Archive for May, 2019

Realtors reeling as Vancouver real estate frenzy ends

Friday, May 31st, 2019

Sales for 2016 compared to 2019 down 75%

other

Trevor Street of Keller Williams Elite Realty in Coquitlam sold 91 homes in the first five months of 2016 at the height of the Metro Vancouver real estate frenzy. Street has made no sales so far in 2019.

Street is not alone.

A comparison between figures for first five months of 2016 and 2019 show sales volumes and numbers down by nearly three-quarters (75%) for the top 100 realtors of 2016.

For example, controversial realtor Sandra Li, initially with New Coast Realty and now with LeHomes Realty, sold 62 homes by end of May in 2016 fetching $94 million. This year, she has only had six sales not even totalling six million. This reflects a 90% percent drop in sales numbers and 93% drop in sales volume.

Layla Yang, a household name in Vancouver, has seen her sales count drop by 81% from 38 to 7 and sales volumes fall from $111 million to just $15 million.

Ken Cui, who belongs to the controversial agency NuStream Realty, saw his sales number plummet 62% from 62 to 23, and sales volumes down 79% from $105 million to $23 million.

Strata looks for guidance over federal election signs

Thursday, May 30th, 2019

Political signs must be allowed

Tony Gioventu
Times Colonist

Dear Tony:

With the federal election in the fall, our strata council, which manages more than 500 units, is discussing a plan to manage political signs and requests from candidates who want to address owners and residents.

During the last provincial election, our building hosted a successful candidates’ debate night. However, council advised owners that our rules only permitted residents to display a sign no larger than a sheet of paper in their windows. That resulted in a number of protests from residents and several complaints about everyone’s right to express their political beliefs.

Marjorie T.

Dear Marjorie:

A strata corporation cannot prohibit election signs during federal, provincial, or municipal elections that are displayed from a strata lot.

Section 228.1 of the Election Act permits a landlord, a person or a strata/condo corporation to limit the size of a sign by setting reasonable conditions. However, for a strata corporation to set conditions on a lot requires a duly ratified bylaw — by a 3Ú4 vote at a general meeting — registered in the Land Title Registry before it is enforceable.

There is a chronic misunderstanding about the purpose and the role of rules in strata corporations. Rules cannot be used in connection with the application or use of a strata lot. Their intent is use and enjoyment of common/limited common property and common amenities. For example, the hours of the pool, or use of parking and storage lockers that are designated as common property.

A strata corporation may prohibit signs, or restrict them in size or location on common property including common areas within a building. A rule is approved by council by majority vote at a council meeting, then must be ratified at the next general meeting by a majority vote to continue to be enforceable.

The strata must also inform owners and tenants of any new rules or bylaws as soon as feasible after they are passed or ratified. It is important for each strata corporation to consider the type of strata you live in, before you adopt new rules or bylaws. The limitations of a highrise building will vary greatly from a bareland strata where each strata lot is five acres. A sign no larger than a piece of letter paper is not reasonable as it cannot be seen. If it cannot be seen, it is not freedom of expression.

A reasonable limitation permitting election signs will discourage residents from attaching or posting a 4 x 8 sign on their balcony, where a sign that is up to one metre square can be easily displayed from a strata lot window and may be a reasonable solution for the duration of an election period.

Glacier Community Media © Copyright 2013-2019

Kira 116 one, two and three bedroom homes in a six-storey wood frame building at 750 Dogwood Street Coquitlam by Woodbridge Homes

Thursday, May 30th, 2019

Kira condos boast clean, modern interiors and proximity to public transit

Michael Bernard
The Province

Kira

What: 116 one-, two- and three-bedroom homes in a six-storey wood-frame building

Where: 750 Dogwood St., Coquitlam

Residence size: 531 sq. ft. to 1,108 sq. ft.

Developer: Woodbridge Homes

Sales centre: 104 – 552 Clark Rd., Coquitlam

Hours: noon — 5 p.m., Sat — Thurs

Telephone: 604-808-0886

The word “kira” denotes light in some Middle Eastern languages, which is why Woodbridge Homes selected it as a moniker for its 116-suite multi-family development in West Coquitlam. Everything from the massing of Kira’s two buildings joined in the middle by a glass atrium to the tall windows and high ceilings in the homes is designed to bring in as much light as possible, company principal James Howard said.

