Vancouver's Real Estate Market

[Mr.HappySilp]

Originally Posted by kr4l

As a business owner, I do not charge extra for using plastic. However, if places do charge extra, I would not see a problem with them not telling you. This is a convenience fee. If you don't like it, don't use credit cards

Also, you're looking at things in a very small perspective. That 3-4K in profit loss a year to using cards is nothing for the convenience for people. You know how much money you'd lose if you were cash only nowadays?

Not too sure but lot's of Chinese place I go to is cash only (mostly BB tea place, small coffee shops, dine out place again small ) and they seem fine.

[meme405]

Originally Posted by Mr.HappySilp

Not too sure but lot's of Chinese place I go to is cash only (mostly BB tea place, small coffee shops, dine out place again small ) and they seem fine.

They seem fine, because most of the people going to those places (in richmond in general), are accustomed to it, as I am sure you are yourself.

However as someone of non-asian descent, not accustomed to it, I can confirm I have left places whether it was a coffee shop, BBtea place, or restaurant, after they said they only accept cash.

So there are definitely times where they lose business. Now if that loss is substantial enough for it to warrant them getting a machine I have no idea.

I know that a cash only place in North shore, dt, or burnaby (outside of crystal mall), probably suffers immensely, if they don't have a terminal.

[sonick]

Gg property taxes. New BC assessment for next year has huge increases from last https://evaluebc.bcassessment.ca

[Hondaracer]

Yea a lot of people I know saw 30-45% increases :/

Think I may try and dispute mine as a house recently sold across the street for less than mine is assessed at and it's a far bigger lot and house

[fliptuner]

Up 50% from last year

[Euro7r]

It's like we don't pay enough property taxes already.....

[lowside67]

Already seeing everybody start crying on Facebook about property taxes going up... it's maddening. All the same people who have enjoyed the smugness and security of seeing their equity skyrocket simply by virtue of owning any house on any block in any city in the GVRD - no skill required are now starting to cry the blues.

At some point all of these "millionaires" have to accept that one of the byproducts of having received this free gift is paying some property tax proportional to an actual market value for their house - if anybody would like to have me pay a few extra grand a year in property tax in exchange for giving up the value that their house went up in the past 3 years - they are welcome to do so.

-Mark

[Traum]

2 things to point out regarding property tax:

1) Assessed value going up does not necessarily mean your property tax will go up as well. From what I understand, the actual payable amount depends on whether your assessed value increased more or less than other properties in your "area". If your property went up by 50% while everyone else's only went up by 30%, then yes, you will pay more property tax. If your property only increased 20% while everyone else's increased by 30%, then you are actually supposed to pay less. I remain skeptical of how true this actually is, but it is what the news have been trying to feed us.

1b) Having said #1, CoV at least, has passed a property tax increase to cover a $55M increase in budget. So effectively, even if your property value only increased by 30%, you'll still get hit with a property tax increase.

2) In response to Mark, you assumption that we should just swallow the property tax increase because the assessed value has increased by leaps and bounds is true up to a point. But I recall re-iterating this point multiple times in the thread -- for long term home owners who have no plans to sell, higher property tax due to escalating assessed / market prices is only serving as a means to punish them for staying and living in Vancouver. I always use my parents as example because they / we've been living at the same darn house for almost 30 years. We have no plan to sell because we love our place, and we love our neighbourhood. But ever-escalating property taxes is making it hard for us to stay in "our home". I can't remember what it was last year, but I think we paid something ridiculous like $7k in total, and there is no break / home owner discount since the assessed value is inflated to their $1.3 or $1.5M discount limit. As retirees, they're getting punished for something they did not do, and is completely beyond their control.

Others RSers in the past have suggested that we can defer the property tax at a minimal interest rate until their eventual passing, and that is honestly a viable solution. Still, that does not change the fact that they / their estate are getting hit and punished for the out of control skyrocketing RE price situation that the federal and provincial government have neglected and created.

If it is an investment property, then fine, I'm totally OK with paying whatever tax the rules of the game deems appropriate. For primary residences though, the ever increasing property tax does not make sense. The home owner discount (on property tax) should have been the ticket to address this flaw, but again because of the grossly inflated assessed value, and how the provincial government is only nominally increasing the discount limit, the flaw remains.

Originally Posted by lowside67

Already seeing everybody start crying on Facebook about property taxes going up... it's maddening. All the same people who have enjoyed the smugness and security of seeing their equity skyrocket simply by virtue of owning any house on any block in any city in the GVRD - no skill required are now starting to cry the blues.

