natcho

@13 Green salad: “I guess those “elderly people” never subsidized the schools and universities over their decades in taxes….”

Here’s the thing about ‘subsidizing’ education – it results in a benefit for society as a whole. An educated populace is more likely to invent and improve, helping the general economy. Tell me what benefit to society comes from keeping old people in big empty houses?

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