“We liked the name because it is short and easy to pronounce by any Canadian, new or old,” Howard said. He said that working with Ciccozzi Architecture, the developer was able to demonstrate its design vision for the two buildings to the city of Coquitlam: “The idea was to have more corners — and hence more light — out of the total building size.”

The atrium provides a grander entrance than would two separate buildings, he said, and serves as the home for several common amenities. It features a lounge leading to a garden patio, while the second level has the meditation and yoga room, a meeting room and fitness room, and the third level has a rooftop deck.

Howard describes Kira as an “A-class site” for its proximity to the Evergreen Line, which opened in 2016 and has served as a catalyst for development along both sides of the SkyTrain line. Kira is located just a five-minute walk from the Burquitlam station.

Kira’s brick exterior is reminiscent of New York’s brownstones, while inside, Woodbridge has ensured the spaces will work for the modern-day family by allowing sufficient storage through pantries, linen closets and counter space in the bathrooms.

Portico Design Group has provided two neutral colour palettes in the open-concept floor plans. Laminate flooring is standard in the dining and living areas, while the bedrooms have carpeting.

The kitchen is equipped with a KitchenAid 30-inch five-burner gas cooktop with a convection wall oven, Fisher and Paykel refrigerator, itchenAid dishwasher and a 30-inch slide-out hood fan. Bathrooms have a polished white quartz countertop, porcelain tile floor and wall in the ensuite, frameless glass shower stall in the ensuite, a relaxing bathtub with back rest and glass partition (or curtain rod), rain showerhead in the master ensuite and open shelving beneath the master ensuite vanity mirror.

The outdoor area courtyard has both a community garden and a children’s play area. The lounge has ample seating with a large TV screen and a kitchenette for serving residents’ parties. There is a cosy fireside reading room. All homes will come equipped with an HRV energy-efficient heating system and boat the Woodbridge SoundGuard system, which reduces sound transfer between floors.

There are electric vehicle parking spaces with built-in or prewired spaces to accommodate future electric vehicles, and every home comes with a secure bike locker.

 © 2019 Postmedia Network Inc.

Only the 1% can afford a house in Vancouver today

Thursday, May 30th, 2019

Vancouver housing is now so expensive that only households with incomes in the top 1 percent can afford a detached home in the city

Josh Sherman
Livabl

Vancouver housing is now so expensive that only households with incomes in the top 1 percent can afford a detached home in the city.

So suggests a new study by RateSupermarket.ca.

According to the study, a household needs to earn $240,000 annually just to afford a benchmark, or typical, detached house in the city.

And that’s after the housing correction has shaved about $140,000 off the benchmark detached home price in 12 months.

In April, the benchmark price of a detached house was about $1.4 million, so you can imagine how strained affordability was before prices collapsed.

RateSupermarket makes a number of assumptions to come to its conclusions.

The rate-comparison site assumes debts of $10,000, a $300 monthly payment for a car lease, an amortization period of 25 years and a five-year fixed-rate mortgage with an interest rate of 3.25 percent.

“From there, we plugged in Gross Household Income in $10,000 increments until we could afford the benchmark house price in each city,” reads a RateSupermarket blog post detailing the findings.

In Canada, the 99th percentile — so, the top 1 percent — of household incomes is $200,000 and up, according to the 2016 Canadian Census.

The study, which RateSupermarket acknowledges is just a “rough guide,” suggests that Vancouver houses are out of reach for all but the highest earners in the country — but what about condos?

Well, prospects are much brighter.

At a benchmark price of $656,900, condos are affordable for the 25th percentile of earners, meaning a considerably more modest income of $45,000 is enough.

That’s actually below the average Canadian individual income of $46,700, according to Statistics Canada.

And if current price trends continue, Vancouver area condos are only going to get more affordable.

The benchmark condo price in April was flat compared to March and down 6.9 percent from a year before, according to the Real Estate Board of Greater Vancouver.

That should be welcome news for homebuyers, at least.

© 2019 BuzzBuzzHome Corp.

