The Decline of Vancouver.

Posted by: Bull_Dozer

Posted by: XXX_er

yes ^^^ lots of people live paycheck to paycheck

The same people who own a detached house in Vancouver...?

Of course.

If anything, people are more willing to stretch their payments and monthly cashflow to the limit for the sake of a mortgage on a standalone property.

If you're renting, why max yourself out?

I know plenty of renters with healthy monthly cashflows that are putting away extra for a downpayment, but the downpayment is a killer. So the result is that overall cashflow-wise though they are better off than many homeowners. Conversely, I know plenty of people where every spare nickel they have goes to the house.  

Bulldozer seems to have some... interesting views on the connection between monthly cashflow and net worth/asset equity. Here's a hint: They don't always correlate.

In the property tax example, I'll admit maybe the example of $500 is typically no big deal, but the idea that because someone owns a house they automatically have all of this expendable monthly cashflow is kinda bizarre. And the idea that having your home equity increase by 100k somehow automatically increases your monthly cashflow is equally bizarre. Your mortage didn't magically come down by 100k. Unless you're talking about people who own their properties outright, which is a totally different subset.

In Vangroovy you could be in for  a huge tax bill even on a small house  in Dunbar or point grey cuz of the market value some seniors can't pay it so they  can defer taxes but I think you need to be 55+

if you own your property all that means is no mortgage or rent which is nice

Posted by: XXX_er

In Vangroovy you could be in for a huge tax bill even on a small house in Dunbar or point grey cuz of the market value some seniors can't pay it so they can defer taxes but I think you need to be 55+

if you own your property all that means is no mortgage or rent which is nice

Once I hit 55, I'm deferring all property tax bills based on your sage legal advice. They can pay for my share of this poop disposal lawsuit once I'm buried in the ground. LOL

One could also make a case for the home owner who's griping over his 500$ extra bill, that the fine stewards of local government are getting a little lavish in some of their projects. Does the new recreation center need to look like it was designed for Star Fleet command? And this is apparently the "pared back" version.... jebus.

https://www.nsnews.com/local-news/city-of-north-vancouver-to-receive-report-on-next-steps-for-new-harry-jerome-rec-centre-4525608

Posted by: XXX_er

In Vangroovy you could be in for  a huge tax bill even on a small house  in Dunbar or point grey cuz of the market value some seniors can't pay it so they  can defer taxes but I think you need to be 55+

Yah mayor Gordo the lush in cahoots w/his RE buddies did this to the seniors in Kerrisdale. Fucker.

Posted by: Couch_Surfer

Now, if you’re wanting property tax to act as a form of wealth tax, I’d suggest that’s a different topic and we’d have to look at total net worth (ALL assets and liabilities) and go at it holistically and in progressive structure. That’s still gonna screw over the fixed income pensioner living in a 3M$ tear down in Kits that she bought in 1965, but she can defer that tax payment, so probably all good.

I do think that the current form(s) of taxation lead to some unfair scenarios. Is a wealth tax the answer? Possibly, although that's a complicated issue. I definitely agree that if you were to implement a wealth tax then that would have to consider all assets/liabilities and not just real estate. I don't like how the current tax system focuses so much on "income" despite the fact that most people are getting rich in ways that don't get included in "income". For example, over the course of the pandemic both real estate and financial assets (stocks, bitcoin, etc.) have increased in value by a huge amount, but you can hold both of those and not pay any tax (assuming you don't sell the stocks). So lots of people have gotten much richer without having to pay any additional tax.

Regarding the fixed income pensioner example - Yes it's annoying to have expenses when you don't have a lot of cash coming in, but I don't have too much sympathy for people who are asset rich but cash poor. They at least have options. There are tons of people with no assets and no cashflow.

EDIT - Property tax specifically is a pretty small portion of the overall tax that people pay (in most cases). I just think in a place like Vancouver where you have lots of people making tons of $$ off their home with very little taxable income (i.e. from employment, etc.)... perhaps the tax system needs to be rejigged in a way that ensures people "pay their fair share" rather than having people in $5M houses receiving GST cheques (do those still exist?) and other low income benefits and then you have people on the other side of the spectrum renting a small apartment paying way more tax on their salary despite being much poorer than the homeowner.

Posted by: Bull_Dozer

The same people who own a detached house in Vancouver...?