At some point all of these "millionaires" have to accept that one of the byproducts of having received this free gift is paying some property tax proportional to an actual market value for their house - if anybody would like to have me pay a few extra grand a year in property tax in exchange for giving up the value that their house went up in the past 3 years - they are welcome to do so.

-Mark

[Nlkko]

Originally Posted by lowside67

Already seeing everybody start crying on Facebook about property taxes going up... it's maddening. All the same people who have enjoyed the smugness and security of seeing their equity skyrocket simply by virtue of owning any house on any block in any city in the GVRD - no skill required are now starting to cry the blues.

At some point all of these "millionaires" have to accept that one of the byproducts of having received this free gift is paying some property tax proportional to an actual market value for their house - if anybody would like to have me pay a few extra grand a year in property tax in exchange for giving up the value that their house went up in the past 3 years - they are welcome to do so.

-Mark

Nice unrealizeable paper profit for these "long-term investors" tho. Cuz it's actually a roof over their heads.

[Nlkko]

Originally Posted by Traum

2 things to point out regarding property tax:

1) Assessed value going up does not necessarily mean your property tax will go up as well. From what I understand, the actual payable amount depends on whether your assessed value increased more or less than other properties in your "area". If your property went up by 50% while everyone else's only went up by 30%, then yes, you will pay more property tax. If your property only increased 20% while everyone else's increased by 30%, then you are actually supposed to pay less. I remain skeptical of how true this actually is, but it is what the news have been trying to feed us.

1b) Having said #1, CoV at least, has passed a property tax increase to cover a $55M increase in budget. So effectively, even if your property value only increased by 30%, you'll still get hit with a property tax increase.

2) In response to Mark, you assumption that we should just swallow the property tax increase because the assessed value has increased by leaps and bounds is true up to a point. But I recall re-iterating this point multiple times in the thread -- for long term home owners who have no plans to sell, higher property tax due to escalating assessed / market prices is only serving as a means to punish them for staying and living in Vancouver. I always use my parents as example because they / we've been living at the same darn house for almost 30 years. We have no plan to sell because we love our place, and we love our neighbourhood. But ever-escalating property taxes is making it hard for us to stay in "our home". I can't remember what it was last year, but I think we paid something ridiculous like $7k in total, and there is no break / home owner discount since the assessed value is inflated to their $1.3 or $1.5M discount limit. As retirees, they're getting punished for something they did not do, and is completely beyond their control.

Others RSers in the past have suggested that we can defer the property tax at a minimal interest rate until their eventual passing, and that is honestly a viable solution. Still, that does not change the fact that they / their estate are getting hit and punished for the out of control skyrocketing RE price situation that the federal and provincial government have neglected and created.

If it is an investment property, then fine, I'm totally OK with paying whatever tax the rules of the game deems appropriate. For primary residences though, the ever increasing property tax does not make sense. The home owner discount (on property tax) should have been the ticket to address this flaw, but again because of the grossly inflated assessed value, and how the provincial government is only nominally increasing the discount limit, the flaw remains.

What punishment? That is how market works. It's not like they increase the tax rate. Similar to income tax you earn more, you pay more tax. The only difference is your "income" in this case is unrealized. Not everything is the government's fault. Owning a home is not a necessity. You can rent you know.

Not a dig against you. It is what it is.

[lowside67]

Originally Posted by Traum

2 things to point out regarding property tax:

2) I always use my parents as example because they / we've been living at the same darn house for almost 30 years. We have no plan to sell because we love our place, and we love our neighbourhood. But ever-escalating property taxes is making it hard for us to stay in "our home". I can't remember what it was last year, but I think we paid something ridiculous like $7k in total, and there is no break / home owner discount since the assessed value is inflated to their $1.3 or $1.5M discount limit. As retirees, they're getting punished for something they did not do, and is completely beyond their control.

I don't really understand your point. Your parents may not be planning to sell tomorrow, but when they finally do sell, they are going to be paid the same market price that they would have gotten whether they lived there for 1 year or 30. Given that the reward they will get upon sale is the same no matter how long they were there, why should they have a cheaper cost to live there?

It's sort of like saying that your parents have a car with a V8, and have had it for 30 years but now that the price of gas is $1.35/L instead of $0.30/L, they can no longer afford to put gas in it. Your argument is basically suggesting that since they love their V8 and have had it for a long time, they should get to buy gas at a discounted rate to allow them to keep driving a V8, while those people who are buying a car for the first time would crunch the numbers and come to the conclusion they needed a 4 cylinder because the V8 wasn't affordable to run.

