‘Tax holiday’ for condo buyers

Bill Cleverley
Times Colonist

Two Victoria councillors are crying foul over a city decision to give a 10-year “tax holiday” to people buying units in Customs House — a development that they say is being marketed as one of the priciest luxury condo projects downtown Victoria has ever seen.

“This development is being marketed as the most expensive and most luxurious condos in Victoria,” said Coun. Jeremy Loveday.

“I’m happy to see this project moving forward in terms of the revitalization of this building, but I don’t think the city or everyday taxpayers should be subsidizing some of the most wealthy through this tax credit.”

Condominiums in the project adjacent to the Inner Harbour on Government and Wharf streets have been reported to be selling for $800,000 to more than $10 million. Units currently on the Multiple Listing Service are priced between $1.6 million and $3.09 million.

Loveday was supported by Coun. Ben Isitt, who wanted to ensure short-term vacation rentals would not be permitted in the new condominiums. “I have zero interest in giving a 10-year tax holiday to a ghost hotel,” Isitt said.

The 10-year tax break, which ultimately won city council approval, is to offset the $6.5-million cost of seismic upgrading of the 1914 heritage-designated Customs House. It is being renovated by developer Stan Sipos at an estimated cost of $28.1 million.

Some councillors said that Customs House met the seismic program criteria, was vetted by the Victoria Civic Heritage Trust and, therefore, should be approved.

“I did not support it [the development] from a land-use and planning point of view, but in terms of fairness I have to support what’s before us today because it meets the requirements of our current program,” said Coun. Pam Madoff, noting that the objective of the tax program is to “stabilize our heritage buildings.”

“If we started to only give tax incentive to buildings that were being retrofitted for a particular type of accommodation, it’s the buildings that suffer,” Madoff said.

Coun. Geoff Young said it’s not a matter of if, but when a major earthquake will occur.

“At that time, every building that is vulnerable will be lost and that includes a lot of our heritage building stock,” he said.

“We all know the negative economic ramifications of that.”

Coun. Chris Coleman said it’s unfair to call what is actually a program of tax deferral a “tax holiday.”

“What happens with this program is the improvements are made, the seismic capacity is increased and the tax then goes up in year 11 when they start paying,” Coleman said.

“Part of the genius of this whole process is by year 18, I believe, the taxpayer is more than made whole and we end up making more money on the future benefit.”

The estimated value of the tax exemption will be $5.4 million over the 10 years, which is less than the $6.5-million cost of seismic upgrading, city staff say.

The tax break is applicable to the Customs House portion of the development, in which about 22 condominium units are to be built. It does not apply to the addition which is replacing the 1957 Federal Building.

The city’s tax incentive program was initiated in 1998 to assist heritage-designated building owners with the cost of seismic upgrading to help encourage converting the upper floors of downtown heritage buildings for residential use.

Since it was introduced, the program has created 694 residential units in 43 buildings, city staff say.

Glacier Community Media © Copyright 2013-2018

other

1.    Has gone from 15% to 20%, effective today.
   2.    Contracts written before Feb. 20, 2018 with a closing on or before May, 2018 are exempted, but only for Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan or Nanaimo Regional District. Note this exemption does not apply in Greater Vancouver.
   3.    Transfers pursuant to court order, order nisi of foreclosure, separation agreement, transfer from personal rep of deceased’s estate to beneficiary or transfer to surviving joint tenant are also exempt, provided the triggering event occurred before Feb. 20, 2018.
   4.    This tax applies to the Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan, Nanaimo Regional District and Greater Vancouver. The areas for each region can be found at https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand/additional-property-transfer-tax/bc-areas
   5.    Only on residential property; if property is farmland or commercial with a residential component, tax applies on the residential component.
   6.    Exemption for BC Provincial Nominee Program still applies.

   SPECULATION TAX

   1.    Tax is meant to target foreign and domestic homeowners who do not pay income tax in B.C.
   2.    Tax will apply to same areas as foreign buyers tax apart from Okanagan, where it only applies to Kelowna and West Kelowna.
   3.    Starts in 2018 at $5.00 per $1,000.00 of assessed value, goes up to $20 in 2019.
   4.    Not sure how this will affect vacation homes, nor when this tax is payable.

   PROPERTY TRANSFER TAX

   1.    Tax rises from 3% to 5% on value of homes over $3,000,000.00.
   2.    Remains at 1% on first $200,000.00, 2% on amounts between $200,000.00 and $2,000,000; 3% on amounts between $2,000,000.00 and $3,000,000.00 and 5% on amounts over $3,000,000.00.