LandlordBC on Burnaby’s rental policy: ‘The numbers just aren’t going to work’

Thursday, May 30th, 2019

Burnaby’s new rental policies have been met with mixed reviews

Kelvin Gawley
Western Investor

A bold set of policies aims to protect and create rental housing in Burnaby. | Jennifer Gauthie

Burnaby’s new rental policies have been met with mixed reviews – enthusiastic approval from councillors, muted praise from a housing activist and disappointment from a landlord advocate.

On Monday, city council unanimously approved a plan to put new rental zoning powers to work.

The strategy includes rezoning existing rental apartments to protect them from development; requiring developers to replace demolished apartments and rehouse displaced tenants; and demanding that one in five units in new developments be purpose-built rental. 

“This is a very bold step in addressing the rental housing crisis,” Coun. Pietro Calendino said at Monday’s council meeting.

The sentiment was echoed by Calendino’s council colleagues, including Coun. Joe Keithley who said the move affirmed “that housing is a right and not a privilege.”

Landlord advocate sees problems

But not everyone was equally impressed. 

“I think there’s really quite a few problems here,” said David Hutniak, CEO of LandlordBC.

The landlord advocate said he likes a provision in Burnaby’s rental-zoning plan allowing rental zoning additions to commercial and mixed-use developments and he supports a robust tenant relocation policy.

But, Hutniak said, the plan will not lead to the creation of new rental housing. 

“The numbers just aren’t going to work,” he said. “You start out with what looks like, on the surface, some sort of a progressive policy – but if it’s structured on such a basis that the economics just don’t work, that means that nothing is going to to get built.”

He said using “inclusionary zoning” to require 20 per cent rental housing in new buildings will do little to recoup the hundreds of rental apartments destroyed by developers in Burnaby in recent years. 

“To get a couple thousand rental units – which is just a drop in the bucket for what Burnaby needs – that means we need to build 10,000 condo units,” Hutniak said.

Burnaby would do better to follow Vancouver’s lead by offering incentives to developers to build 100-per-cent rental developments, he said.   

Mayor inherrited sinking ship: activist

Murray Martin, a spokesperson for Burnaby ACORN who led many demoviction protests and now sits on the city’s housing task force, offered faint support for the city’s rental zoning plan. 

“This would have been a good start if they did this in 2011,” he said.

Mayor Mike Hurley inherited a housing crisis that can largely be blamed on his predecessor, Derek Corrigan, according to Martin. The activist said the former mayor deserves little credit, despite initiating the creation of rental zoning bylaws months before the 2018 election.

“Corrigan was on the Titanic. He hit the iceberg and he jumped overboard on a lifeboat and took off and told (Hurley), ‘Hey you might want to consider these plans.’ And Hurley is at the helm of the Titanic and he’s just trying to seal the leak,” Martin said, referring to the city’s stock of rental housing being lost to demovictions. “So who knows when they’re going to get to New York.” 

Martin brushed aside Hutniak’s assertion that the inclusionary zoning provisions would make building new rental housing untenable for developers. 

“This is what businesses always say when there’s any conditions put on them,” he said. “It’s their job to maximize their profits, so anything that impinges on profit-making, they’re going to yell and scream. And then the case is, 90 times out of 100, is that they were hysterical for no reason.”

Copyright © Western Investor

Principal Residence + Short-Term Rentals + Resale = Capital Gains Tax

Thursday, May 30th, 2019

Renting your principle residence is subject to capital gains tax

Kara Kuryllowicz
REW

Vancouver empty nesters Steve and Barbara’s beloved 3,500 square foot heritage home with spectacular ocean views is now leased four to six months a year while they assess life in a 700 sq. ft. luxury downtown condo.

In Toronto, Jody rents her Cabbagetown house to neighbours tackling extensive renovations as well as professionals working short-term contracts. The two- to six-month rentals cover her mortgage and operating costs, such as insurance, property tax and utilities and she enjoys summers at the cottage.

Like so many homeowners that rent through AirBnB and comparable websites, Steve, Barbara and Jody consider them their principal residences because they live there more than they live in any other location.

Most Canadians know they’ll pay capital gains tax to the Canada Revenue Agency when they sell an asset, such as their home, or investment for more than they paid. They also know and appreciate the fact their principal residence is exempt.

