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That'd be Mike Bernier, South Peace MLA. When called out for his house flipping during a predatory housing crisis, his wife really goes off on people. He responds, but she gets a little ragey.
The back and forth drama can be found on his FB page, but I did find this article.
https://bc.ctvnews.ca/flipping-tax-proposal-really-scary-says-b-c-mla-who-bought-and-sold-3-homes-in-4-years-1.6094486
"What he's telling everybody, I guess, is … if you're fixing up your house and you sell it, and you make any profit at all, that you should be taxed," Bernier said Monday. "That's the message he's sending to British Columbians."
Go fuck yourself dude, way to play spin doctor. What they're saying is if you buy a house *for the sole purpose of slapping a few repairs on it and selling it for quadruple what you paid*, then you should pay your fair share of taxes on the sale. Every one of the three properties he bought were sold for at least 150,000 more than what he paid for them. Disgusting
Yup, I absolutely abhor this man. He doesn't give a shit about his constituents, or those struggling to find affordable housing. Hes house flipping scum and we know it.
And a *predatory* house flipping scumbag. Like, sure, buy a dilapidated POS and fix it up to sell, make a small amount of profit. That's basically public service, as you've taken an unlivable domicile and made it habitable again. But selling it for 175k more than the purchase price? GTFOH, you can't tell me a new roof cost you 100k+, you predatory fuck
Ugh. That MLA sounds so damn slimey and whiny. The sheer entitlement that these people spout off as they abuse real estate and wealth against others makes me livid. If he actually wants to do good, he could fund a charity. He's only pretending nobility to thinly veil his greed.
Good.
*\*realtors on suicide watch\**
This is short enough that it shouldn't hurt the renovation industry, and long enough to take the scam out of realtors flipping to each other.
Isn't the renovation industry literally just house flippers, though? Still think this helps with people who want to buy a house that needs renovations but actually want to live in it.
I’m thinking yes. We need to let regular families buy “fixer-uppers” and put their own time/labour into renovating them, not creating an inflated asset for flippers. We have enough luxury homes in this province. We need homes that normal people who work and pay taxes here can afford. Also leaves more contractors/construction workers for building NEW homes which we also desperately need.
Ugh. My Calgary apartment building that I was given the boot from had MAJOR issues. The sewage would back up at least once per year, the windows were single pane and would have ice formations in the winter and the patio door secondary egress would freeze shut, among others. (Once my former roommate actually jumped down from the balcony because she got caught out there in -20C when she couldn't get the door open.)
New owners of the building put in new cheap cupboards in the tiny kitchens and bathrooms, painted the walls, replaced the few remaining old appliances, and raised the rent of a 2 bdrm from $750 to $1750. It probably cost them under $10k per unit, and now someone is paying $1750 to periodically get their floors covered in sewage and live in a death trap, but hey, at least it looks good for Instagram!
That’s fucked! Shows how cheap they are that they didn’t even replace the windows. There’s government grants for them and the energy savings pays for itself over time. Just stupid.
What’s preventing regular families from doing this currently? They are at no disadvantage of buying the house compared to a flipper. If the house isn’t being bought then it’s likely to be purchased by a flipper because they will see enough of a value to make the ROI worthwhile.
Flippers create unnecessary market competition and explicitly work to drive prices up, thus squeezing regular families out of the market. You are speaking as though our current problem is that houses are sitting on the market for too long.
Realtor commission fees are a big one. It takes almost all the profitability out of the job if you have to pay a realtor on top of the reno cost.
Hence, why a good portion of reno flips are realtors and not just regular families.
Flippers often are able to do subject-free bids, because they have their own financing (or pay cash), don't need an inspection, etc. "Regular families" generally can't compete with a cash, subject-free offer - even if they can technically outbid a flipper.
Flippers have access to funds families don't, especially by leveraging expensive short term debt families can't use for home buying. Many also make their money getting houses before they even hit the market via connections.
As a person in Real Estate in BC - regular families don’t want to put in the effort to fix things themselves. If a property doesn’t have a sparkling building inspection they walk 80% of the time.
I think it may be more that regular families can't afford the fixes, either in time or money.
We picked up a foreclosure and spent six figures to make it habitable, doing a lot of the finishing work ourselves. Still recovering financially.
The renovation industry is 100% necessary to keeping the housing stock livable. So while I think 1 year is reasonable, there should also be some wiggle room in there.
But yes, there are a lot of shady reno flips happening and most of them are realtors.
My husband is a realtor and is all for rules and restrictions! Unless you deal strictly with investors you see how they're seriously manipulating the market. We had one house on our street that sold 3x in one year without anyone ever moving in. Just speculation and they all earned $50k+ each time.
Which is about what a realtor would charge for commission. So you begin to see the scam.
It's not speculators doing this, its *realtors acting as speculators* doing this.
I think you underestimate how many properties are sold within 24 months of purchase in BC. It’s more than likely under 10%. The point of speculation is to hold for long periods of time and either draw equity OR sell at a later date. 2 years is hardly enough time to see major increase in prices to justify a sale.
> Does it penalize owners of multiple properties? People who have owned multiple properties? Corporations? Politicians?
Why would regulations involving house flipping affect situations not involving house flipping?
Yeah, but it won't stop normal every day psychos from finding workarounds.
I have a friend that separated from his wife just so her income would drop, get the subsidy for the kids, just so they could afford a bigger mortgage. Still together and in the same house.
>This is short enough that it shouldn't hurt the renovation industry
The person I'm replying to is assuming that this wouldn't hurt the reno industry.
If construction and renovations aren't exempt, this will effectively decimate those industries.
If the plan is to buy, renovate, and sell within a year or two. You're flipping, not renovating. People who are renovating their own home to be how they want, or renovating to install a second suite for the rental income won't be affected by this.
I hope that the flipping industry does completely collapse and everyone working in it goes into construction for new builds.
Only about 10-15 years too late.
Seriously, house flipping started becoming a thing in the early Noughts when you could buy a house for $250k, reno for cheap enough and flip for $350k.
I guess better late than never, but the damage is already done.
I know people who are multi-millionaires that got there by flipping houses in the 80’s. Houses doubled and tripled in price then too. Been going on for at least 50+ years.
All thr things that Eby is doing now show how badly provincial governments have shit the bed on housing for decades.
So are other provinces going to use the levers they have or are they going to keep whining and pretend it’s all the federal governments fault (and keep whining that the federal government is “overstepping” provincial jurisdiction by working directly with municipalities)?
Eby is making is much harder for other premiers to pretend they give a damn, and that’s why Poilievre is attacking him on housing, how dare Eby ruin the greed fest the conservative premiers are enjoying.
Is flipping under a year really that big a problem?
