How do you tax an empty home?

The city of Vancouver has floated the idea of an ’empty home tax’ to help encourage the availability of rental supply.  Today is the last day they will take feedback online for this idea.

If you have ideas for or against an empty home tax now is the time to have your input. What should be taxed and what should be exempt?

Best Place on Meth points out a rather obvious loophole and asks how it would be dealt with. Will there be baseline expectations for what is or isn’t market rent?

What’s to stop these owners from listing it for rent at some outrageous price that nobody will pay and then claiming they did try to rent it out?

What do you think – is the idea of an empty home tax a good or bad approach to Vancouvers housing problems?

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Hyper-mega-Bull
Hyper-mega-Bull
3 years ago

This blog is made up of people who want to own but can’t. The most negative and pessimistic real estate watchers, all of you, are desperate to get into the market. Think about it.

If even the basket of real estate deplorables (you people) are desperate to get into the market how the hell are prices going to crash?

Want a crash? Then stop coveting your neigh ours house!

Truth
Truth
3 years ago

So rite on the money.

Patiently Waiting
Patiently Waiting
3 years ago

I had no idea this blog was so influential.

Boombust
Boombust
3 years ago

What about his wife, then?

Best place on meth
Best place on meth
3 years ago
Reply to  Boombust

Oh yeah, she’s totally covetable.

YVR
YVR
3 years ago

“Then stop coveting your neigh ours house!”

If we are neighbours then we have similar places. Who is coveting who? I don’t think it would be the one paying a fraction of the other for a similar place. I recently got a new neighbour. He paid $1.3M in Spring for the condo plus $800 per month in fees and taxes for the same place I pay $2200 per month all in. On top of that a similar place is listed for $1.2M now so you can add $100K plus in his costs over 6 months with more losses to come. Don’t be so jealous of your neighbour Hyper Bull.

Simple Solution
Simple Solution
3 years ago
Reply to  YVR

But isn’t real estate just going to increase in value 20% annually forever?

Doomcouver
Doomcouver
3 years ago
Reply to  YVR

Yeah I’m a big fan of housing prices making sense in terms of price to rent and price to income ratios. I’m not even sure if I’d want to own, but it would be nice to have as an option. I’m really sick of rich speculators treating housing like a casino, it needs to stop. Claiming everyone has sour grapes because they can’t own is not an accurate stereotype. Some people just want the madness to stop.

High real estate prices are only good in the short term for realtors, bankers, developers, and speculators. Every other part of the economy would be better off with housing that is within reach of local incomes.

Newcomer
Newcomer
3 years ago

All this week people have been telling me how they cannot get employees to fill the jobs they have. They tell me people ordinary working people are leaving Vancouver.

Hyper-mega-Bull
Hyper-mega-Bull
3 years ago
Reply to  Newcomer

They can’t find people because the local economy is booming. Film, high tech are both benefiting from low dollar outsourcing. Construction is booming. New Canadians , international students, 10 year visa holders are all out spending money at the malls and restaurants as they set up their homes and splurge.

paulb
paulb
3 years ago

New
122
Price Change
50
Sold
91
TI:9,996

http://www.paulboenisch.com

Ktown
Ktown
3 years ago
Reply to  paulb

I think the last 2 days we were seeing a the paperwork finished for the pre mortgage change sales. Here on out those deals should be completed with subjects removed etc and not reflect on future sales.
91 sold is rediculously low, but 122 new list are also low.
This spring should be good. All the “wait and see” sellers will start to list and the buyers just wont be there. Whether it be that the see the market is falling or they are simply priced out with the new lending rules. This time next year we should have hit rock bottom.

Newcomer
Newcomer
3 years ago
Reply to  Ktown

91 sold is not low for this time of year

Bbbbb
Bbbbb
3 years ago
Reply to  Ktown

LMAO at your theory

Oh NO
Oh NO
3 years ago
Reply to  paulb

Lululemon is about to pull HQ outa Vancouver…. theres a few hundred new listing right there

Bbbbb
Bbbbb
3 years ago
Reply to  paulb

9K party!

Ktown
Ktown
3 years ago
Reply to  Bbbbb

LOL is this Oracles wife?