   PRE-SALE CONDO ASSIGNMENTS

   1.    Developers will collect and report information about pre-sale condo purchases; nothing else in budget about pre-sale contracts or assignments that we have seen.

   B.C. HOME OWNER SECOND MORTGAGES  

   1.    This program is now cancelled – don’t think it was used much anyway.

Dirk Meissner
REP

Real estate experts say the British Columbia government started to build a strong foundation for more affordable housing in Tuesday’s budget, but opinion varies on the expected outcomes.

Finance Minister Carole James is trying to ease the province’s housing crisis by introducing a new tax on property speculators, expanding and increasing a tax on foreign homebuyers and spending $6 billion to build affordable housing over the next decade.

James said she expects to see property values start to drop as her budget measures kick in.

“We’re an amazing province,” she said Wednesday after speaking to the Greater Victoria Chamber of Commerce. “There’s no question people are going to want to live in B.C. But we need to see a moderation and my hope is, by addressing both supply and demand, you’ll see more supply in the market that will ease some of the cost pressures and you’ll see a moderation.”

Cameron Muir, chief economist at the Real Estate Board of B.C., said plans to help build 114,000 affordable housing units will offer much needed supply for rental and low-income properties.

But he said a tremendous undersupply of available homes in Metro Vancouver, Victoria and Kelowna, coupled with B.C.’s strong economy, will keep home prices from dropping.

“In terms of market impacts, it may be great to raise tax revenue, but this is not going to have a demonstrable impact on housing markets,” said Muir. “The chief culprit of rising home prices is the inability to supply the housing market in a timely fashion.”

Tom Davidoff of the University of British Columbia’s Sauder school of business said he hopes the speculation tax will help make the lower end of the market more affordable, particularly for condos.

The levy will be introduced this fall, targeting foreign and domestic homeowners who do not pay income tax in B.C., including those who leave homes vacant.

In the 2018 tax year, the rate will be $5 per $1,000 of a property’s assessed value. Next year, the rate will rise to $20 per $1,000 of assessed value. It will initially apply to Metro Vancouver, the Fraser Valley, the Victoria area, the Nanaimo Regional District, Kelowna and West Kelowna.

A non-refundable income tax credit will also be introduced to offset the new levy, providing relief for people who do not qualify for an exemption but who pay income taxes in B.C.

The tax makes a lot of economic sense, Davidoff said, because B.C. has high income and sales taxes but low property taxes, which encourages vacationers to buy property and makes life more expensive for workers.

“That is the worst possible idea in a market like Vancouver where you have a tremendous amenity level and it’s so hard to build,” he said. “We’re such a draw for people who don’t want to work here, but do want a lovely vacation home.”

People who are affected by the new levy might sell their properties, freeing up housing for locals, he said.

One issue the budget didn’t directly address is zoning, Davidoff said, adding that the taxes on speculation and foreign buyers might provide some indirect help because they will “bash” the high end of the real estate market. That encourages people to push for changes in zoning density to keep their property values up, he explained.

“The property they own is going to be worth a lot less than it was before this tax. When you have new zoning, there’s a trade off your property becomes more valuable because you can put greater density on it, but you don’t like what’s happening to your neighbourhood,” Davidoff said.

He said the changes make it more attractive for people to subdivide a single luxury property into five or six moderately priced properties.

Copyright © 2018 Key Media Pty Ltd

Steve Randall
REP

The City of Vancouver has approved two new desperately needed rental housing developments.

The approval of the rezoning of two 100% rental buildings Tuesday comes at a time when the city’s rental vacancies are below 1%, pressuring rents and creating extra challenges for those renters trying to save for homeownership.

The new buildings – on Main Street and West King Edward Avenue – will add a combined 88 units to the rental market, adding to the 181 already approved this year.

“Over the last year, we’ve approved more than 3,000 new homes—rental, social, and supportive housing—for people who live and work in our city,” said Mayor Gregor Robertson. “We’re working hard to deliver more affordable homes for local residents by introducing Canada’s first Empty Homes Tax, implementing new regulations on short-term rentals, and providing temporary modular housing for our most vulnerable residents. Our housing agency VAHA is building more below-market housing than any other developer in Vancouver.”

The Mayor said that no other Canadian city is doing more to tackle the affordable housing issue than Vancouver.