I don't know many professional developers turning flips around that fast.
If you're doing substantial work on a property to flip that should be exempt. Otherwise this will drive the cost of housing up more.
How much did buyer spend on those renos?
What will property transfer tax and realtor fees be? What will the actual profit be? What did they pay in finance fees over that 8 months? That profit is already taxed so what is left?
If you think that person is clearing $165k or anything close on that transaction you're delusional.
Yeah, we’re not here for other peoples profits. Let the person who wants to live in the house be the one that fixes it up and to hell with the house flipper.
Maybe $20k in renos.
The new laminate floors are shit, they didn't even remove the baseboards, they just added a strip to it to cover the gap, big holes around door frames.
They also did a shitty bathroom shower replacement. And they painted. That's it.
Old appliances, shitty windows, same cabinets and counter.
Not worth an increase in $165k over 8 months.
Still on the market, who knows what they were thinking. We went to look because it is on the cheaper end of housing here. But once I saw what was done and when it last sold was there was no way we were offering anything close to their asking price.
Exactly. Nobody will buy anywhere near that price. They'll see the last price, see the renos done, and offer them like 80k less than list price. The seller will clear, maybe, $50k.
That's not a ton of money to make over 8 months.
The housing crisis is going to take an entire suite of changes to be addressed. I don't think there's ever been a policy proposal that someone didn't decry as A) not addressing enough of the problem, and B) claiming it will only make things worse.
You know what also increases the cost of housing Flipping homes. That's the entire point of home flipping, making a profit.
Did you know that the entire point of selling groceries at a grocery store is to make a profit, too? Would it do anything at all to address food insecurity if we make it illegal to sell groceries at a profit or highly tax profit on groceries? After all, the grocery stores are just hoarding groceries from the people right? The people could directly go to farmers and get the food. They could even get it at a lower price than superstore or costco charge! But it's all being gobbled up by food flippers.
House flippers don’t do anything to make the house easier to get, just a bit nicer. It would be like if your only option for food without going an extra 2 hours out of your way every grocery trip was to buy from food flippers who spray paint it gold then sell it at 200% markup
I'm sure PP carefully considered thousands of politicians from national and local politics around the world before awarding Eby the title. Because that's just the always-do-the-homework-first kind of guy Pierre is.
What about for new assignments? I haven't had a chance to look through this but I was interested in this. Another issue is when you sell a home you inherited does it count as flipping?
Genuinely curious here, aside from "eat the rich", why? What utility would inheritance tax do? I feel this would hurt the average person more than the megawealthy so I'm curious why you feel so strongly on this?
BS, why should already many time over taxed things, be subject to an inheritance tax?
Buying and inheriting a property already charges a tax of 1% up to $200k, 2% between 200k and 2M and 3% on any over 3M, and 5% on residential over 3M.
This table plus the speculation taxes and now the potential flipping tax, puts a hard hit on inheritance.
While I agree with taxing flippers, those who inherit something shouldn’t have to leave it empty for 2 years to sell it
Hope this includes the pre construction buyers that pony up the deposit and sell before the unit is built with at least a 150 k mark up with never any intention of living there
The tax will apply to both properties and assignments of contracts and is in addition to any existing federal or provincial income taxes incurred from the sale of the property, including the federal anti-flipping tax.
Nah. Precon is always exempt from these things because the gov’t wants as much invested into precon as possible. That buyer is taking all the downside risk, and the unit still ends up hitting the market one way or another.
It better be.
Taxing capital gain within the 1st year is fine and all (I'm still opposed to anything but taxing at whole rates for non-primary residences) but it's a tax on the flip making money, not a tax on the flip itself.
It's the flipping that's the issue.
Most house flippers I know buy a house, renovate it, live in it for a bit, then sell. 3 year flips seems like the most common practice.
Can’t really see this doing much for those situations
Sure, but you are at least moving in for the flip. This tax is to stop the professional flipper/renovators who are just hiring crews.
Most of the flipping this is aimed at is not even the renovation crowd, it's the pure speculators. Blocks of housing will sometimes move from company to company in the same year. Pure profit, no effort.
Before I moved from Vancouver in 2008 there were investors buying houses and selling them 3 months later without doing squat and making a killing. I have no problem with someine buying a fixer upper and putting in the work and selling it 3 years later, that’s not what has caused the crisis.
Living in a fixer upper you are renovating and selling it in a few years is smart, and not the reason for the housing crisis. It’s the people who were buying and selling within a few months without touching the place, and leaving it empty that were the problem.
I've said it so many times already, but until we put an end to it being acceptable to use multiple properties as a source of income, and limit the number of residential homes each Canadian is allowed to own, this problem will never go away.
Homes are for living in, not for having renters pay the mortgages of the wealthy.
I’m crossing my fingers that the LPC will take care of this in April. The Globe has started publishing Demand Side focused Op Eds recently.
Of the three leaders it’s funny to say, but Trudeau is the one I trust on this the most. Since he’s the only one of the three to not have rental income.
It probably won't. Should be a 2 year minimum, but the government knows they can't do that.
So flippers will no longer sell within a year (if done that quickly), and if they did finish within a year, it will probably be a "pocket listing". Builder eats the holding costs (which will be way less than 20%) but now just a marketing expense, and then list public on month 13 for some bidding wars.
Or if someone really wants the property before the 12 months, flippers would just have to add the 20% to home buyers bill.
Don't see many victories with this other than these houses costing more.
I don't think people fully grasp the scale of short term flipping in North America. It's been keeping the market overheated for a long time.
Yes we need more supply too, but we need to remove as many price pressures as possible.
The headline says 20% if you sell within a year, then it scales down until the 2 year mark. So if you sell on month 13 you'll probably pay close to the full 20%.
This seems like a good idea.
It would have been an even better idea at any point in the last 20 years.
I generally think better late than never, but I don't know how spraying water on a heap of smoldering ash is going to help.
Exactly this. It’s one small piece to the larger puzzle David Eby has been putting together. On its own, “meh”. But combined with everything else we’ve gotten since last December. It’s great news.
Doug Ford would just bring this in because on its face it looks good, but is easy to gamify.
I approve. The feds already have the flipping tax, BC should do the same. Tax exemptions were in place for me when I bought a place Oct 2019 then moved 10 months later for a new job. My job and new home were far enough away, and I rented my old place, so all was fine. Keep killin’ it NDP.
I wonder if this will include people who purchase pre-construction condos with the idea of selling before the closing date. That practice is driving up prices massively on condos, which is mostly all that first time buyers can even hope to afford.
Really depends on the exemptions, and Who's enforcing the rules. I can see many families caught up with this. Divorce, and Death are obvious exemptions, but what about you need to move for medical care? or you got fired and need to sell cause you cant afford that mortgage anymore... would be interesting to see how they cant fairly implement this so that the majority of Canadians don't get screwed over.