Hyper-mega-Bull
Hyper-mega-Bull
3 years ago

Riding along with the CN Police
The Richmond News takes a back seat as ‘railway cops’ snare inattentive drivers at notorious crossing

“The train is usually travelling at around five kilometres per hour and sounding its horn, it’s almost impossible not to see it; but they still run right into the side of it. It’s incredible.”

http://www.richmond-news.com/news/riding-along-with-the-cn-police-1.2358085

Confucius
Confucius
3 years ago

Very fitting for this blog. Most people can’t see a train wreck about to happen.

HAMster
HAMster
3 years ago

So you stop at the stop sign and get rear-ended by the car behind you who never stops at the stop sign.

Patiently Waiting
Patiently Waiting
3 years ago

A few months ago, I had a messed up situation where I had the right-of-way to cross the railway tracks, and a flagger (road construction) raised their Stop Sign as I was driving over the tracks. I had the choice of obeying the flagger and parking my ass on the tracks or disobeying the flagger and risk a ticket. I decided on a third option, to just drive very slowly until the flagger let me through.

HAMster
HAMster
3 years ago

I think traffic flaggers like to cause confusion on purpose.

Confucius
Confucius
3 years ago
Reply to  HAMster

I suppose if my job was to lift a sign up and down I would do the same.

Hyper-mega-Bull
Hyper-mega-Bull
3 years ago

empty home tax isn’t going to be enforced. it’s strictly PR.

Newcomer
Newcomer
3 years ago

Have you ever considered putting the words “I think” in front of your opinions?

Confucius
Confucius
3 years ago
Reply to  Newcomer

He doesn’t think.

Bbbbb
Bbbbb
3 years ago
Reply to  Newcomer

The empty home tax is impossible to enforce. Is that so hard to understand?

patriotz
3 years ago
Reply to  Newcomer

This is the guy who said Trump was going to win, so “I think” is probably not an appropriate leadin.

Best place on meth
Best place on meth
3 years ago
Reply to  patriotz

You’re calling the election for Shrillary?

You’ve been watching too much CNN.

Hyper-mega-Bull
Hyper-mega-Bull
3 years ago

Netflix joins ranks of U.S. tech companies admitting they can’t conquer China

http://www.marketwatch.com/story/netflix-is-the-latest-us-tech-company-to-fail-to-conquer-china-2016-10-19

abcdef
abcdef
3 years ago

It looks like CMHC are going to solve Vancouver’s housing crisis in 8 easy steps. Step 1 is completed, seven more to go: Step 1: Close all the Seymour mountain bike trails as land is owed by CMHC (http://www.cbc.ca/news/canada/british-columbia/mount-seymour-area-abruptly-closed-to-mountain-bikers-1.3812935) Step 2: Pave over Seymour forest with condos built on the their land Step 3: Use the proceeds for payment of backhanders and generous defined benefit pensions and salaries. With the 10 percent remaining proceeds, use it for insuring purchase of said condos with 0 percent down to anyone who can fog a mirror. Step 4: Economy tanks as Chinese focus on London real estate where money laundering is welcomed and local currency has tanked (just like Vancouver prior to August). Step 5: Taxpayer bailout of CMHC with associated BOC QE to stimulate the economy. Step 6: Massive increase in immigration… Read more »

abcdef
abcdef
3 years ago

test

Best place on meth
Best place on meth
3 years ago

2504 28TH AVE E

Listed Sept 26 for 1,225,000

Sold for 1,050,000

Best place on meth
Best place on meth
3 years ago

2590 ADANAC ST on extra large 49×108 lot:

Listed Aug 15 for 1,649,000
Reduced to 1,549,000
Sold Sept 23 (39 DOM) for 1,425,000 (but sale was only recorded yesterday)

If they had listed in June for 1.649 some idiot would have bid it up to 1.8 easily, 400K more than they got in October.

Oh oh
Oh oh
3 years ago

Very true re adanac

Best place on meth
Best place on meth
3 years ago

5145 INVERNESS ST

Listed Sept 20 for $1.190,000

Reduced to $1.025,000

And I still haven’t seen anything in East Van going for the REBGV’s fake benchmark price of $1.537,000.

If they still publish that garbage in next months stats they are flat out lying.

UBC in Crisis Mode
3 years ago

They will make money, the question is how much?

Sale Date May 12, 2009
Sale Price $660,000

Kim
Kim
3 years ago

That was a tear down that was sold in 2009.

Kim
Kim
3 years ago

6411 Butler St
Listed for 2.798m in the summer, reduced to 2.398m, now 2.138m just re-listed. Still a long way to drop.

Kim
Kim
3 years ago
Reply to  Kim

These folks just seem to be riding the wave down. If they don’t price competitively, this thing won’t be selling anytime soon.