Copyright © 2018 Key Media Pty Ltd

New condos on former Mount Pleasant coffee shop site now up for pre-sale

Stephanie Ip
The Vancouver Sun

Condos that will soon sit on the Mount Pleasant lot where Bean Around The World used to be are now for sale — which you can afford if you give up about 200,000 lattes or have $800,000 kicking around.

The development at Main Street and East 20th Avenue in Vancouver’s Mount Pleasant — named Main & Twentieth — is being marketed to pre-registered prospective buyers, and a quick glance at the floor plans and their prices is enough to make most people do a spit take.

Previously, the lot was home to Bean Around The World, where it had operated for the last 16 years. The coffee shop closed last summer to make way for Landa Global to begin construction on the development, after it had purchased the land for about $11.4 million back in 2015.

Suites range from one-bedrooms to two-bedroom and flex suites, with some laid out in a split-level loft style, and they won’t come cheap. According to a recent survey, there were no new condos available in 2017 in Vancouver for under $500,000.

But if you had double that amount, you might be able to move into one of 42 homes being constructed at 209 East 20th Ave., where residential suites will sit atop commercial units at street level.

A one-bedroom loft measuring between 620 and 647 square feet, with just under 300 sq. ft. of outdoor space, begins at $799,900. Meanwhile, two-bedroom suites measuring between 713 and 942 sq. ft., with anywhere from 64 to 658 sq. ft. of outdoor space, start at $945,900.

Let’s take a look at some of the floor plans for available suites, shall we?

Unit 210 is a two-bedroom and flex-space suite which also has two bathrooms spread over 747 sq. ft. of indoor space, with 67 sq. ft. of outdoor space. This suite will cost you $968,900.

Floor plans for Main & Twentieth courtesy of Landa Global Properties.

Unit 201 is a two-bedroom and flex-space suite with two bathrooms spread over 769 sq. ft. of indoor space, with 114 sq. ft. of outdoor space. This suite will cost you $1.01 million.

Floor plans for Main & Twentieth courtesy of Landa Global Properties.

Unit 212 is a two-bedroom and flex-space suite which also has two bathrooms spread over 804 sq. ft. of indoor space, with 243 sq. ft. of outdoor space. This suite will cost you $1.1 million.

Floor plans for Main & Twentieth courtesy of Landa Global Properties.

Unit PH7 is a two-bedroom and flex-space suite which also has two bathrooms spread over 757 sq. ft. of indoor space, with 69 sq. ft. of outdoor space. This suite will cost you $1.02 million.

Floor plans for Main & Twentieth courtesy of Landa Global Properties.

There will be 42 suites in total, set around an open-air courtyard that allows for windows on both sides of each suite.

The expected completion date of the project is winter 2019.

© 2018 Postmedia Network Inc.

Musqueam development will double population of University Endowment Lands

Susan Lazaruk
The Vancouver Sun

Massive development by the Musqueam First Nation near the University of B.C. will almost double the population of the University Endowment Lands, and the province is developing the area’s neighbourhood plan to prepare for the influx of new residents.

And the endowment lands’ administration and some residents say this could be the start of densification of the land called Area D, which an elected council member predicts will transform the village into another concrete-and-glass neighbourhood like Yaletown.

A reconciliation deal returned 22 acres of a forested area of the endowment lands to the band, and the Musqueam were granted a zoning exemption from the four-storey building limit. That allowed the band to build residential towers as high as 18 storeys, and Mojan Nozari, a member of the Community Advisory Council for Area D, said she fears that’ll also change University Hill, where she’s lived since 2001.

“I believe it opens the gate for other owners to build higher-density developments,” she said. “It’s going to become a city, it’s not going to be a university village anymore. There is no way we can escape it.”

The province is calling for urban-planning or architecture firms to bid for a proposal to help develop Area D, bounded by University Boulevard, Acadia, Agronomy and Toronto roads and Wesbrook Mall, and home to almost three-quarters of the endowment lands’ 3,000 residents. Most live in multi-family units, including rentals.

The Musqueam’s planned 10-year development, which will add 1.2 million square feet of residential and 30,000 sq. ft. of commercial space, is expected to grow the endowment lands’ population by another 2,500 residents. The endowment lands are an unincorporated community, meaning it has no municipal council, and is directly governed by the province through the Municipal Affairs and Housing Ministry.