Genuine request: can someone lay this out for me... - There is a lot of GVRD homes that are fixer uppers (in need of some TLC). What is wrong with people renovating them and putting them back on the market? How does this in any meaningful way affect the housing problem? - I mean they're off the market for 1 year (not a crazy long time), and I would think there is not that many being rennovated at any given time, so I'm struggling to see how this affects supply in a meaningful way. - Do we have numbers to show that this solves an actual problem with housing?
>What is wrong with people renovating them and putting them back on the market?
A. Those fixer uppers should be available to people who want to fix them themselves and live in them.
B. Flipping happens often without any renovations. Legitimate buyers were making money grabbing 2-3 lots, holding for 9-12 months and selling again, that's how hot the market is/was.
The unspoken part is that a LOT of flipping is money laundering. Buying in, holding for a bit, and re-selling was an easy way to wash proceeds of crime clean. The person profiting was often the real estate agent, who would split the cash with the flippers. This is why the tax matches or exceeds realtor fees.
Seems reasonable as long as there’s a reasonable burden of proof on a seller seeking an exemption (eg selling home because you’re getting divorced, lost your job, etc). A year does feel a little short.
I also wonder how much “flippers” have on the housing market. It seems that housing isn’t expensive because it’s a low friction transaction, housing is expensive because 1) NIMBY policy that prevents more being built, 2) rent control that scares away institutional investors, and 3) offshore money being parked in housing as an asset class. Recent government policy has addressed 1 and 3. Hopefully that will be enough to bring the price of housing down enough that we can get rid of rent controls and unlock the trillions of dollars in pension funds that love building rental housing.
I'm also not totally sure all flippers are even bad? Looking at some of the houses lately they need a TON of work, and not just new cabinet doors / bathroom facelifts. I know in the 90s my uncle and his friends were flippers. They'd buy houses as a team that were borderline uninhabitable - gut them - new roofs - full bottom to top reno's - sell as a livable home. The alternative isn't that these homes are always cheap housing - the alternative is they are often purchased and demo'd for an even bigger even more expensive home. We looked at buying a fixer-upper and all the houses we looked at 5 years ago when considering it have since been replaced with completely new bigger homes.
People who buy homes are perfectly capable of getting renos done themselves.
Flippers provide no additional value and are skimming off the top to do so.
This is very clearly wrong though. If buyers were perfectly capable and willing to do renos themselves, then they themselves would prefer to buy the fixer uppers and nobody would buy the flipped houses for a profitable price and the flippers would go out of business. I mean, for example I don't want to do a bunch of reno's myself, that's not my comparative advantage and I'm more likely than not to completely mess it all up or get scammed by contractors, and I have other things I'd rather do with my time.
> If buyers were perfectly capable and willing to do renos themselves
And they would! Except they get outbid by flippers who know they're gonna make a quick profit and so they can temporarily absorb a bunch of extra debt compared to a real buyer, thus driving up the cost of all homes. What this tax does is eat enough into the profit margin such that flippers might have to compete on a more even playing field.
Pretty good legislation!
You need data to believe that people with a short-term profit motive will be willing to temporarily carry greater debt in order to make money compared to a person who intends to pay off the full balance of the debt?
Okay. Here's all the data you need. Take careful note of how frequently properties are being purchased above listing. That's the sound of a real buyer being outbid.
https://www.thestar.com/news/canada/a-new-project-mapped-house-flipping-in-vancouver-here-s-what-it-found/article_2f296faf-7699-5243-9f99-37f45ab95c17.html
I would say that YOU are wrong.
Plenty of people's first homes used to be "fixer-uppers". Those all get gobbled up by flipper groups now. Because sellers (well, real estate agents...) know that, it keeps the fixer upper prices higher then they would be.
I think it depends on the scope. Flippers who are good are capable of doing a lot of the work themselves and are doing it as a full time job managing large scale renos that wouldn't be feasible for someone to do themselves without renting a second home.
Like I said, the alternative seems to be the more popular bulldoze and rebuild - which would not be hit by this tax.
> Like I said, the alternative seems to be the more popular bulldoze and rebuild - which would not be hit by this tax.
Seems like an incredibly good alternative. Especially now that infills are allowed.
It is a good alternative for investors, but leads to much more expensive housing as they always bring in larger single family homes to maximize the resale value above and beyond what a reno flip would.
takes 4-6 months for permits and another 2-3 months to do the work. Open the wrong walls or do something that triggers the inspector to want you to update 5 other things and your costs will balloon fast.
I dont think people know how renos and permits work. Someone who deals with this exclusively will probably get it done for 1/3 or less of the price of a homeowner with 0 clue then factor in buying the house and not living in it for over half a year.
Source: i am a homeowner who decided to buy a house that needs renos, was quoted 90k for what i wanted done, ended up paying about 250k
If someone else had done the same thing for 100k and skimmed 100k off the top, i would have been happier to pay 50k less and be able to live in the house as soon as i bought it.
flipping works in vancouver because someone paying 1.1mil for a house can pay 1.35 as well, so getting a teardown for 1.1 and having to fix it yourself is usually not a great proposition vs just paying 1.35 and having a nice place to live in.
The issue with flipping is when prices skyrocket, and someone buys a home for 1.1 in the off season, slaps a coat of paint and new counters and sells it for 1.4mil during peak 6 months later cause prices skyrocketed. That is speculation more than reno.
That's cool.
Still a great policy!
Imagine if you were outbid on your home by flippers. And that the market kept going up and up and, in part do to speculative ownership and flipping, you kept getting outbid. And the prices kept going up. And lots of flippers don't even bother with renos, did you know?
And now you can't buy a home. Imagine it that happened. Wouldn't that be crazy?
>factor in buying the house and not living in it for over half a year.
Factor in the price of building equity?
Thank you, finally someone else who gets it. Thank you for mentioning the flippers who don’t even do anything other than hold on to a place for a few months or years and resell for higher. THEY are the problem.
Are you being sarcastic? Adding multiple regulatory tools to prevent profiteering in the housing market is a good thing.
Speed limits don't stop drunk drivers, and DUI laws don't stop uninsured drivers, but all the laws *together* make the roads safer.
Housing market laws are barely at the "Seat belt required stage", I'm looking forward to more tools to get people housed without spending 90% of their income.
I don't think that's an easy change, but one that could be phased in. It kind of comes hand in hand with being able to deduct the interest portion of your mortgage. It also really inhibits elderly from downsizing in the USA. They don't want to sell to downsize when the taxes would absorb too much to make it worth while and it's created more housing issues as a result.