Newcomer
Newcomer
3 years ago
Reply to  Kim

I have a friend who listed for a month and just dropped the price by 6%. I really doubt that will work.

Combat roach
Combat roach
3 years ago
Reply to  Kim

How this Vancouver shit degenerated so badly over years. Even to come in line with now overpriced Seattle current prices have to drop at least 70%.

http://www.zillow.com/homes/for_sale/Seattle-WA/pmf,pf_pt/48953526_zpid/16037_rid/47.673277,-122.310405,47.627831,-122.402673_rect/13_zm/

patriotz
3 years ago
Reply to  Combat roach

Zillow estimates $3800/month rental value versus $2800/month mortgage, 30 year fixed. I’m not sure I’d call that overpriced. Price/rent a little over 200.

Ulsterman
3 years ago
Reply to  patriotz

Zillow also estimates it is worth “Zestimate®: $1,006,702”
But it’s “FOR SALE at $798,800”
after a “Price cut: -$50,200 (9/10)”

Wonder how Zillow gets its estimates so wrong?

patriotz
3 years ago
Reply to  Ulsterman

Well you get what you pay for. BC Assessment spends about $4/property to get one number a year. The property tax assessment is $788,000.

Property taxes are $6,364. That’s a much higher rate than Vancouver of course, but a similar house in Vcr would be assessed at least $2mil and would pay about the same taxes at a rate of 0.32%.

BUY NOW OR GET LAID NEVER
BUY NOW OR GET LAID NEVER
3 years ago

2348 Oliver Crescent
Jun 11, 2016 – $ 3,680,000
Oct 20,2016 – $ 2,988,000

UBC in Crisis Mode
3 years ago

A new listing (realtor changed?) for the lot value, too high.

Buy Now or Get Laid Never
Buy Now or Get Laid Never
3 years ago

Same realtor price changed

Newcomer
Newcomer
3 years ago

I love the description on the, now 3M, house, “with a very livable home plus a developed basement to help reduce those mortgage payments.” Livable’s good enough when you are getting something that cheap. And I’m sure a basement suite is going to make a massive dint in a 2.4M mortgage. It just about pays for itself!

Shut It Down Already
Shut It Down Already
3 years ago
Reply to  Newcomer

Why’s assume only 20% down? Most locals at the top-end are move-up buyers.

patriotz
3 years ago

Sure but that property is not much of a move-up for anyone, except for price.

I think this property is caught in a sour spot – it’s not an outright tear down, but the structure is not worth enough that someone would be willing to pay more than lot value.

Bear Vancouverite
Bear Vancouverite
3 years ago
Reply to  patriotz

There’s no way this property’s lot value is $2.9M and I hope nobody falls for this.

Cambie corridor Phase 1 units on 7500sq ft lots are/were being sold for $3-3.4M earlier this year. Just as recent as 3 months ago, Phase 2 units (with lower planned FSR) are receiving offers of around $3.0-3.5M. I’m not sure I see a lot near Kingsway being worth as much as those within walking distance of the Cambie Corridor.

No Money Down
No Money Down
3 years ago

2348 Oliver Crescent is in Arbutus

Newcomer
Newcomer
3 years ago

Move up to taking in lodgers in a “livable” house? I guess, why not. A little sad, but anything is possible in Vancouver.

No Money Down
No Money Down
3 years ago

That property was originally listed as $3,888,000 in June.

Featured on Garth’s blog:
http://www.greaterfool.ca/2016/06/11/hitting-the-fan/

“What a piece of crap,” says Leslie, who lives nearby. “This has to be the end…”

The bungalow was built in 1951, is unrenovated, sits on a 50-foot lot, has two bedrooms and 2,118 square feet, including the basement. “A fully developed basement to help reduce those mortgage payments,” says realtor David Richardson. Which is a good thing. Because at $3,888,000 most people would probably want a big $1,500 coming in from downstairs to help offset the $15,000 monthly payments.

Kim
Kim
3 years ago
Reply to  No Money Down

No, RE “investors” who can’t do math will jump at the opportunity to buy this thing.

Combat roach
Combat roach
3 years ago

Still those 8s? Perhaps they are a useful marker on a merchandise signaling overpriced, usually shitty goods for a dumb buyer. If I were about to buy a “home” I wouldn’t even look into anything with 8s, to begin with.