However not every homeowner that rents part-time realizes their homes’ principal residence status could change because it’s being used differently and that 50% of the gain may be taxable as part of their regular income.

“My financially-savvy clients diligently report all rental income and related expenses to CRA and I’m surprised at how many don’t realize those rentals could result in a significant capital gains hit when they sell,” says Alex Leventis, a Toronto-based accountant. “Before you rent your principal residence talk to your accountant to find out if it will affect your principal residence and capital gains tax situation.”

If you paid $200,000 for your principal residence house in 1993 and sell it for $1.4 million in 2019, you won’t pay a penny in tax. However, if you rented it for six months in 2015 and 2016, 50% of the 2015 and 2016 gain may be taxable as part of your personal income in each calendar year.

“Understandably, my clients want to know what they might pay if they rent occasionally before they sell a principal residence, but I can’t accurately predict how much a home will appreciate, whether their personal income will stay the same and most importantly, how CRA will determine the effect on their  principal residence status,” says Leventis.

Fortunately, accountants can tell homeowners that the CRA says a house, cottage, condominium, an apartment in an apartment building or duplex, a trailer, mobile home, or houseboat, must meet every one of these conditions to qualify as a principal residence:

  1. You bought the space to live in it
  2. You own the property alone or with another person
  3. You, your current or former spouse or common-law partner or children live in it at some point during the year
  4. You designate the property as your principal residence

Both Steve and Barbara, and Jody’s homes would still be considered their principal residences based on the criteria above. Yet CRA notes the principal residence status may change if all or part of the home is used for rental or business purposes.

“When you’re ready to sell your principal residence, the CRA’s perspective on its status is the only one that matters and they assess each situation individually – it’s incredibly complex and subject to interpretation,” says Leventis.

Even if homeowners rent their principal residences, the status will not change if they comply with these three points:  

  1. Your rental or business use of the property is relatively small in relation to its use as your principal residence;
  2. You do not make any structural changes to the property to make it more suitable for rental or business purposes
  3. You do not deduct any capital cost allowance on the part used for rental or business purposes

“You can ask the CRA what would be considered ‘relatively small’ or what type of structural change would be an issue, but good luck getting a straight answer – believe me I tried,” said one homeowner. “My accountant tells me there are many many shades of grey.”

Fortunately, homeowners who rent their principal residences because they had to relocate for work can maintain their homes’ status under certain conditions. For example, if the new workplace is at least 40 km farther from your temporary home than your principal residence, the principal residence status shouldn’t be affected. 

“It’s never black or white, but homeowners that rent their principal residences need to get as much clarity as possible from their accountants because the long-term financial impact could be significant,” says Leventis.

Let’s just say that Steve, Barbara and Jody are meeting with their respective accounts next month.

© 2019 REW. A Division of Glacier Media.

6 Apps that make home buying a smooth and convenient experience

Thursday, May 30th, 2019

The most useful apps and tools out there for prospective home buyers

REW

So you’re ready to buy a new home. But as everyone knows, it’s not a simple process. There are a lot of moving pieces, including staying on top of your finances and finding the right kind of home and neighbourhood for you and/or your family.

What are the most useful apps and tools out there for prospective home buyers? Let’s take a look!

First off, preparing to invest in real-estate and actually making the plunge is becoming a largely online experience. The following tools aim to make real estate investing a smooth financial experience as well:

1.      Mint

Mint is perfect for Canadians who need to carefully track and manage their finances. It especially useful leading up to the period when you are ready to start looking for a home, as it helps you save for a real estate investment. The app allows you to track all of your bills—whether they be for rent, credit cards, utilities or subscriptions. Mint sends bill reminders and alerts users when funds are low. While this can be useful in everyday life and the pre-investment saving period, it’s also great during the house hunting and buying process, when extra expenditures like renovations and real estate agent commission projections get thrown into the mix.

1.      Mortgage Calculator

You’ve finally found the perfect home. But is it a feasible purchase/investment in terms of your long-term budget? A Canadian mortgage calculator can help you calculate the payments you will have to make monthly, and what your annual costs will look like. The app calculates the payments based on the price of your dream home and current interest rates.