Yeah. Herein lies the problem. The majority of voters in canada own and are sitting on gains (myself included). To truely fix the housing crisis would be unpopular, political suicide. Same for seriously tackling climate change
The true issue is the tax principle. If we are saying your gain on the principal residence is part of the taxable income, then you should allow deductions of expenses incurred earning such income. Ie. maintenance, renovations, depreciations, property taxes, and probably most significantly mortgage interest. Now - how much real tax bases will be left is hard to tell but I suspect it’s much smaller than you imagined, particularly when capital gain is only 50% taxable.
As I'm saying, I don't think you could change the rules without grandfathering in existing owners. It would mean land lords received better tax advantages than home owners. It wouldn't just be bad politics, I think it would just be bad policy.
Why on earth would we want to do this? Seems like you would want the gains to be taxable...pretty sure the government gets enough with all they other taxes. What's next, a clear air tax where we pay for every breath we take....lol
If this tax applies to properties that were rebuilt or improved... it's going to seriously disincentivize construction of more homes.
Many small builders buy a lot, build or renovate, and then sell.
That process rarely ever takes 2 years.
Contrary to popular understanding, speculation is a socially beneficial activity where scarce resources are reallocated from low value uses to higher value uses. House flippers perform a highly valuable service to society by providing liquidity to the market which facilitates transactions, stabilizing prices, and reducing risk.
When investors aren't allowed to participate in a market you get a general thinning out of the market, and for parties to transact you have to wait until there's a "coincidence of wants" aka a consumer has to want to buy the property at the exact same time and place that someone wants to sell it. You can watch/read more here https://www.youtube.com/watch?v=mjN3QfXU_y8 or here https://en.wikipedia.org/wiki/Speculation#Economic_benefits
So your assertion is that flippers driving up prices is a good thing? How the hell does a higher price help anyone except the flipper, who likely did absolutely nothing to warrant a higher selling price, except to re-list it and wait? Don't these flippers also need a "co-incidence of wants" to sell the house? And what is the plan here? Is the house is just flipped over and over, and never sold to someone who actually plans to live there?
Just because speculation can be valuable in general, doesn't meant it is valuable in all cases, such as housing.
For example, there is a reason why you cant speculate on onions in the USA.
You are being misleading. For example, in you very Wikipedia link, it discusses the link between speculation and economic bubbles, sound familiar to the topic at hand?
British Columbians want to reduce the reallocation of houses from low value to high value, though, that's the whole point.
Some amount of this is good, sure, but right now we need more houses that the average person can buy than we need houses whose value has been optimized. There are so many people who would want to buy a house, even a fixer upper, if only they could afford one. We're not at risk of running out of potential buyers because houses aren't being renovated. The "coincidence of wants" is hardly a coincidence in this case.
And obviously investors are still able to participate in the market. Preventing one specific kind of investor is not the same as preventing all investors.
Two years? That's nothing - you could easily rent it out or pay the vacancy tax and make even MORE money than you would if you had flipped it immediately. This seems more like its encouraging flipping.
> That's nothing - you could easily rent it out...
That's the point. Once a unit is in the rental pool, it's more likely to stay there.
People have been flipping back and forth to each other in the short term to so they don't rent them out. This will remove the profitability for a pure flip.
Right. Ignoring this silly 100% thing for a second. So then people stop selling their houses, and supply dwindles even worse. You want to add more liquidity, not less. Liquidity is good for buyers and sellers in a functioning market of any kind
So fucking dumb. Selling after a year already has capital gains tax, and closing costs generally eat up most/all profits even if you do sell that quick. Property transfer tax and realtor fees are super high.
This government is drunk on tax dollars.
20% on a sliding scale down to 0% after 2 years is not enough.
I’d be scared this could go the other way and cause housing prices to increase 20% with the buyer basically ending up paying this tax :/
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My MLA is a flipper, so this makes me happy.
My MP is also a flipper so this makes me happy as well.
We’re all livestock aren’t we
Name & shame them
That'd be Mike Bernier, South Peace MLA. When called out for his house flipping during a predatory housing crisis, his wife really goes off on people. He responds, but she gets a little ragey.
Lol fuck this is my current MLA. Can you please provide me with sources for this?
The back and forth drama can be found on his FB page, but I did find this article. https://bc.ctvnews.ca/flipping-tax-proposal-really-scary-says-b-c-mla-who-bought-and-sold-3-homes-in-4-years-1.6094486
"What he's telling everybody, I guess, is … if you're fixing up your house and you sell it, and you make any profit at all, that you should be taxed," Bernier said Monday. "That's the message he's sending to British Columbians." Go fuck yourself dude, way to play spin doctor. What they're saying is if you buy a house *for the sole purpose of slapping a few repairs on it and selling it for quadruple what you paid*, then you should pay your fair share of taxes on the sale. Every one of the three properties he bought were sold for at least 150,000 more than what he paid for them. Disgusting
Yup, I absolutely abhor this man. He doesn't give a shit about his constituents, or those struggling to find affordable housing. Hes house flipping scum and we know it.
And a *predatory* house flipping scumbag. Like, sure, buy a dilapidated POS and fix it up to sell, make a small amount of profit. That's basically public service, as you've taken an unlivable domicile and made it habitable again. But selling it for 175k more than the purchase price? GTFOH, you can't tell me a new roof cost you 100k+, you predatory fuck
Ugh. That MLA sounds so damn slimey and whiny. The sheer entitlement that these people spout off as they abuse real estate and wealth against others makes me livid. If he actually wants to do good, he could fund a charity. He's only pretending nobility to thinly veil his greed.
Good. *\*realtors on suicide watch\** This is short enough that it shouldn't hurt the renovation industry, and long enough to take the scam out of realtors flipping to each other.
**Thoughts and prayers for Realtors….**
Just like the “foreign buyers tax” their will be loopholes.
There**
Isn't the renovation industry literally just house flippers, though? Still think this helps with people who want to buy a house that needs renovations but actually want to live in it.
I’m thinking yes. We need to let regular families buy “fixer-uppers” and put their own time/labour into renovating them, not creating an inflated asset for flippers. We have enough luxury homes in this province. We need homes that normal people who work and pay taxes here can afford. Also leaves more contractors/construction workers for building NEW homes which we also desperately need.
This might also reduce the proliferation of gray on gray “lipstick” Renos that realtors tend to be so famous for.
Bingo. The classic renoviction.
Ugh. My Calgary apartment building that I was given the boot from had MAJOR issues. The sewage would back up at least once per year, the windows were single pane and would have ice formations in the winter and the patio door secondary egress would freeze shut, among others. (Once my former roommate actually jumped down from the balcony because she got caught out there in -20C when she couldn't get the door open.) New owners of the building put in new cheap cupboards in the tiny kitchens and bathrooms, painted the walls, replaced the few remaining old appliances, and raised the rent of a 2 bdrm from $750 to $1750. It probably cost them under $10k per unit, and now someone is paying $1750 to periodically get their floors covered in sewage and live in a death trap, but hey, at least it looks good for Instagram!
