I can't afford to pay the tax on my $6.7 million home - boo hoo boo hoo

[Cock Throppled]

It forces a sale.

Only if the inheritors can't come up with the taxes. If they want to keep the house, it would be no different than taking out a loan for a house, only they's only have to borrow enough to make tax payments. Still a pretty good deal - they inherit a house worth $1.75 million, minus $250,000.
Either way, the people inheriting the property are the beneficiaries.

 

[felixthecat]

Only if the inheritors can't come up with the taxes. If they want to keep the house, it would be no different than taking out a loan for a house, only they's only have to borrow enough to make tax payments. Still a pretty good deal - they inherit a house worth $1.75 million, minus $250,000.
Either way, the people inheriting the property are the beneficiaries.

It is a great deal in many aspects. The tax rate was low to begin with. Even with surcharges, Vancouver property tax % should be about the lowest in the country.

Many of the other countries have inheritance tax - those would force a home sale easily.

Add no capital gain tax on the primary residence in Canada. Again, there are places in the world without that exception, places where capital gains are taxed at the same rate as income, and places where property taxes on expensive housing are higher than on average homes.

So for inheritance / gifts / non-employment income / property tax, Canada is distinctively anti-socialist. And rich people still complain, go figure.

Owning a home does not come with a guarantee of financial prosperity for the owners and all their kin forever. If people want to stay home rich and cash poor, they have enough tools (deferred taxes, reverse mortgages), however irrational that behaviour is. It will leave less to their heirs, but their lifetime is covered. They have a choice - satisfy their sentimental values while alive or improve the life of their heirs.

 

[clu]

So this conversation seems to have gone on four tangents, at least.

To the original point, I don't see the justification for giving some homeowners an additional school surtax on top of the property tax that already goes up as the property value increases.

I think they're just leveraging the resentment of those that didn't get in on the ground floor and thereby hoping they don't piss off too many of their voters. It's a political calculation, not a logical one.

 

[elanov]

The problem is some people with these kind of property are lucky that their prices are appreciated that much but in reality they can't afford to pay such taxes. I think the collection mechanism is broken and need fixes

 

[storm rider]

Why anyone whose principal residence is worth 6.7 million would not up and sell it and reap the massive profit and take the money out of the country escapes me.

Sell and bugger off to say Costa Rica or Thailand and park the money in a tax have like the Cook Islands.

SR

 

[clu]

Why anyone whose principal residence is worth 6.7 million would not up and sell it and reap the massive profit and take the money out of the country escapes me.

Sell and bugger off to say Costa Rica or Thailand and park the money in a tax have like the Cook Islands.

SR

Kids in school, maybe? And homes mean more than just a commodity to some people.

There's no need to "park the money in a tax haven" once sold though. Sales on principal residences are not subject to tax.

And that's the flaw with property taxes: mostly you're taxed on income, but then after that it's yours. But if you buy a home though you get taxed on it over and over every year, regardless of whether or not it appreciates in value. It isn't just homeowners that use roads, schools, etc. so why does the property get taxed for it?

 

[clu]

Only if the inheritors can't come up with the taxes. If they want to keep the house, it would be no different than taking out a loan for a house, only they's only have to borrow enough to make tax payments. Still a pretty good deal - they inherit a house worth $1.75 million, minus $250,000.
Either way, the people inheriting the property are the beneficiaries.

Jewellery, cars, antiques, books, fine china, etc. You can bequeath any of these things without a catch or penalty. Family property is family property. Except homes.

 

[marsvolta]

something has to be done! how can people who own astronomically valuable assets afford these taxes! just think about the cost of upkeep on a house of this value. and the benz and the ferrari. the government should drop sales taxes from all luxury goods. maybe even set up a fund so that the brakes and tires on high end vehicles are subsidized. don't get me started about the airplane.

how this gets paid for is pretty simple. push the burden of city operations down on to the middle class and poor! maybe a $50k head tax? the problem is always that the poor ain't got that kinda money... so maybe auction them off to the people who have extra cash? historically, this has worked in the past...

 

[clu]

something has to be done! how can people who own astronomically valuable assets afford these taxes! just think about the cost of upkeep on a house of this value. and the benz and the ferrari. the government should drop sales taxes from all luxury goods. maybe even set up a fund so that the brakes and tires on high end vehicles are subsidized. don't get me started about the airplane.

how this gets paid for is pretty simple. push the burden of city operations down on to the middle class and poor! maybe a $50k head tax? the problem is always that the poor ain't got that kinda money... so maybe auction them off to the people who have extra cash? historically, this has worked in the past...