2.      Splitwise

A great app for those going in on a home with another person is Splitwise. Splitwise tracks what you  and your partner/partners are paying for and keeps a running total over a span of time. That way you can pay each other back in single large payments instead of a slew of tiny ones. You will all receive monthly pay-back totals through email notifications. It’s also a great way to track where every dollar you spend is going, helping you keep tabs on your spending habits and pinpoint where you need to save leading up to a property purchase.

3.      Tiny Scanner

The Tiny Scanner app allows you to manage your documents in a convenient and efficient way by scanning documents using your smart android device. Real estate and financial documents like Notice of Assessments, bank statements, property taxes and rental agreements can all be captured by and stored in your phone. Tiny Scanner will scan everything as either PDFs or JPEGS

4.      PRO Landscape Home and Magic Plan

Home buyers might try to decide between buying a condominium or buying a single-family home. With a condominium, the investor has the exclusive right to the interior space of the unit, and can design the interior any way they like. But they do not have rights to alter the land, walls, fences etc. of the property. With a single-family home, the investor has the right to design both the interior and exterior of the property.

These two design visualization apps can help with both condo hunting and single-family home hunting:

If you find a nice spot of real estate but are not sure if you visualize yourself living there due to a lacklustre front and backyard, PRO Landscape Home might just be the app for you. The PRO Landscape Home app allows you to visualize what your future yard could look like with some touch-ups. Just take a photo and add landscaping features to help you see the property’s full potential.  

Home buyers can use Magic Plan in partnership with PRO Landscape Home, or alone when looking at a condo’s potential. You simply use the app to scan the area, and then get to experimenting. The app is used to both create and edit floor plans, as well as to view the space in 3D—users can add furniture to the floor plan or plan DIY home renovation projects as they check out the condo.

5.      REW’s Lifestyle Focused Home Buying Search Tool

investing in a new home also means investing in a new community. REW’s Lifestyle Focused Home Buying Search Tool lets you learn all about the neighbourhood you will potentially live in by filling you in on the attributes and transportation options of the location. It maps out the amenities that matter to potential home buyers just as much as location, cost and the inner layout of the home. REW website users can click to select transportation and conveniences in the neighbourhood of their potential new home—this may include bus routes, schools, parks or grocery stores.

© 2019 REW. A Division of Glacier Media.

Metro renters pummelled by demovictions and gentrification

Thursday, May 30th, 2019

We’re told rental is the future

Douglas Todd
The Vancouver Sun

Semi-retired UBC geographer David Ley in Kerrisdale, where purpose-built rental units, small stores and co-ops in his neighbourhood are being demolished to build expensive condominiums. Jason Payne / PNG

Construction workers walk by a building under construction on West Boulevard. Many purpose-built rental units in the Kerrisdale neighbourhood are being demolished in order to build expensive condominiums. Jason Payne / PNG

Morgan and Jeany Kroon are facing possible demoviction in the 6300 block of East Boulevard in Vancouver. Francis Georgian / PNG

A few years ago, one of the daughters of University of B.C. geographer David Ley, with her husband and child, rented a one-bedroom apartment along the Kerrisdale section of the Arbutus Greenway.

The suite was large by the increasingly shrinking standards of Vancouver. And the rent was reasonable, at $1,100 a month. But now the modest, pleasant-looking purpose-built apartment building on the Arbutus Greenway is under threat. So are hundreds of similar units in rental, co-op and older condo buildings along this corridor.

Change is coming. Developers are moving in, tearing down 1960s, wood-frame walk-up buildings. They’re often replacing them with flashy multi-million-dollar luxury condos. City of Vancouver development-application permit signs are popping up like oversized weeds, suggesting more gentrification will come, ousting renters and others who are in decent housing arrangements.

While Ley’s daughter and family have moved, the veteran urban development specialist worries hundreds of tenants in relatively affordable, relatively roomy accommodation in the four-storey apartment blocks along this strip of Arbutus Greenway will soon be displaced and have few low-cost places to go.

“The problem in Metro Vancouver is that affordable rental is being replaced by expensive condos. It’s the history of gentrification,” Ley said during a recent tour of the stretch of low-rise buildings along East and West Boulevards between 41st and 49th Avenues, an area that is rife with construction and blanked-out windows.