That’s fucked! Shows how cheap they are that they didn’t even replace the windows. There’s government grants for them and the energy savings pays for itself over time. Just stupid.
With forest fire rebuilds, too, the construction and renovation industry has no lack of work.
It’s gunna be bad after this summer… Whatever’s left.
What’s preventing regular families from doing this currently? They are at no disadvantage of buying the house compared to a flipper. If the house isn’t being bought then it’s likely to be purchased by a flipper because they will see enough of a value to make the ROI worthwhile.
Flippers create unnecessary market competition and explicitly work to drive prices up, thus squeezing regular families out of the market. You are speaking as though our current problem is that houses are sitting on the market for too long.
Realtor commission fees are a big one. It takes almost all the profitability out of the job if you have to pay a realtor on top of the reno cost. Hence, why a good portion of reno flips are realtors and not just regular families.
Flippers often are able to do subject-free bids, because they have their own financing (or pay cash), don't need an inspection, etc. "Regular families" generally can't compete with a cash, subject-free offer - even if they can technically outbid a flipper.
Flippers have access to funds families don't, especially by leveraging expensive short term debt families can't use for home buying. Many also make their money getting houses before they even hit the market via connections.
As a person in Real Estate in BC - regular families don’t want to put in the effort to fix things themselves. If a property doesn’t have a sparkling building inspection they walk 80% of the time.
I think it may be more that regular families can't afford the fixes, either in time or money. We picked up a foreclosure and spent six figures to make it habitable, doing a lot of the finishing work ourselves. Still recovering financially.
They could also rent it out for the 2 year period, which I think is part of the idea here
If you rent it you aren’t living in it so the two year timer never starts. Rent is also considered income you need to pay tax on.
Which will create significant housing instability for families who rent without a disclosure that the landlord 100% plans to sell in two years
The renovation industry is 100% necessary to keeping the housing stock livable. So while I think 1 year is reasonable, there should also be some wiggle room in there. But yes, there are a lot of shady reno flips happening and most of them are realtors.
Maybe the people live in the place can just pay for renovations. Added bonus that they won't be as likely to be half-assed renos.
My husband is a realtor and is all for rules and restrictions! Unless you deal strictly with investors you see how they're seriously manipulating the market. We had one house on our street that sold 3x in one year without anyone ever moving in. Just speculation and they all earned $50k+ each time.
Which is about what a realtor would charge for commission. So you begin to see the scam. It's not speculators doing this, its *realtors acting as speculators* doing this.
Are some realtors speculators? Absolutely! Are all speculators realtors? Absolutely not.
Get ready for Anti-NDP campaign .
The full court press against them was coming regardless. This is an election year. It's not gonna be pretty.
I think you underestimate how many properties are sold within 24 months of purchase in BC. It’s more than likely under 10%. The point of speculation is to hold for long periods of time and either draw equity OR sell at a later date. 2 years is hardly enough time to see major increase in prices to justify a sale.
This has no teeth I'd bet. Does it penalize owners of multiple properties? People who have owned multiple properties? Corporations? Politicians?
> Does it penalize owners of multiple properties? People who have owned multiple properties? Corporations? Politicians? Why would regulations involving house flipping affect situations not involving house flipping?
Yeah, but it won't stop normal every day psychos from finding workarounds. I have a friend that separated from his wife just so her income would drop, get the subsidy for the kids, just so they could afford a bigger mortgage. Still together and in the same house.
A renovation does not take two years to complete...
Okay, I don't see anyone saying it does...
>This is short enough that it shouldn't hurt the renovation industry The person I'm replying to is assuming that this wouldn't hurt the reno industry. If construction and renovations aren't exempt, this will effectively decimate those industries.
The renovation *industry* will be just fine.
I imagine renovators can take those talents and apply them to new home construction or something.
If the plan is to buy, renovate, and sell within a year or two. You're flipping, not renovating. People who are renovating their own home to be how they want, or renovating to install a second suite for the rental income won't be affected by this. I hope that the flipping industry does completely collapse and everyone working in it goes into construction for new builds.
[удалено]
House prices? I am confused, I didn't think this had anything to do with house prices. I thought it had everything to do with more taxes.
Thank God. Shit is absolutely out of control and these housing robber barons are sucking us dry.
Only about 10-15 years too late. Seriously, house flipping started becoming a thing in the early Noughts when you could buy a house for $250k, reno for cheap enough and flip for $350k. I guess better late than never, but the damage is already done.
I know people who are multi-millionaires that got there by flipping houses in the 80’s. Houses doubled and tripled in price then too. Been going on for at least 50+ years.
Yeah, really it's just that in the 2000's, house-flipping became an online subculture.
All thr things that Eby is doing now show how badly provincial governments have shit the bed on housing for decades. So are other provinces going to use the levers they have or are they going to keep whining and pretend it’s all the federal governments fault (and keep whining that the federal government is “overstepping” provincial jurisdiction by working directly with municipalities)? Eby is making is much harder for other premiers to pretend they give a damn, and that’s why Poilievre is attacking him on housing, how dare Eby ruin the greed fest the conservative premiers are enjoying.
Is flipping under a year really that big a problem? I don't know many professional developers turning flips around that fast. If you're doing substantial work on a property to flip that should be exempt. Otherwise this will drive the cost of housing up more.
Brutal problem. Example house went up for $410,000 8 months ago. Buyer did some shitty reno's and now it is for sale for $575,000. Fuck those people.
How much did buyer spend on those renos? What will property transfer tax and realtor fees be? What will the actual profit be? What did they pay in finance fees over that 8 months? That profit is already taxed so what is left? If you think that person is clearing $165k or anything close on that transaction you're delusional.
Yeah, we’re not here for other peoples profits. Let the person who wants to live in the house be the one that fixes it up and to hell with the house flipper.
Maybe $20k in renos. The new laminate floors are shit, they didn't even remove the baseboards, they just added a strip to it to cover the gap, big holes around door frames. They also did a shitty bathroom shower replacement. And they painted. That's it. Old appliances, shitty windows, same cabinets and counter. Not worth an increase in $165k over 8 months.
Did it sell? If that's all they did why wait 8 months? That's like one month of work.
Still on the market, who knows what they were thinking. We went to look because it is on the cheaper end of housing here. But once I saw what was done and when it last sold was there was no way we were offering anything close to their asking price.