Doesn't seem like you read the thread? The people with these expensive homes aren't necessarily rich. An example was an elderly woman who called into a radio show saying she'd lived in the same house for 40 years and now couldn't afford it due to the inflated taxes. Her home was a tenth of its current value or something like that when she bought it.

It amazes me how many people just callously reply "well move then" like a home means nothing and uprooting one's life in their 70s or 80s is no big deal.

(And yeah they added the deferral thing for over 55, but it can still be a problem e.g. for a second generation.)

IMHO taxing should be based on income. That'll still cover your Ferrari buyers.

 

[licks2nite]

Some folks have lived in Vancouver homes decades. Folks had usable skills since those days when jobs were more than flipping hamburgers and stocking shelves. Skills in home repair, renovation and landscaping that today show in many of the beautiful home in the west side of Vancouver and more recently in the east side too. Just because folks know how to care for their lot, folks shouldn't be penalized with higher taxes. This leads into another discussion about what should and what shouldn't be taxed. Briefly, GST that taxes imports is a far better tax than taxing folk's effort to improve themselves.

 

[felixthecat]

The people with these expensive homes aren't necessarily rich.

They are rich.

"rich (adjective) - 1. having a great deal of money or assets; wealthy."

Having earned income is not a prerequisite to be rich. Say, somebody won a lottery (or was an owner of Vancouver real estate at the right time).
Good for them! But let's not give them any tax preferences just because they decided to sit on their multimillion dollar assets rather than take advantage of their lucky break.

Rich people should prepare they will be taxed more in Canada, not less. It comes from the logic of income distribution - the gap between rich and poor is widening. The history shows, poor people have a finite tolerance to inequality and there will be some corrective measures one way or another. Democracies have a better chance to do it in a non-violent manner.

 

[clu]

They are rich.

"rich (adjective) - 1. having a great deal of money or assets; wealthy."

Having earned income is not a prerequisite to be rich. Say, somebody won a lottery (or was an owner of Vancouver real estate at the right time).
Good for them! But let's not give them any tax preferences just because they decided to sit on their multimillion dollar assets rather than take advantage of their lucky break.

Rich people should prepare they will be taxed more in Canada, not less. It comes from the logic of income distribution - the gap between rich and poor is widening. The history shows, poor people have a finite tolerance to inequality and there will be some corrective measures one way or another. Democracies have a better chance to do it in a non-violent manner.

I'm aware of the dictionary definition. Ok... If you want to be pedantic, let me rephrase: they do not have liquidity. The money is tied up in the home. Would you prefer only people who have additional liquid wealth be able to afford a home? To my mind that's making the problem worse: making home ownership even more unattainable than it is now.

Because excessively taxing those who got in pre-growth on the value of their non-liquid assets isn't going to make homes any cheaper or more attainable for the rest of us. All you're doing is punishing (perhaps vindictively so) many average people who managed to scrape together enough to buy a home before it all went to hell.

Again, it's not like they aren't already paying more on the appreciated value since property tax is a percentage of present appraised value. The issue being talked about here is an additional selective surtax for school funding.

And why is everyone so callous about a home like it's just a commodity and not, you know, someone's actual home?

 

[marsvolta]

reverse mortgage?

don't get attached to shit! i'm really attached to my stock portfolio... have taken good care of it for years. how dare they charge me capital gains on something that is like a member of the family to me!

were those people whose homes appreciated so much out there lobbying to chill the market? hell no! trying to have cake and eat it to i say.

 

[clu]

reverse mortgage?

don't get attached to shit! i'm really attached to my stock portfolio... have taken good care of it for years. how dare they charge me capital gains on something that is like a member of the family to me!

were those people whose homes appreciated so much out there lobbying to chill the market? hell no! trying to have cake and eat it to i say.

Capital gains are taxed when realised. The home is being taxed when the value is not yet realised. That's the whole point.

How do they have their cake and eat it too, exactly? They can't both sell and not sell at the same time. Those who treat their homes as commodities won't have a problem.

It's the ones who for some "crazy" reason actually want to keep the roof over their head in the neighbourhood where their kids are in school and near their jobs, etc. that this affects.

 

[john smith 69]

Here's couple realities that most Vancouverites don't realize:
Vancouver residential property taxes are actually very low. I still own my house in Saskatoon, and my property tax rate (as a percentage of the property value) is notably higher than Vancouver rates. I used to date a woman from Portland, and when she looked at moving up here and buying a place, she couldn't get over how low the property tax rates here were.