The ministry is appealing to professional planners for help in developing a neighbourhood plan to “guide future development, revitalize the sense of community and improve the sense of community,” and transit, ministry staff said in an email. It gives endowment lands’ residents input to “provide guidance for future development proposals.” The ministry’s call for proposals says the winning bid will help “review the structure of land-use regulation” and “identify regulatory options” for redevelopment proposals.

The endowment lands’ administration office didn’t return a request for comment.

But the latest endowment lands’ community newsletter called University Hill Connections, said the endowment lands “can also expect pressure to redevelop other portions of the multi-family neighbourhood (Area D) in the near future.” It said it also means residents can expect a rise in their taxes, now about 20- to 30-per-cent lower than Vancouver’s.

The newsletter says rising real-estate prices and speculation, Area D’s aging infrastructure and the Musqueam redevelopment, as well as a push for increased density across Metro Vancouver, are putting development pressures on Area D.

The advisory council approved the province’s call for proposals to develop a neighbourhood plan for Area D, said Justin LeBlanc, also an elected member of the advisory council for Area D. He said he supports the Musqueam’s right to develop their land as they choose to.

Residents will have a say on the future development of Area D and that doesn’t necessarily mean highrises, he said. “I’m not sure if the Musqueam development opens the door to denser or more development. Right now we have set limits for density.”

He said he wouldn’t oppose increased density as long as it included plans for affordable housing and rental accommodations.

LeBlanc, a scientist who attended UBC but who no longer works on campus, rents a suite above the shops in the village, which he says are “80-per-cent fast-food.” He said he would like to see fewer restaurants that rely on single-use, disposal-serving dishes, better waste disposal and improved bike lanes addressed in the neighbourhood plan.

Other residents’ concerns noted in a questionnaire include the increased demolition of older homes to be replaced by those of a West Coast contemporary design, the number of vacant homes, overgrown hedges, camper vans parked in residential areas, garbage and noise. Respondents in areas A, B and C, which are mostly single-family dwellings, weren’t concerned about density.

But Nozari, who owns a townhouse next to the Musqueam development, said she doesn’t welcome skyscrapers and more neighbours.

“I moved here because I liked living in nature and in a low-density neighbourhood,” she said. “I have the horizon and I can easily see the trees.”

She said she foresees traffic jams, insufficient parking and the lack of transit for residents in the university’s off-hours.

“I’m planning to move,” said Nozari, who works in architectural design. “Why should I drive all the way to my job downtown when this neighbourhood is going to look like it does downtown? That’s not what UBC should be.”

© 2018 Postmedia Network Inc.

Hillside East noteworthy for its indoor-outdoor design

Mary Frances Hill
The Province

Concord Brentwood – Hillside East

What: A total of 900 units in two concrete buildings of 55 and 45 storeys each, set in Concord’s 26-acre parkside community in the emerging Brentwood town centre neighbourhood.

Where: 4880 & 4890 Lougheed Highway, Burnaby

Residence sizes and prices: Homes range from a 545- square-foot one-bedroom with balconies measuring between 158 and 276 square feet, from high $500,000s; two-bedroom from $750,000s; two-bedroom-and-den from $840,000s; two-bedroom-and-den and three-bedroom homes from the Sky Collection (floor 44 and up) start at $1.19 million

Developer and builder: Concord Pacific Developments Inc.

Sales centre address: 4750 Kingsway, Burnaby

Sales centre hours: 11:30 a.m. — 5:30 p.m., daily

When Olivia Lam and her team of designers at Liv Interiors were given a chance to design the interiors of homes with retractable doors — seamlessly opening up the living space to the outdoors — they knew it was an opportunity they couldn’t pass up.

The “convertible living balconies” at Hillside East, a two-tower addition to Burnaby’s huge Concord Brentwood project, are creating a buzz among visitors, Lam says, adding she wasn’t surprised at the positive response.

“We really love the fact that the project’s emphasis on indoor-outdoor living is getting noticed,” says the principal of Liv Interiors.

The capacity of the sliding retractable doors to open the home up to the balcony space “is a very attractive design feature, and one that we believe homeowners will really love and embrace.”

The transition from indoor to outdoor is seamless: The threshold floor level between the open-concept space and the balcony has been removed, allowing occupants to transition smoothly to enjoy fresh air.

This feature is not new to luxury homes, and furniture designers have responded to the demand for attractive furnishings and materials that can adapt to indoor and outdoor living.
“Gone are the days when outdoor furniture was big, bulky and relegated to the outdoors only,” says Lam. “Today’s more modern and more refined outdoor furniture can often be seen inside homes, offices and other interior public spaces.”