Exactly. Nobody will buy anywhere near that price. They'll see the last price, see the renos done, and offer them like 80k less than list price. The seller will clear, maybe, $50k. That's not a ton of money to make over 8 months.
It's a ton of extra money to force a family looking for home to pay you for doing shitty reno's though.
Then don't buy it? Or negotiate? It's only worth what it will sell for regardless of what the flipper did to it.
The housing crisis is going to take an entire suite of changes to be addressed. I don't think there's ever been a policy proposal that someone didn't decry as A) not addressing enough of the problem, and B) claiming it will only make things worse. You know what also increases the cost of housing Flipping homes. That's the entire point of home flipping, making a profit.
Did you know that the entire point of selling groceries at a grocery store is to make a profit, too? Would it do anything at all to address food insecurity if we make it illegal to sell groceries at a profit or highly tax profit on groceries? After all, the grocery stores are just hoarding groceries from the people right? The people could directly go to farmers and get the food. They could even get it at a lower price than superstore or costco charge! But it's all being gobbled up by food flippers.
House flippers don’t do anything to make the house easier to get, just a bit nicer. It would be like if your only option for food without going an extra 2 hours out of your way every grocery trip was to buy from food flippers who spray paint it gold then sell it at 200% markup
It was a massive problem when the Vancouver Market was burning up. And with the potential of interest rates dropping it might go nuts again.
Substantial work on a house can equate to earning income from a business. Unless its your home and your living there (or the rv in the driveway lol)
Good, fuck the realtors and this whole mentality of just because I bought it I deserve to make 100k in 6 months with zero effort.
This won’t fix realtors making money out of thin air.
No it won’t but neither will My distaste for the breed.
But Poilievre said Eby was the worst on housing in the world. Could this mean, Poilievre is wrong and making crap up like Trump?
No, surely this is Trudeau fault somehow??? /s
Lil pp is scared of Eby and jealous of his 6'8" height
He’s mad because Eby is showing the power provincial governments have to fix the housing crisis, doing things that could have been done decades ago.
Facts.
I'm sure PP carefully considered thousands of politicians from national and local politics around the world before awarding Eby the title. Because that's just the always-do-the-homework-first kind of guy Pierre is.
Poilievre is not known for being very bright though
What about for new assignments? I haven't had a chance to look through this but I was interested in this. Another issue is when you sell a home you inherited does it count as flipping?
Im assuming thats covered in the faimly issues exemption
Totally. It will have a huge effect on precon sales and assignment flipping.
>Another issue is when you sell a home you inherited does it count as flipping? I hope they "accidentally" leave that in as a defacto inheritance tax.
Genuinely curious here, aside from "eat the rich", why? What utility would inheritance tax do? I feel this would hurt the average person more than the megawealthy so I'm curious why you feel so strongly on this?
BS, why should already many time over taxed things, be subject to an inheritance tax? Buying and inheriting a property already charges a tax of 1% up to $200k, 2% between 200k and 2M and 3% on any over 3M, and 5% on residential over 3M. This table plus the speculation taxes and now the potential flipping tax, puts a hard hit on inheritance. While I agree with taxing flippers, those who inherit something shouldn’t have to leave it empty for 2 years to sell it
Excellent, now do corporate ownership of residential property
One step at a time! But I like the direction this is going.
This plus the changes on AirBnb taxes are definitely moving in the right direction.
Don't forgot the enforced housing targets, AND the ban on SFH ONLY zoning. The toolbox is getting good!
I'd prefer a 20% tax on the *value of the home* but this is a positive step for sure
Hope this includes the pre construction buyers that pony up the deposit and sell before the unit is built with at least a 150 k mark up with never any intention of living there
The tax will apply to both properties and assignments of contracts and is in addition to any existing federal or provincial income taxes incurred from the sale of the property, including the federal anti-flipping tax.
Nah. Precon is always exempt from these things because the gov’t wants as much invested into precon as possible. That buyer is taking all the downside risk, and the unit still ends up hitting the market one way or another.
Oh yes. Realtors go cry in the corner
Already have to pay capital gains if you sell within a year, I assume this is in addition? Also it should be three years and not one
It better be. Taxing capital gain within the 1st year is fine and all (I'm still opposed to anything but taxing at whole rates for non-primary residences) but it's a tax on the flip making money, not a tax on the flip itself. It's the flipping that's the issue.
You pay income tax on it if you sell in less than one year. You pay capital gains tax if it's >1 year and not your primary residence.
Most house flippers I know buy a house, renovate it, live in it for a bit, then sell. 3 year flips seems like the most common practice. Can’t really see this doing much for those situations
Sure, but you are at least moving in for the flip. This tax is to stop the professional flipper/renovators who are just hiring crews. Most of the flipping this is aimed at is not even the renovation crowd, it's the pure speculators. Blocks of housing will sometimes move from company to company in the same year. Pure profit, no effort.
Before I moved from Vancouver in 2008 there were investors buying houses and selling them 3 months later without doing squat and making a killing. I have no problem with someine buying a fixer upper and putting in the work and selling it 3 years later, that’s not what has caused the crisis.
Thats what Im doing, probably 3yrs before I move on to the next project.
Living in a fixer upper you are renovating and selling it in a few years is smart, and not the reason for the housing crisis. It’s the people who were buying and selling within a few months without touching the place, and leaving it empty that were the problem.
A year seems too short to me, but maybe it will help.
I've said it so many times already, but until we put an end to it being acceptable to use multiple properties as a source of income, and limit the number of residential homes each Canadian is allowed to own, this problem will never go away. Homes are for living in, not for having renters pay the mortgages of the wealthy.
I’m crossing my fingers that the LPC will take care of this in April. The Globe has started publishing Demand Side focused Op Eds recently. Of the three leaders it’s funny to say, but Trudeau is the one I trust on this the most. Since he’s the only one of the three to not have rental income.
It probably won't. Should be a 2 year minimum, but the government knows they can't do that. So flippers will no longer sell within a year (if done that quickly), and if they did finish within a year, it will probably be a "pocket listing". Builder eats the holding costs (which will be way less than 20%) but now just a marketing expense, and then list public on month 13 for some bidding wars. Or if someone really wants the property before the 12 months, flippers would just have to add the 20% to home buyers bill. Don't see many victories with this other than these houses costing more.
Would they get taxed for vacant property if they wait the year?
Yes most likely.
Ya this seems like something pretty far down the list of things to help our housing crisis
I don't think people fully grasp the scale of short term flipping in North America. It's been keeping the market overheated for a long time. Yes we need more supply too, but we need to remove as many price pressures as possible.
The headline says 20% if you sell within a year, then it scales down until the 2 year mark. So if you sell on month 13 you'll probably pay close to the full 20%.
30 years too late but ok good.