I'd say most of the non speculators don't have a lot of spare cash left over after their mortgage payments and other living expenses. That's what it takes to get into the market. Work your ass off and save your money.  The banks don't care if you live pay check to paycheck, I presume its better for them. 

And I think you may be confusing "not very financially sophisticated" with "not comfortable leveraging the fuck out of my already ridiculous mortgage" Unless your sophistication can tell me how to withdraw cash from my home equity without it qualifying as debt.

Posted by: Couch_Surfer

Posted by: XXX_er

In Vangroovy you could be in for a huge tax bill even on a small house in Dunbar or point grey cuz of the market value some seniors can't pay it so they can defer taxes but I think you need to be 55+

if you own your property all that means is no mortgage or rent which is nice

Once I hit 55, I'm deferring all property tax bills based on your sage legal advice. They can pay for my share of this poop disposal lawsuit once I'm buried in the ground. LOL

I am not a tax lawyer but its just one possibility I have heard of in city of Van and possibly elsewhere ? There is a samll charge I and  believe it amounts to a low interest loan so if you sell the house you gotta pay off the tax bill first

Posted by: MaxRockatansky

Posted by: Bull_Dozer

The same people who own a detached house in Vancouver...?

I'd say most of the non speculators don't have a lot of spare cash left over after their mortgage payments and other living expenses. That's what it takes to get into the market. Work your ass off and save your money.  The banks don't care if you live pay check to paycheck, I presume its better for them. 

And I think you may be confusing "not very financially sophisticated" with "not comfortable leveraging the fuck out of my already ridiculous mortgage" Unless your sophistication can tell me how to withdraw cash from my home equity without it qualifying as debt.

Exactly.

Posted by: XXX_er

Posted by: Couch_Surfer

Posted by: XXX_er

In Vangroovy you could be in for a huge tax bill even on a small house in Dunbar or point grey cuz of the market value some seniors can't pay it so they can defer taxes but I think you need to be 55+

if you own your property all that means is no mortgage or rent which is nice

Once I hit 55, I'm deferring all property tax bills based on your sage legal advice. They can pay for my share of this poop disposal lawsuit once I'm buried in the ground. LOL

I am not a tax lawyer but its just one possibility I have heard of in city of Van and possibly elsewhere ? There is a samll charge I and  believe it amounts to a low interest loan so if you sell the house you gotta pay off the tax bill first

I’ve heard of it as well, no idea what the details are.   I’m just being flippant on the ‘sage advice’ crack 👍👍👍

you can goggle it on the city of Vangroovy website for the details,  which how i got what i know,

I know a couple of out door skier types who have done it facing a 30K tax bill in point grey & dunbar on houses that would be  a tear down if they sold them

Posted by: MaxRockatansky

And I think you may be confusing "not very financially sophisticated" with "not comfortable leveraging the fuck out of my already ridiculous mortgage" Unless your sophistication can tell me how to withdraw cash from my home equity without it qualifying as debt.

https://www.investopedia.com/terms/s/smith-maneuver.asp

I have not done this, so can’t comment more with any insight.

Smith manoeuvre.

Ok, so the original scenario is that the asset went up 100K, and the asset holder is whining that they had to pay 500$ more for their property tax (I guess we’ll continue to ignore that the owner hasn’t crystallized that gain, and the DNV is building spaceports with their free money windfall).

So smith manoeuvre would have the home owner take that 100K gain out as a HELOC (adding debt), and then using the interest expense write-off on that debt to offset the 500$ tax required of them. 100K at 2.5 pts is 2500K, so you’d certainly offset the 500$ tax burden. Unless of course the 100K investment went in the wrong direction…. but that never happens right?

That seems like the city/dnv gets the opportunity to offload investment risk onto the home owner.

So here’s an idea.  In return for these tax boosts, the home owner gets the opportunity to participate in the financing of the city’s mega-project.  At a preferred and guaranteed rate of return (9% seem fair?), and backed by the city in case of failure.  Home owner can then hand over the 500$ tax burden to the home owner, who then gets a low/no risk oppty to make 9pts on his asset appreciation that he can’t otherwise tap.

Mega projects always make 9 %, don't they?

https://www.dnv.org/news/mayors-statement-metro-van-initiating-termination-contractor-wastewater-treatment-plant