Lam says she’d advise Hillside East homeowners to bring decor often used indoors to the outside area, and vice versa.

 “When bringing the outside in, having greenery inside the home allows for a visual connection to the outdoors. Take some interior home elements outside … light fixtures, tableware and decorative accessories like trays and candles.”

Area rugs, furniture and decorative cushions in similar colours, pattern, style or form can harmonize the colour scheme, she adds.

“We also suggest homeowners keep the areas by the sliding doors as clear and uncluttered as possible. Eradicating visual barriers helps to open up the views and creates a better connection between indoor and outdoor spaces.”
Meantime, Lam and her team used large-format porcelain tiles in the kitchen and bathrooms of Hillside East. She prefers the material to the pricier marble, as porcelain is lightweight and resistant to scratches and extreme temperatures.

The Liv Interiors team also made custom closets fashioned in a millwork wood finish. “Instead of selecting a specific brand and having them design the closets for us, we design each closet in-house with full functionality mind.”

© 2018 Postmedia Network Inc.

Neil Sharma
REP

Vancouver is the most expensive real estate market in Canada, but it’s only the third-largest city. In light of the Globe and Mail’s explosive story linking the housing market to money laundering and the fentanyl trade, has Vancouver officially become Canada’s Wild West?

The Globe article revealed millions of dollars from the fentanyl trade was being washed in Vancouver real estate, and B.C.’s attorney general David Eby has promised a crackdown. According to Victoria-based Cheri Crause, a province-wide dragnet is being cast because of illicit activities that occurred in Vancouver. For example, the Office of the Superintendent of Real Estate is cracking down on shadow flipping and dual agency.

“It stems from Vancouver, yet it affects every realtor in B.C.,” said the Royal LePage Coast Capital Realty sales agent. “I don’t have a problem with the changes to dual agency, but they’re asking for recusal on so many things and it makes it so difficult when you deal in a smaller centre. All of the bad things that happen in Vancouver affect the whole province. We don’t see that kind of stuff in Victoria, but the rules will be changed and it will make our lives more difficult. Consumer choice will be taken away all because of what’s happening in Vancouver.”

Crause added that regulatory measures might be overkill because criminals—and others with nary a qualm about circumventing rules—will simply keep ignoring them, but those who play fair will have to abide even more rules.

“If the activity [washing dirty money in real estate] is widespread, it needs to be investigated because I don’t think it’s right, and I certainly think it gives a bad name to all of us,” she said. “What’s been going on in Vancouver affects all of the realtors in B.C., even though we don’t control it.

“If it’s criminal activity, criminals find ways around things anyway. In the meantime, they change the rules for people who are already following the rules. Changing the rules doesn’t stop people who don’t follow rules to begin with.”

McKay Wood, a mortgage broker with Verico Mortgage Pal in Vancouver dismisses the notion that nefarious activity alone is having substantial impact on the city’s exorbitant housing prices—he attributes that to supply and demand.

But he thinks there’s merit to a committee investigating the real estate sector because a few bad apples can render it untenable.

“By and large, it’s not the majority, it’s the few bad apples,” he said. “I’m all for playing above board and keeping everything legitimate. It keeps our industry safe and allows people who are diligent and have a moral compass like the majority of the industry to act fairly and play fairly.”

Copyright © 2018 Key Media Pty Ltd

Ephraim Vecina
REP

British Columbia’s attorney general said that he is deeply troubled by reports of money laundering and criminal activity in the real estate market.

David Eby has issued a statement saying the government is taking reports of money laundering through real estate very seriously.

The comments came after a recent news piece alleged that Chinese nationals connected to the fentanyl trade are using B.C. real estate to clean dirty drug money.

Eby assured he has already tasked former RCMP deputy commissioner Peter German with reviewing money laundering policies and practices at B.C. casinos.

Last month, German’s recommendations prompted the government to announce new rules for high rollers at casinos, including a requirement that anyone spending $10,000 or more within a 24-hour period prove the source of the funds.

Eby added that German will also look at whether money laundering has connections with any other sectors, including real estate or tax policy.

“Our government will work to determine the scope of this issue and what must be done to appropriately address it,” Eby said late last week, as quoted by The Canadian Press. “We will ensure our investigation into money laundering in B.C. casinos is informed by these disturbing revelations.”

Copyright © 2018 Key Media Pty Ltd