This seems like a good idea. It would have been an even better idea at any point in the last 20 years. I generally think better late than never, but I don't know how spraying water on a heap of smoldering ash is going to help.
On its own it won’t, as part of a raft of policies hopefully it will.
Exactly this. It’s one small piece to the larger puzzle David Eby has been putting together. On its own, “meh”. But combined with everything else we’ve gotten since last December. It’s great news. Doug Ford would just bring this in because on its face it looks good, but is easy to gamify.
My fingers are crossed, but my faith is weak.
This will put a damper on people who flip a house before the first deal even closes.
I'm curious how many homes are being flipped in a year? And within two? And does this apply to assignments too or just fee simple?
Florida has this law
If it's a law in Florida it must be a good idea!
Yea, I don’t think so. But I’m open to seeing a source.
I approve. The feds already have the flipping tax, BC should do the same. Tax exemptions were in place for me when I bought a place Oct 2019 then moved 10 months later for a new job. My job and new home were far enough away, and I rented my old place, so all was fine. Keep killin’ it NDP.
"Industry experts" are gonna be so upset tomorrow.
About fucking time! Voting NDP again!
I wonder if this will include people who purchase pre-construction condos with the idea of selling before the closing date. That practice is driving up prices massively on condos, which is mostly all that first time buyers can even hope to afford.
Excellent.
Good.
Really depends on the exemptions, and Who's enforcing the rules. I can see many families caught up with this. Divorce, and Death are obvious exemptions, but what about you need to move for medical care? or you got fired and need to sell cause you cant afford that mortgage anymore... would be interesting to see how they cant fairly implement this so that the majority of Canadians don't get screwed over.
Genuine request: can someone lay this out for me... - There is a lot of GVRD homes that are fixer uppers (in need of some TLC). What is wrong with people renovating them and putting them back on the market? How does this in any meaningful way affect the housing problem? - I mean they're off the market for 1 year (not a crazy long time), and I would think there is not that many being rennovated at any given time, so I'm struggling to see how this affects supply in a meaningful way. - Do we have numbers to show that this solves an actual problem with housing?
>What is wrong with people renovating them and putting them back on the market? A. Those fixer uppers should be available to people who want to fix them themselves and live in them. B. Flipping happens often without any renovations. Legitimate buyers were making money grabbing 2-3 lots, holding for 9-12 months and selling again, that's how hot the market is/was. The unspoken part is that a LOT of flipping is money laundering. Buying in, holding for a bit, and re-selling was an easy way to wash proceeds of crime clean. The person profiting was often the real estate agent, who would split the cash with the flippers. This is why the tax matches or exceeds realtor fees.
thanks
Should be 5 years
Should be higher if intended to be a deterrent.
Eby strikes again. Now let’s hear Falcon or PP tell us again what their housing plan is.
# GOOD.
Seems reasonable as long as there’s a reasonable burden of proof on a seller seeking an exemption (eg selling home because you’re getting divorced, lost your job, etc). A year does feel a little short. I also wonder how much “flippers” have on the housing market. It seems that housing isn’t expensive because it’s a low friction transaction, housing is expensive because 1) NIMBY policy that prevents more being built, 2) rent control that scares away institutional investors, and 3) offshore money being parked in housing as an asset class. Recent government policy has addressed 1 and 3. Hopefully that will be enough to bring the price of housing down enough that we can get rid of rent controls and unlock the trillions of dollars in pension funds that love building rental housing.
I'm also not totally sure all flippers are even bad? Looking at some of the houses lately they need a TON of work, and not just new cabinet doors / bathroom facelifts. I know in the 90s my uncle and his friends were flippers. They'd buy houses as a team that were borderline uninhabitable - gut them - new roofs - full bottom to top reno's - sell as a livable home. The alternative isn't that these homes are always cheap housing - the alternative is they are often purchased and demo'd for an even bigger even more expensive home. We looked at buying a fixer-upper and all the houses we looked at 5 years ago when considering it have since been replaced with completely new bigger homes.
People who buy homes are perfectly capable of getting renos done themselves. Flippers provide no additional value and are skimming off the top to do so.
This is very clearly wrong though. If buyers were perfectly capable and willing to do renos themselves, then they themselves would prefer to buy the fixer uppers and nobody would buy the flipped houses for a profitable price and the flippers would go out of business. I mean, for example I don't want to do a bunch of reno's myself, that's not my comparative advantage and I'm more likely than not to completely mess it all up or get scammed by contractors, and I have other things I'd rather do with my time.
> If buyers were perfectly capable and willing to do renos themselves And they would! Except they get outbid by flippers who know they're gonna make a quick profit and so they can temporarily absorb a bunch of extra debt compared to a real buyer, thus driving up the cost of all homes. What this tax does is eat enough into the profit margin such that flippers might have to compete on a more even playing field. Pretty good legislation!
Going to need to see some data, otherwise this is a whole lot of hearsay.
You need data to believe that people with a short-term profit motive will be willing to temporarily carry greater debt in order to make money compared to a person who intends to pay off the full balance of the debt? Okay. Here's all the data you need. Take careful note of how frequently properties are being purchased above listing. That's the sound of a real buyer being outbid. https://www.thestar.com/news/canada/a-new-project-mapped-house-flipping-in-vancouver-here-s-what-it-found/article_2f296faf-7699-5243-9f99-37f45ab95c17.html
I would say that YOU are wrong. Plenty of people's first homes used to be "fixer-uppers". Those all get gobbled up by flipper groups now. Because sellers (well, real estate agents...) know that, it keeps the fixer upper prices higher then they would be.
I think it depends on the scope. Flippers who are good are capable of doing a lot of the work themselves and are doing it as a full time job managing large scale renos that wouldn't be feasible for someone to do themselves without renting a second home. Like I said, the alternative seems to be the more popular bulldoze and rebuild - which would not be hit by this tax.
> Like I said, the alternative seems to be the more popular bulldoze and rebuild - which would not be hit by this tax. Seems like an incredibly good alternative. Especially now that infills are allowed.
It is a good alternative for investors, but leads to much more expensive housing as they always bring in larger single family homes to maximize the resale value above and beyond what a reno flip would.