Just because they have owned it for a long time doesn't mean anything about what the costs in the future will be to own it, that's not punishment - that's inflation. If your parents are paying property taxes of $7k in the city of Vancouver, that means their last assessment was in the neighborhood of $2.2-million and on a sheer guess, I would imagine that means a true market value of closer to $3-million given that most detached houses will see a 35-50% increase this year and that will still likely understate true market value.

In the last 10 years alone the average home in Greater Vancouver (per benchmark) has increased in value 2.86x so in a case of a hypothetical $3-million house, their personal net worth would have gone up by about $2-million and they would have paid well under $50,000 in property taxes in that time. It's hard to stir up much emotional response to their plight given these figures (which I very much am saying up front are just guesses and speaking generally using some benchmark figures) though.

-Mark

[Tapioca]

The argument that seniors who have paid off their homes make is that after 25-30 years of slaving away, they have earned the right to enjoy the fruit of their hard work by living in their homes at minimal cost for the rest of their lives. A corollary of that argument is that homes are not investments per se, but merely a means to buying housing security in old age when one is no longer able to earn an income.

Of course, such arguments in a market like Metro Vancouver are meaningless. Honestly, people like Traum's parents need to hire a financial planner and figure out how to minimize their living costs if they wish to stay in their home. Maybe a home equity line of credit with a minimum monthly payment? A property tax deferral? Or, do the most logical thing and unlock the value of the home by selling, buy a townhouse in the same neighbourhood for half the price, and live in comfort for the rest of your days.

[Mr.HappySilp]

Originally Posted by lowside67

I don't really understand your point. Your parents may not be planning to sell tomorrow, but when they finally do sell, they are going to be paid the same market price that they would have gotten whether they lived there for 1 year or 30. Given that the reward they will get upon sale is the same no matter how long they were there, why should they have a cheaper cost to live there?

It's sort of like saying that your parents have a car with a V8, and have had it for 30 years but now that the price of gas is $1.35/L instead of $0.30/L, they can no longer afford to put gas in it. Your argument is basically suggesting that since they love their V8 and have had it for a long time, they should get to buy gas at a discounted rate to allow them to keep driving a V8, while those people who are buying a car for the first time would crunch the numbers and come to the conclusion they needed a 4 cylinder because the V8 wasn't affordable to run.

Just because they have owned it for a long time doesn't mean anything about what the costs in the future will be to own it, that's not punishment - that's inflation. If your parents are paying property taxes of $7k in the city of Vancouver, that means their last assessment was in the neighborhood of $2.2-million and on a sheer guess, I would imagine that means a true market value of closer to $3-million given that most detached houses will see a 35-50% increase this year and that will still likely understate true market value.

In the last 10 years alone the average home in Greater Vancouver (per benchmark) has increased in value 2.86x so in a case of a hypothetical $3-million house, their personal net worth would have gone up by about $2-million and they would have paid well under $50,000 in property taxes in that time. It's hard to stir up much emotional response to their plight given these figures (which I very much am saying up front are just guesses and speaking generally using some benchmark figures) though.

-Mark

You are assume they will make money when they sell. But what if the housing market crash really badly and they actually lose money by selling. Will the gov refund some of the income tax they been paying up when the value were high?

Also do you really think property tax will go down if the housing market burst? Say a house is value at 2m and the property tax is 7k. Now the market crash and it is only worth 1m, do you honestly think the property tax will be lower to 3.5k. Most likely not it will be around 7k or even more.

Is whole assessment is flaw. It should be tie to inflection up to a max % so property tax doesn't skyrocket out of control.

[noclue]

too many whiners. Vancouver has one of the lowest property taxes I've ever seen. Go to the USA, especially California and Texas where property taxes are $10,000+ for a house assessed at $1M.

And besides, old people can let the government pay the property tax with that deferred loan bullshit. Guarantee if they got rid of that seniors will be forced to sell.

[lowside67]

Originally Posted by Mr.HappySilp

You are assume they will make money when they sell. But what if the housing market crash really badly and they actually lose money by selling. Will the gov refund some of the income tax they been paying up when the value were high?

Also do you really think property tax will go down if the housing market burst? Say a house is value at 2m and the property tax is 7k. Now the market crash and it is only worth 1m, do you honestly think the property tax will be lower to 3.5k. Most likely not it will be around 7k or even more.

Is whole assessment is flaw. It should be tie to inflection up to a max % so property tax doesn't skyrocket out of control.

You clearly don't understand how property tax works.

In a super simple example: if every single property exactly doubled its tax assessed value, the amount of property tax each person would pay wouldn't change by one penny (excluding inflation). The property tax rate is set at the amount that makes the total property tax needed by the city divided by the total tax assessed value of every property in the city.