Donald T
Donald T
3 years ago

re-zone deal?

Simple Solution
Simple Solution
3 years ago
Reply to  Donald T

No rezone on oliver crescent

Patiently Waiting
Patiently Waiting
3 years ago

http://www.cbc.ca/news/business/cra-audits-real-estate-1.3813584

“The agency says it doubled its efforts in B.C. in 2015, and started a review of 500 “high dollar-value” real estate transactions in B.C. that year to find any unidentified tax issues.”

We might not hear about all the money recovered by this initiative.
If I had flipped a property in the last few years and didn’t report it to the CRA, I would fess up now.
Do we ever hear about taxes (and penalties) paid by those who get spooked into coming forward? I doubt it.
Happy Halloween mwahahaha

patriotz
3 years ago

People request reassessments based on omitted information all the time. Granted flipping houses accounts for a lot more money than most other sources, but I don’t think they break out numbers for voluntary reassessments.

The article you linked does give numbers for extra taxes assessed by audit. But CRA can’t identify anyone unless the case goes to court and becomes public.

http://www.cra-arc.gc.ca/nwsrm/cnvctns/menu-eng.html

Hyper-mega-Bull
Hyper-mega-Bull
3 years ago

Manchurian candidate activated

Philippines’ Duterte, in China, announces ‘separation’ from US

https://www.yahoo.com/news/duterte-meets-xi-philippines-cozies-beijing-044808788.html

Combat roach
Combat roach
3 years ago

Excellent, subsequently China will open floodgates for Philippine’s immigration so Canada and US will get some relief.

franko
franko
3 years ago

McCallum’s recent acknowledgement that the dramatic immigration increase called for by a (high powered group of external advisers) might too ambitious, and that “it is not a universal view across the country”, is a giant departure from his previous claim that tripling immigration was met with “overwhelming support by Canadians”…which was total bullshit.

He is either on the wagon, or no longer able to ignore the uproar from Vancouver.
He is still bent on increasing immigration significantly, and we can’t afford to let him off the hook. Keep the pressure up! johnmccallum@parl.gc.ca

Whistler or Bust?
Whistler or Bust?
3 years ago

The B.C. NDP says that if elected, it will make permanent a temporary tax on B.C.’s top earners to help fund $10-a-day childcare.
http://www.vancouversun.com/health/vows+raise+taxes+rich+childcare+elected/12298736/story.html

And just like that on cue, the NDP shoots itself in the face. Another 2% tax increase on the “rich” after Sunny boy just added 4%. They will not win this election now.

It is not my job to raise other people’s kids. I just lot all my federal “baby bonus” cheques from Sunny boy which costs my family $2600 a year.

Who’s rich? The high income earner who pays his taxes at 50% or Jui Hung who owns 10 homes and pays $0.

The NDP should stick to the Real Estate market to get more tax revenue. Not from the wallets of the already overtaxed Canadian.

patriotz
3 years ago

Wow, the hate-a-thon is already under way 6 months before the election. So those poor widdle people making >$150K a year (individually) will have to keep paying the tax increase that Christy brought in? Wahh! They must be crying in their drinks at Whistler eh?

And FYI the NDP is promising to get more tax revenue from the RE market. It been discussed before but here’s a link:

The focus should be: Are you paying your worldwide taxes in British Columbia or not?” said Eby. “And if you are not, then you should have to pay extra in order to pay for the public services that make this real estate so valuable.”

http://commons.bcit.ca/broadcastnews/2016/09/27/mla-wants-government-to-look-into-owners-of-very-expensive-houses-in-upscale-neighborhoods-declaring-poverty-line-incomes/

Its_the_ALR_stupid
Its_the_ALR_stupid
3 years ago
Reply to  patriotz

Combining this tax increase with the recent federal one would bring the top BC rate to just about 50%. My questions is, at what point do these rates start driving away entrepreneurs, doctors, etc? New Brunswick just dropped their top rate because they sensibly recognized that it was hampering their economy while bringing in relatively little revenue.

We should be taxing unearned income (house flippers, etc), not earned income.

This is exactly the kind of thing that causes someone like me, who might otherwise consider voting NDP, to decide not to. And no, I’m not even subject the top rate.