Secondly, and this is really bonkers: Because people complain and vote, and companies do not complain or vote, Vancouver has shifted the property tax burden from residential properties to commercial property in a very disproportionate way. A commercial property is taxed at its MAXIMUM REDEVELOPMENT VALUE. Think about that: not taxed based on what is actually there, but based on what could potentially be built there in the future. So every mom-and-pop business owner with a little storefront on Main street, Commercial, Davie Street, etc is paying tens (and sometimes hundreds) of thousands of dollars a year in property taxes. Based on the fact that their little building could be torn down and replaced with big condos. Thats messed up. And thats why the city isn't more interesting: nobody can afford to run any sort of business unless its a financial home-run.

 

[Jethro Bodine]

Don’t they have a program in Vancouver where people can let their property taxes lapse and then they get paid off when they sell the home? I bring this up because a friend of mine here in Winnipeg has an elderly aunt in Vancouver with this problem. Her and her husband bought their home on a large lot ( by today’s standards in Vancouver) in the early 60’s. Now it is worth millions but the old gal won’t move. Says she will die in that home. Anyway he was saying she can’t afford the taxes so she has this type of areangement. Is this correct?
Cheers J

 

[felixthecat]

Would you prefer only people who have additional liquid wealth be able to afford a home? To my mind that's making the problem worse: making home ownership even more unattainable than it is now.

Yes, people always need some spare income/wealth to be able to afford a home: maintenance, utilities, taxes, mortgage if any. Owning a home never guaranteed your situation wouldn't change in a way that forces you to sell. Nothing new here.

Home ownership becomes more attainable when demand is reduced and/or supply is increased. I'm totally for people living in the houses they can afford. If rich people stop hanging on the houses they cannot afford, it will both reduce demand and increase supply. So yes, it would improve affordability for the rest of us.

As for "excessively taxing" and "punishing", I'd argue the opposite:

Vancouver right now is a tax heaven for rich people who decide to keep all their wealth invested in their home, and have little income otherwise.

Let's compare to, I don't know, Switzerland, which is one place rich people like. Based on wikipedia (https://en.wikipedia.org/wiki/Taxation_in_Switzerland).
Property tax rate in Vancouver, 2018: 0.247% (from https://vancouver.ca/home-property-development/residential.aspx).
Switzerland: tax 0.3-0.5% of is levied on the value of all assets (such as real estate, shares or funds). That's "wealth tax". There is also "real estate tax" sometimes and that's another 0.02-0.3% a year.

Inheritance / gift taxes: none here, yes in Switzerland (with exemptions and varies; can be 30% of the estate if not a close relative).
Capital gains tax exemption for the primary residence: yes in Canada, no exemption I see for Switzerland's "property gains tax".
Delaying some taxes for decades until death? I doubt Swiss even dream of that.

Bottom line - as OP said, cry me a river. The rich homeowners have it too easy here - just compare to other cities and countries.
If this subject goes to a referendum, they won't get much sympathy from either socialists (because the rich are supposed to pay a bigger share) or from capitalists (because asset owners should be smart).

 

[westwoody]

So every mom-and-pop business owner with a little storefront on Main street, Commercial, Davie Street, etc is paying tens (and sometimes hundreds) of thousands of dollars a year in property taxes.

Exactly, this is why Robsonstrasse disappeared and was replaced with a shitty Rodeo Drive imitation.

 

[Mrmotorscooter]

What ticks me off about the whole thing is the foriengn speculators who flipped these properties over and over driving prices through the roof paid no taxes! They were the real winners in all this and the local inhabitants have been chicken cooped to being rent payers. Locals who's home's have increased in value have to leave them, WTF happened to Canada. This should never have been allowed in the first place!

 

[licks2nite]

Radio discussion this morning, November 26th, about heroin money laundering since the early 1990s and later deadly fentanyl by the "Big Circle Boys" in B.C. casinos and real estate, particularly Vancouver but also Toronto, Montreal and Calgary. A billion dollars of laundered money per year in Vancouver real estate alone since 2012. And why police can't combat such crime in Canada because of lax laws compared to laws in U.S. and Australia. That follows from some months ago in a radio interview with B.C. attorney-general to the affect that officers of the Chinese military and influential individuals with connection to the highest levels of Chinese government were laundering proceeds of fentanyl sales in British Columbia.

Decades long home owners in Vancouver are among the same victims that have been dying of fentanyl. Canadians don't need to be further victimized by their own governments that have let best paying jobs go overseas and now taxing victims out of homes they've loved.