The reason people's taxes will go up next year is not because houses went up 50% in value, but because apartments and other buildings went up less. That means that more of the overall burden will shift to single family homes. A 50% increase in value of your house does not likely mean a 50% increase in property taxes because everything went up.

Hope that helps clarify.

-Mark

[lowside67]

Originally Posted by Tapioca

The argument that seniors who have paid off their homes make is that after 25-30 years of slaving away, they have earned the right to enjoy the fruit of their hard work by living in their homes at minimal cost for the rest of their lives. A corollary of that argument is that homes are not investments per se, but merely a means to buying housing security in old age when one is no longer able to earn an income.

Their property tax pays for things like garbage collection, policing, road maintenance, parks, and dozens of other things that they likely use every day. Property tax rates are set at rates exactly equal to what it takes to make every person who lives in a given city pay the total cost of all the services they use. Property taxes go up over time because the cost of all the things that people in these houses use go up in time - that's inflation.

Their 25-30 years of "slaving" entitles them to live in a house without paying rent - that's all. It doesn't entitle them services that cost money without paying money for them - that's what property taxes are.

-Mark

[quasi]

Originally Posted by Tapioca

The argument that seniors who have paid off their homes make is that after 25-30 years of slaving away, they have earned the right to enjoy the fruit of their hard work by living in their homes at minimal cost for the rest of their lives. A corollary of that argument is that homes are not investments per se, but merely a means to buying housing security in old age when one is no longer able to earn an income.

Of course, such arguments in a market like Metro Vancouver are meaningless. Honestly, people like Traum's parents need to hire a financial planner and figure out how to minimize their living costs if they wish to stay in their home. Maybe a home equity line of credit with a minimum monthly payment? A property tax deferral? Or, do the most logical thing and unlock the value of the home by selling, buy a townhouse in the same neighbourhood for half the price, and live in comfort for the rest of your days.

You mentioned it in your second paragraph but Seniors can always defer paying there taxes, the interest isn't that bad. No senior is going to lose their paid off home because they can't afford taxes, they can be paid off when they downsize or die.

[godwin]

It is just not bad.. it is 0.70%... so basically defer and invest the deferment and pocket the differential.

It is not just "seniors" anyone over 55% can do it.

Originally Posted by quasi

You mentioned it in your second paragraph but Seniors can always defer paying there taxes, the interest isn't that bad. No senior is going to lose their paid off home because they can't afford taxes, they can be paid off when they downsize or die.

[godwin]

In Vancouver and I think most of GVRD garbage collection is a seperate bill with sewer

Utility and landfill bill payments, help, and information | City of Vancouver

Originally Posted by lowside67

Their property tax pays for things like garbage collection, policing, road maintenance, parks, and dozens of other things that they likely use every day. Property tax rates are set at rates exactly equal to what it takes to make every person who lives in a given city pay the total cost of all the services they use. Property taxes go up over time because the cost of all the things that people in these houses use go up in time - that's inflation.

Their 25-30 years of "slaving" entitles them to live in a house without paying rent - that's all. It doesn't entitle them services that cost money without paying money for them - that's what property taxes are.

-Mark

[winson604]

Originally Posted by godwin

In Vancouver and I think most of GVRD garbage collection is a seperate bill with sewer

Utility and landfill bill payments, help, and information | City of Vancouver

In Vancouver Garbage collection has always been part of the Property Tax bill, it's a separate line item but it's all part of one bill.

[ImportPsycho]

So, should renters expect rents to go 30%~50% up in 2017 as well?

[westopher]

Well, they can't raise prices more than 3.5% legally.
Renters should expect to get evicted for "renovations," then see their place available on CL next month for 30-50% more

[Tapioca]

Friends of ours are about to rent out their condo in Yaletown. It's nothing special - just a typical 2 bed/2 bath unit in a building that's over 10 years old. Apparently market rent for similar units is now ~$3500/month.

Madness.

[westopher]

I just don't understand where the money comes from. Its like theres more of it out there than I ever imagined.
If you are a couple that rents that, I'd say you need 7k+ post tax income to afford that. 6 figures just to get by is a crazy prospect.

[Tapioca]

Originally Posted by westopher

I just don't understand where the money comes from. Its like theres more of it out there than I ever imagined.
If you are a couple that rents that, I'd say you need 7k+ post tax income to afford that. 6 figures just to get by is a crazy prospect.

Yeah, it's crazy when you think about it: a couple making 120K would spend half of their salary in rent.

But, then again, it's Vancouver where a lot of income is not reported as personal income. Lots of people are registered as sole proprietors, etc. Wealth management is a pretty big business here that nobody talks about.