Whistler or Bust?
Whistler or Bust?
3 years ago

I guess they are counting on people like Patriotz who have no grasp of the economics of taxation to vote for them.

patriotz
3 years ago

BC’s top marginal rate (including the new taxes at both federal and provincial level) is 47.7% for $200K+ and 43.7% for $150K+. Both are the second lowest for any province (Alberta is the lowest).

NB is 53.3% and 49.3% respectively.

The BC Liberals implemented the increase in 2013. Now have you heard any employers complain that is increase is making it hard for them to recruit employees? Have they been complaining about anything else?

“We should be taxing unearned income (house flippers, etc), not earned income.”

So you would rather keep a government that is committed not to do this?

Its_the_ALR_stupid
Its_the_ALR_stupid
3 years ago
Reply to  patriotz

“So you would rather keep a government that is committed not to do this?”

Of course not. I think both major parties are basically incompetent, but for different reasons.

And yes, I have in fact heard of several employers in the local tech space in particular who have had a hell of a time finding high end talent, and cost of living (which includes taxes) is the single biggest factor. Also remember we are not just competing with other provinces – we are competing with places like Seattle which has a top marginal rate of 40%.

patriotz
3 years ago

The BC Liberals aren’t incompetent at all, they are doing a very good job of looking after their supporters. As for the NDP, not one MLA is left from the 1990’s (last was Kwan who is now an MP), so I would hold judgment until they are back in office.

Also “cost of living (which includes taxes) ” is a wee bit deceiving given BC is one of lowest taxed provinces in Canada. Fully agree about competing with Seattle, but if you think the problem is all about a few % points of provincial income tax, you are way way off the mar.

Royce McCutcheon
Royce McCutcheon
3 years ago

@Its_the_ALR_stupid: you’re not wrong that high taxes can drive away entrepreneurs, doctors, etc. But the impact of the increases you’re describing is absolutely trivial compared to the impact of the high cost of living on driving away those people (or making it impossible to attract them in the first place). Yeah, being out of pocket a few extra thou can suck. Being unable to come close to buying the kind of place you can get elsewhere – while quite possibly earning a more money – is a far bigger hit.

Without hesitation, I will happily pay more taxes if it means the market here will tank.

Whistler or Bust?
Whistler or Bust?
3 years ago
Reply to  patriotz

Interestingly enough, I have been so disgusted by the Liberals inaction on Real Estate and so impressed with Eby that I was considering voting for the NDP for the first time ever.

Not now. I pay enough taxes as it is. The NDP needs to learn how to get by with what they have and not view high income earners as cows to be milked. Study after study shows that when taxes approach 50% the amount collect decrease with each additional % increase as people lose the will to work.

Royce McCutcheon
Royce McCutcheon
3 years ago

Respectfully, what do you think the ever-increasing high cost of living and diminished prospects for secure employment or advancement are doing to younger people already?

I know plenty of younger people who are just opting out because traditional approaches to work and living are offering diminishing returns. All I’m saying is that any possible tax increases need to be put in the context of the far larger headwinds we presently have bucking the boat we’re in.

Combat roach
Combat roach
3 years ago

Not that you necessarily should be supporting the other’s kids but some action toward that matter is required otherwise Canada will be bringing more Jui Hungs and other useless locust crap to meet the social engineering requirements.

Combat roach
Combat roach
3 years ago
Reply to  Combat roach

And to be clear I am 100% with you and rest here that we should be taxing unearned income not earned income. My point is beyond that. Tax flippers and speculators to the bone and go after foreign money.

Donald T
Donald T
3 years ago

1. You can wipe your own ass when you are 85. And “It is not my job to raise other people’s kids” this pair is called cause-and-effect.

2. “Jui Hing who owns 10 homes and pays $0”, and families with kids are not mutually inclusive. You subconsciously making this connection is the root of your anger. Please make a appointment with Yoda.

2.1 You are not rich nor a high income earner. Try to refer yourself as human, not income earner.

3. You are an a hole is non-debatable.

Newcomer
Newcomer
3 years ago

There are so few individuals earning over 150K in BC that it doesn’t matter how you vote. Sucks to be a minority, I guess.

YVR
YVR
3 years ago

The thing is the tax increase they propose wouldn’t nearly pay for the child care they propose. Just another reson to not vote NDP. These guys will never get it. The Federal NDP just got slaughterd with a similar proposal.

patriotz
3 years ago
Reply to  YVR

In fact in the last Federal election the NDP promised not to increase personal income taxes for anyone and to run a balanced budget under all circumstances, while the LIberals promised to increase them for the $200K+ and run a deficit. The Liberals won the election because they outflanked the NDP on the left, something which every analyst has recognized, but I guess you haven’t.