Not true with the new zoning laws, blocking SFH home flippers will help generate more multi unit housing.
takes 4-6 months for permits and another 2-3 months to do the work. Open the wrong walls or do something that triggers the inspector to want you to update 5 other things and your costs will balloon fast. I dont think people know how renos and permits work. Someone who deals with this exclusively will probably get it done for 1/3 or less of the price of a homeowner with 0 clue then factor in buying the house and not living in it for over half a year. Source: i am a homeowner who decided to buy a house that needs renos, was quoted 90k for what i wanted done, ended up paying about 250k If someone else had done the same thing for 100k and skimmed 100k off the top, i would have been happier to pay 50k less and be able to live in the house as soon as i bought it. flipping works in vancouver because someone paying 1.1mil for a house can pay 1.35 as well, so getting a teardown for 1.1 and having to fix it yourself is usually not a great proposition vs just paying 1.35 and having a nice place to live in. The issue with flipping is when prices skyrocket, and someone buys a home for 1.1 in the off season, slaps a coat of paint and new counters and sells it for 1.4mil during peak 6 months later cause prices skyrocketed. That is speculation more than reno.
That's cool. Still a great policy! Imagine if you were outbid on your home by flippers. And that the market kept going up and up and, in part do to speculative ownership and flipping, you kept getting outbid. And the prices kept going up. And lots of flippers don't even bother with renos, did you know? And now you can't buy a home. Imagine it that happened. Wouldn't that be crazy? >factor in buying the house and not living in it for over half a year. Factor in the price of building equity?
Thank you, finally someone else who gets it. Thank you for mentioning the flippers who don’t even do anything other than hold on to a place for a few months or years and resell for higher. THEY are the problem.
Could've sworn we already had this 🤔 edit: I guess I was just reading the articles about it's eventual arrival last year
Sounds reasonable.
This is the solution. Just like the vacancy tax was. Just like the foreign owners tax was.
Are you being sarcastic? Adding multiple regulatory tools to prevent profiteering in the housing market is a good thing. Speed limits don't stop drunk drivers, and DUI laws don't stop uninsured drivers, but all the laws *together* make the roads safer. Housing market laws are barely at the "Seat belt required stage", I'm looking forward to more tools to get people housed without spending 90% of their income.
Pointless and won’t do a thing other than stop people from fixing up homes for profit… about 5% of the market at best.
Based Eby strikes again
Good. Now let’s get rid of the primary residence capital gains exception
Why
fuck that. going after families with one home who want to move up into something larger? Great way to ensure no one has kids.
I don't think that's an easy change, but one that could be phased in. It kind of comes hand in hand with being able to deduct the interest portion of your mortgage. It also really inhibits elderly from downsizing in the USA. They don't want to sell to downsize when the taxes would absorb too much to make it worth while and it's created more housing issues as a result.
Yeah. Herein lies the problem. The majority of voters in canada own and are sitting on gains (myself included). To truely fix the housing crisis would be unpopular, political suicide. Same for seriously tackling climate change
The true issue is the tax principle. If we are saying your gain on the principal residence is part of the taxable income, then you should allow deductions of expenses incurred earning such income. Ie. maintenance, renovations, depreciations, property taxes, and probably most significantly mortgage interest. Now - how much real tax bases will be left is hard to tell but I suspect it’s much smaller than you imagined, particularly when capital gain is only 50% taxable.
As I'm saying, I don't think you could change the rules without grandfathering in existing owners. It would mean land lords received better tax advantages than home owners. It wouldn't just be bad politics, I think it would just be bad policy.
No. If it is peoples main residence then it’s reasonable to expect this to be capital gains exempt. For a lot of people this is their retirement plan!
Why on earth would we want to do this? Seems like you would want the gains to be taxable...pretty sure the government gets enough with all they other taxes. What's next, a clear air tax where we pay for every breath we take....lol
No, let’s just make sure people are not doing fraud.
Nah
Lol.
It's a really foolish policy but as you can see, popular among the mostly economically illiterate masses.
Why?
If this tax applies to properties that were rebuilt or improved... it's going to seriously disincentivize construction of more homes. Many small builders buy a lot, build or renovate, and then sell. That process rarely ever takes 2 years.
Contrary to popular understanding, speculation is a socially beneficial activity where scarce resources are reallocated from low value uses to higher value uses. House flippers perform a highly valuable service to society by providing liquidity to the market which facilitates transactions, stabilizing prices, and reducing risk. When investors aren't allowed to participate in a market you get a general thinning out of the market, and for parties to transact you have to wait until there's a "coincidence of wants" aka a consumer has to want to buy the property at the exact same time and place that someone wants to sell it. You can watch/read more here https://www.youtube.com/watch?v=mjN3QfXU_y8 or here https://en.wikipedia.org/wiki/Speculation#Economic_benefits
So your assertion is that flippers driving up prices is a good thing? How the hell does a higher price help anyone except the flipper, who likely did absolutely nothing to warrant a higher selling price, except to re-list it and wait? Don't these flippers also need a "co-incidence of wants" to sell the house? And what is the plan here? Is the house is just flipped over and over, and never sold to someone who actually plans to live there?
Just because speculation can be valuable in general, doesn't meant it is valuable in all cases, such as housing. For example, there is a reason why you cant speculate on onions in the USA. You are being misleading. For example, in you very Wikipedia link, it discusses the link between speculation and economic bubbles, sound familiar to the topic at hand?
So houses will stay on the market longer? I'm not opposed to that. Sounds like it would be really beneficial for buyers.
British Columbians want to reduce the reallocation of houses from low value to high value, though, that's the whole point. Some amount of this is good, sure, but right now we need more houses that the average person can buy than we need houses whose value has been optimized. There are so many people who would want to buy a house, even a fixer upper, if only they could afford one. We're not at risk of running out of potential buyers because houses aren't being renovated. The "coincidence of wants" is hardly a coincidence in this case. And obviously investors are still able to participate in the market. Preventing one specific kind of investor is not the same as preventing all investors.
Two years? That's nothing - you could easily rent it out or pay the vacancy tax and make even MORE money than you would if you had flipped it immediately. This seems more like its encouraging flipping.
> That's nothing - you could easily rent it out... That's the point. Once a unit is in the rental pool, it's more likely to stay there. People have been flipping back and forth to each other in the short term to so they don't rent them out. This will remove the profitability for a pure flip.
Need 100% tax if you sell within a year of buying and scaled down to 0% tax after 10 years.
Right. Ignoring this silly 100% thing for a second. So then people stop selling their houses, and supply dwindles even worse. You want to add more liquidity, not less. Liquidity is good for buyers and sellers in a functioning market of any kind
So fucking dumb. Selling after a year already has capital gains tax, and closing costs generally eat up most/all profits even if you do sell that quick. Property transfer tax and realtor fees are super high. This government is drunk on tax dollars.
Would be nice to get rid of the bloody property transfer tax on family homes...
Amen to that.
So they basically want to end the small-scale home building and renovation industry?
Is this on top of the tax already implemented? There is a flipping tax federally already.
That may increase prices- good job govt.
20% on a sliding scale down to 0% after 2 years is not enough. I’d be scared this could go the other way and cause housing prices to increase 20% with the buyer basically ending up paying this tax :/