Ley, who has lived in Kerrisdale for decades, appreciates the newly opened Arbutus Greenway, which is bringing in a fresh stream of pedestrians and cyclists. The Greenway is soon to be further adorned with elaborate landscaping, gardens, washrooms and other amenities.

But the Arbutus Greenway also illustrates how taxpayer-funded improvements can gentrify neighbourhoods, Ley said. New amenities draw high-end real-estate developers, who tear down affordable retail outlets and rental and co-op housing and typically erect costlier condos with the aid of artsy marketing slogans.

“This is happening all over the city,” Ley said.

Although the process of gentrification is “really concentrated and happening quickly” in this stretch of fairly pricey Kerrisdale, it has for years also been hitting low-cost rental units elsewhere — especially in Burnaby and Coquitlam.

Here’s a sign of the times: A luxury condo complex facing the Arbutus Greenway in Kerrisdale, at 47th and West Boulevard, has replaced an affordable equity co-operative building. The new 40-unit condo complex, called The McKinnon, recently posted a sign marketing what it said was its last unit.

Asking price: $2.349 million.

Kerrisdale renters Morgan and Jeany Kroon reacted in stark amazement at the condo price tags advertised just across from them on the Arbutus Greenway.

“It seems crazy. Who’s going to be able to pay that?” said Morgan. He and his wife, who both have jobs, rent a 500-square-foot apartment on East Boulevard for $1,300 a month.

They’ve been renting for two years in their wood-frame building, which, along with three others adjacent to it, are now fronted with development application signs. One sign promises a stylish new 45-unit complex.

Many of the units in the buildings on this block were vacant before the city of Vancouver brought in its empty homes tax. But two years ago, Jeany discovered on a Chinese-language website that the developer was renting them.  

Earlier this year, the Kroons thought they were going to be forced to move, along with other renters. But in the fast-changing real-estate market, where prices are now falling, the owners recently told the Kroons they could stay and rent for one more year.

Who knows what might happen next for the Kroons and the tenants in similar situations? They know the condos popping up along the Arbutus Greenway, which generally range between $1 million and $2 million, are not an option for them.

‘We’re told rental is the future’

Such uncertainty goes on across Metro Vancouver, which continues to have some of the most expensive housing in the world, even if prices might have peaked last year. Grand condo complexes, both towers and low-rises, are being erected across the region, often marketed to offshore investors.

The ratio of median housing prices to median wages in Metro Vancouver is a crushing 12 to one. Toronto is eight to one; Seattle is five to one. Four to one is considered “affordable.”

Given the chasm between local wages and housing prices, many politicians and others have said residents will have to get used to renting — if they want to live and work in a city that happens to have become highly attractive to the global rich.

“We’re told rental is the future,” Ley said, as he points to another series of 1960s-built residential buildings on East Boulevard that are in a state of flux. “But you wonder how long this block will last. It’s like dominoes falling.”

This eight-block Kerrisdale corridor on the west side of Vancouver — where luxury condo complexes have already been completed, are under construction or are in the planning stages — is full bore into a transition that has already led to the evictions of thousands of renters in other parts of the city.

Craig Jones is a University of B.C. geography PhD candidate who also teaches community data science at SFU’s City Program. He said more than 2,000 apartment units, most of them rentals, have been demolished since 2008 in the city of Vancouver; with almost 1,300 of those demolitions happening in 2017 and 2018.

The same thing has been happening at arguably a greater pace in Burnaby, especially in the large hub of low-rise rental buildings that once surrounded Metrotown.

Longtime Burnaby mayor Derek Corrigan was turfed in the fall election because he was seen as doing little to stop hundreds of affordable old rental units being torn down and replaced with costly condos, especially in towers, many of which were pre-sold in Asia.

Almost 1,000 rental units have been demolished in Burnaby since 2012, mostly in the Metrotown region, Jones said. And another 300 units are set to be torn down in the city in the next year or two.

“We’re talking about displacement of some of the most disadvantaged people.”

© 2019 Postmedia Network Inc.