YVR
YVR
3 years ago
Reply to  YVR

Maybe you missed my point. The NDP makes promises that they can’t possibly pay for.

NDP promised not to increase personal income taxes for anyone and to run a balanced budget under all circumstances

Plus they promised the government child care. Please explain how all this is possible? Only a fool could not see this does not add up. That is why they got slaughtered. With Horgan at the helm in BC it will be no different.

patriotz
3 years ago
Reply to  YVR

What the NDP actually promised re child care was to negotiate a cost sharing deal with the provinces, who would actually run it, to be implemented within 8 years. Which was really a non-promise.

But I don’t agree that was the main issue. The Liberals promised action that was not conditional on a balancing the budget, or holding the line on taxes for the most affluent. That was the real left platform and that’s why they won.

Back to BC, the BC Liberals’ promise to fund government through LNG was a complete failure. What’s been keeping them going is PTT revenue. Their fiscal structure is based on keeping RE prices high forever. Do you find that credible?

Bear Vancouverite
Bear Vancouverite
3 years ago

If you are not even in the tax bracket being targeted, and you believe that the NDP might be more effective in controlling runaway housing prices, it is insane to vote against them in order to save “a couple of thousand” dollars of tax for SOMEONE ELSE when a housing price correction can save you hundreds of thousands of dollars. Talk about not seeing the forest for the trees…

Ulsterman
3 years ago

well said. These comments are blindingly short sighted

YLTNboomerang
3 years ago

Meh, we’re probably moving to TX.

realist
realist
3 years ago
Reply to  YLTNboomerang

YLTNboomerang, I’m sorry to hear that, as I have enjoyed your commentary on this blog. If so, I hope the moves goes well in all regards.

Billybonger
Billybonger
3 years ago

Ray

Please send Oracle a list of available homes. He and his cousins can buy them up, until listings fall to 7,000.

If he plugs a west van address into his gps, he should be able to navigate out from Surrey to sign the closing docs .

Donald T
Donald T
3 years ago
Reply to  Billybonger

HEY, Asperger! You are not taking your med again!

Ray
Ray
3 years ago

West Vancouver Detached Sales
Oct. 1, 2015 to Oct. 19, 2015 = 76
Oct. 1, 2016 to Oct. 19, 2016 = 7 (-91%)
Life was so much simpler when the bank just gave you more money than you could ever repay.

history
history
3 years ago

with the tax on vacant houses and new mortgage rules, anyone like to attempt an updated Top Ten list of Loopholes for the aspiring new Vancouver h8me buyer or Landl8rd? Special consideration goes out to the opinion of immigrant or refugee. Would like to hear from the Asian, African, East Indian, and earstwhile transitioning lawyer, who would be an expert on these matters ,especially in regards to UN approved welfare credit backdoor broker remittances. thank you for your loophole contribution. Canada’s idiot class of social capital builders thank you for your profound abuse.

No Money Down
No Money Down
3 years ago

I’ve been thinking about 632 E20th and the effect of the foreign buyers’ tax and the mortgage changes. Sold in 15 days in July 2016 for $1.2M. Currently listed for $1.2M. Minimum $60k loss to date if goes for list price. I think it is fair to say that Detached prices in Vancouver have dropped about 20% snce the peak. Value before Mondays’ mortgage changes is say $960k. Assume the following for sale price of $960k: The buyers have $100k saved. $80k for DP $20k for property transfer tax and closing costs Mortgage $910k (includes $30k for CMHC premium) Interest rate (5-year fixed) 2.25% Total income required: $138k The same buyers as above after Black Monday, October 17: Qualifying rate: 4.64% posted 5-year rate. Income: $138k Maxiumum total mortgage (including CMHC): $645k CMHC: $15k Maxiumum purchase price: $710k ($645k-$15k+$80k) I… Read more »

Appraiser
Appraiser
3 years ago
Reply to  No Money Down

Incorrect.

New rules reduce maximum mortgage amount by about 18%. If mortgage 80% of your max, then new rules have no effect.