Stress test responsible for $8b decline in low-rise construction in 2019

Thursday, May 30th, 2019

B-20 responsible for low-rise construction down-turn

Neil Sharma
REP

According to a study commissioned by Mortgage Professionals Canada, B-20 will be responsible for $8 billion worth of low-rise construction not occurring by year’s end.

The study, authored by Will Dunning, a respected housing economist, there was an 8% drop in new home construction investment through Q1-2019 compared to the first quarters of 2015 through 2017. While the condo sector has been on fire since B-20 was introduced in January 2018, the low-rise sector has taken a massive hit—down 25% through the first quarter of this year.

The report noted that investment in the condo sector will start falling by the end of 2019, but by 2021 the industry as a whole will feel the brunt because current construction is for the pre-B-20 sales cycle.  Dunning’s report said all residential construction, including renovations, could result in between $20-25 billion in lost investment and up to 200,000 jobs lost.

“The jobs impact that have occurred so far might just be one-tenth of the eventual total,” said the report. “The economic adjustments have barely begun, and they will take a long time to play out.”

The president and CEO of the Residential Construction Council of Ontario isn’t surprised by the report. He says that there was an 83% drop in sales last year and added that there are about 100 projects tied up at the Local Planning Appeal Tribunal.

“It typically bites faster with low-rise than with high-rise,” said Richard Lyall. “This drop in sales will translate through a drop in starts and that’s what we’re experiencing. It’s probably going to get worse.”

There are other factors that are putting housing beyond reach, as well. Citing a Building Industry and Land Development Association report on development charges, Lyall noted that, unfortunately, the cost is always passed onto consumers. “There’s going to be a lot of construction layoffs coming as a result of this, and the ironic thing is in the Toronto area, according to the demographics we’re already under-producing the housing that we need,” he said. “There’s the stress test but there’s also the charges, fees, levies, HST, etc. Charges and fees are going up, and for the average house, a new home buyer is paying $240,000, while for a condo it’s $160,000. This is all affecting new supply because the consumer is ultimately paying for all of this.”

Copyright © 2019 Key Media Pty Ltd

CRA identifies over $1b in tax evasion since 2015

Thursday, May 30th, 2019

The Canada Revenue Agency has identified over a $1 billion in unpaid gross taxes in the real estate

Neil Sharma
Mortgage Broker News

The Canada Revenue Agency has identified over a $1 billion in unpaid gross taxes in the real estate sector since 2015 and has doled out over $100 million in penalties.

“Last year, the CRA assessed $171m more in additional gross taxes related to real estate than in the year prior, a 65% increase,” read a news release. “Penalties also totaled over $57m, which is more than double compared to the year prior.”

The federal budget included more money for the CRA to enforce compliance. The agency will receive $50m over five years and $10m ongoing to create the Real Estate Task Force, which will begin its focus on the Greater Toronto and Vancouver areas. The hope is that it will deter non-compliance in Canada’s two most expensive real estate markets.

The move has been welcomed by the Toronto Real Estate Board, which noted that while Toronto and Vancouver could be problem areas, tax evasion is a nation-wide problem.
“The Canada Revenue Agency should be enforcing the law not just in the Greater Toronto Area and Vancouver, but across the country in all markets,” said Von Palmer, TREB’s chief government and communications officer. “Taxpayers should be complying with the law and report all sales of their principal residence on their tax returns and any capital gain from property sales where the principal residence tax exemption doesn’t apply. This should not be viewed as a GTA or Ontario or British Columbia issue. There’s no excuse for tax non-compliance and hopefully these CRA audits will deter non-compliance.”

For the last few years, the CRA has been working closely with B.C. and Ontario to tackle tax evasion in real estate, and it’s resulted in information collection and exchange, as well as improved reporting—which the CRA credits with improved audits.

“The Government of Canada is committed to ensuring that Canadians benefit from a strong, stable housing sector,” The Honourable Diane Lebouthillier, Minister of National Revenue, said in a statement. “With Budget 2019’s proposed multi-year funding for the CRA’s work on the real estate sector, we will create a new Real Estate Tax Force and increase our efforts to combat non-compliance to better ensure tax rules in the real estate sector are followed by all Canadians.”

Copyright © 2019 Key Media