YVR
YVR
3 years ago
Reply to  Appraiser

If you want to call someone incorrect at least get your facts straight. New mortgage rules impact even 20% down. No more amortizations over 25 years for mortgages to qualify for CHHC bulk insurance plus you must meet a minimum credit score for the bulk insurance mortgages. That impact most conventional mortgages where they either pay a higher rate or shorter amortization.

No Money Down
No Money Down
3 years ago
Reply to  Appraiser

It assumes the buyers have $100k DP. and costs . Definitely affected.

Reasonfirst
Reasonfirst
3 years ago
Reply to  Appraiser

http://www.fin.gc.ca/n16/data/16-117_2-eng.asp

“Effective November 30, 2016, mortgage loans that lenders insure using portfolio insurance and other discretionary low loan-to-value ratio mortgage insurance must meet the eligibility criteria that previously only applied to high-ratio insured mortgages.”

Read it and weep Appraiser.

No Money Down
No Money Down
3 years ago
Reply to  No Money Down

Here are the calculators I used. I was interested in the effect of changes on the marginal buyer.

TD Mortgage Affordability Calculator gives the maximum qualifying mortgage (including CMHC premium).
https://tools.td.com/mortgage-affordability-calculator/

The CHMC premium calculator is here:
https://www.cmhc-schl.gc.ca/en/co/buho/buho_023.cfm

The CMHC premium for a marginal buyer of a $960k property is around $32k-not chump change. This has to be subtracted from the maximum mortgage.

The maximum house price is calculated as the maximum qualifying mortgage plus the down payment minus CMHC premium .

Also $20k closing costs, and taxes + ins + heat to be factored in.

Enjoy!

paulb
paulb
3 years ago

New
184
Price Change
61
Sold
145

TI:10,028

http://www.paulboenisch.com

Bag it and tag it
Bag it and tag it
3 years ago
Reply to  paulb

Bizarre we’re seeing an uptick in sales post-rules change. My best theory is that sellers are starting to capitulate and are lowering prices to whatever it takes to make a sale.
I look at Chipman’s daily avg price and yesterday it was $850K for REBGV, wish avg sale $30K below list. Both of those numbers relatively bearish based on numbers since the foreign tax and very bearish relatively to pre-tax numbers, so I don’t see any indication this recent uptick is bullish in terms of sales prices, though yes, single data point. Likely Realtors doing a better job of convincing clients lower prices.

Confucius
Confucius
3 years ago

Sales lag by about two weeks, so these sales are from before the change.

Bag it and tag it
Bag it and tag it
3 years ago
Reply to  Confucius

True, it’s when subjects are lifted, but would subjects not have to be lifted on a sale prior to Oct 17th in order to be exempt of the rule changes?

Confucius
Confucius
3 years ago

Since the rule is for mortgages, I think the date was a cut off for mortgage approvals. If that’s the case, subjects can be lifted later, although financing is one of the most common subjects.

Bag it and tag it
Bag it and tag it
3 years ago
Reply to  Confucius

I think good chance you are right. Accepted offer could have happened over the weekend with subject removal deadline sometime this week…they then get final approval from bank on Monday, then take a day or 2 to think about it before completing the sale. Buyers would not have had this kind of flexibility during the multiple bid frenzies common prior to the tax.

Shut It Down Already
Shut It Down Already
3 years ago
Reply to  Confucius

Many are putting in subject free offers these days.

Oh NO
Oh NO
3 years ago

Majority of detached houses selling for 10% under ask, often after a couple price drops

Oracle
Oracle
3 years ago

Ok guys, I’m out of here. Most didn’t appreciate my “Devil’s Advocate” views here. the few smart ones here knew where i was coming from. 😉

Boombust
Boombust
3 years ago
Reply to  Oracle

‘bye now!

D Trump
D Trump
3 years ago
Reply to  Oracle

Don’t come back

Spec
3 years ago
Reply to  Oracle

Last time it was three days. Taking bets n how long this year departure lasts. (Sock puppets don’t count). Over undert three days LOL

YVR
YVR
3 years ago
Reply to  Oracle

Any chance Space will join you?

Slava
Slava
3 years ago
Reply to  Oracle

Yes, With all due respect,and unlike last time when you threatened to leave, please do as you say and leave. Doing otherwise means your honour, word and little credibility vanish.

Yellow Beaver
Yellow Beaver
3 years ago
Reply to  Oracle

And not a single fuck was given.

history
history
3 years ago

New Age taxation in Canada is coming, like the Metric system 1970. It affects everyone, and is tied to carbon assets.