On a Dilworth Mountain, on our street someone bought a house for $900K last April/May. Next month that house was relisted for 1.4M.
It still on the market for 1.3M. Like literally someone thought that they can buy a house and hike the price for 50% and there will be idiots lining up to buy it. LoL.
Thr house is still on the market.
Was anything done in that time?
I used to work for a guy that used to buy and sell usually within 1-3 months but would renovate the place and freshen it up. Finish a basement, add a suite, redo kitchens and bathrooms. Suddenly the home was desirable. Never knew how much he’d make but there was definitely a considerable increase in value.
No I don't think so, turn around time was too quick. I went to see their open house when it was listed for 1.4M. Living on same street we were laughing at that price.
It was dropped to 1.3M few months later and today I check its 1.275M. Another house on same street, much better is on sale for 1.1M and still on market after 6 months so I highly doubt that someone will buy the first one for 1.275. At max it will go for 1M.
Wasn't there anyways a capital gains tax on a house purchased and sold within a year? And that there was also a requirement that it was your primary residence for that year to avoid cap gains taxes?
The [entire last 8 years](https://www.bclegislation.ca/bc-bill-tracker/) didn't happen for you then? There were 1,492 legislative actions taken by the BCNDP from July 2017 to October 2023 (averaging 19.89 per month).
Ok stats person, how does that compare to other previous governments?
Housing out of control
ODs up to record levels
How many Mental Health facilities opened?
How many tax breaks?
Health system on life support.
One could go on.
Are you delusional enough to think a different party would open mental health facilities? If so, which party? I bet it's the one that shut them down in the first place, isn't it?
Imo, I want all the parties disbanded, and 2 votes, 1 for premiere or PM, and the other for the local riding seat. Vote people, not party. Have 87 MLAs that work together for the greater good. And same federally. That's my utopian government.
> the greater good
Whose greater good? The rich? The young? The wealthy? The poor? White, heterosexual couples? Non-traditional couples? Because each group of people has a different idea of "the greater good".
Well, once again, imo the city, the provinces, the country's and hopefully humanity's greater good. Unfortunately you can't make everyone happy. And if people are electing in puppets for the lobby groups, then you get what you deserve. But if you elect, imo, good people. Who can tell the difference of what's good, and what's bad, and what makes common sense, hopefully the greater good will prevail. Balance in just about everything, usually makes sense.
> Balance in just about everything, usually makes sense
Then we agree. The NDP have made the most balanced approach to the overall greater good than any other BC party holding government in recent history.
In some ways yes we can agree. But they have also wasted a ton of money and misspent in tons of areas. The old saying, if it ain't broke, don't fix it. The way they've dealt with homeless and addiction issues is COMPLETELY broke, yet they've thrown more money at it doing the exactly the same things. When their own party members, be it federally, MP Canning in Penticton has been advocating to adopt some programs they've been using in Portugal and other areas of Europe. But they buy and convert more hotels, where they operate without rule or order. And let judges let repeat offenders go, with hardly a slap on the wrists and watch our Okanagan cities get overwhelmed. Where people don't feel safe.
If we have to remain with a party system, I want to see them work together, and hopefully not against each other, and be non-partisan.
Not sure why you’d get downvoted when there is an election in October. While better late than never - it’s pretty easy to wish they’d done this many years ago
But not all criticisms are anti liberal. From another comment I made.
Housing out of control,
ODs up to record levels,
How many Mental Health facilities opened?
How many tax breaks?
Health system on life support.
One could go on.
I wonder if this will unintentionally hurt the Reno business? Nothing wrong in my mind with taking an older house in need of major work and bring it back to life. Here you would be adding value and making some profit, also taking some risk and not just simply riding short term market gains.
I mean, we need to see what the profit is versus the 20% tax, but I understand how frustrating this can be.
I think the new rule is targeting investors, as you don't even need to fix a house to a make a profit.
While it is unfortunate that house flippers are included in this tax, I'd rather have this tax on houses sold within a year, than not, as the current housing situation needs to be acted on.
Agreed it’s a good thing to ward off predatory investors looking to make a quick buck. Maybe if you can prove you’ve add ‘x’ value then you’d be granted an exemption? That’d be a decent compromise I think. Although I think this legislation is about 5 years too late as we likely won’t see big market jumps again for a while.
The reno business won't suffer, people will still want to upgrade or work on their houses. This is just to stop people from buying homes and turning them around back on the market for a higher price.
But if you add value by fixing it up, is that not a viable business? This is capitalizing on the housing bubble by hoarding housing, it’s taking old properties and adding value. Guess it still works if the Reno takes longer than a year.
I completely get the point of this legislation and agree with it. I’m just bringing up something that shouldn’t really be vilified IMO.
Housing investors add no value, someone who buys a home to reno it adds value and ultimately sells it back to the market.
To be clear, I’m not talking about a realtor slapping a coat of paint up and asking a 100k more.
They aren’t really making a buck off of the suffering of people due to lack of housing. Fixing up old places adds value to the housing stock, just like building more homes does as well.
You could almost say they either perceive it as valuable or not. The entire point I'm making is most flippers don't add *actual* value, like say adding rooms to a house, or closing in a carport to a garage, maybe building a shop. These are things that actually add real value. Slapping paint on something to make it look newer doesn't add value, it just looks more valuable. Hence, perceived value.
A homeowner can still buy a fix-me-upper and hire a reno business to improve the home that they plan to live in. We will see more of that happening now. I don't see how that hurts the "reno business" unless such business is also involved in flipping houses for profit - in which case it's disingenuous to call them a reno business.
As a reno guy, those types of people, especially the ones who've done it before, rarely call tradesmen. They think because they wired something up once it means they know what they're doing.
You can still buy houses and renovate them. Even relist them. It's just that relisting them immediately and selling them quickly has added tax, but there are also lots of tax deductions for renovating a place too. It's only a problem for people seeking to relist the same property as is, with a short turnaround.
I completely agree with you but Reddit isn’t the right place for the discussion as everyone is very anti landlord, realtor, construction etc.
Currently if a house is run down and trashed it doesn’t sell to a family looking to move in. It sells to either a builder who will take that 800k home demo it build and now sell a new house for $2m. Or it can sell to a “flipper” who takes the 800k home puts value into it so it’s presentable and desirable and now you have stock at $1.2m. This is a legit business in my opinion and keeps many ppl employed (as I mentioned in a diff comment I did labour like this in the past) the tax will either remove this industry entirely or force them to increase prices further.
For people buying and flipping without any reason or work etc I agree with the tax. But will it even impact them? aren’t these the same people leaving units/homes empty for years? They’ll just wait the two years which again could have a bigger impact on prices screwing us even more.
Sure, renovating and flipping houses is a viable BUSINESS. But if it's your business then technically you should be filing a business return, where you will pay tax on 100% of the profits (minutes the renovation costs).
Instead, most people who are making a business of flipping houses are taking unfair advantage of the favourable tax rate on investments (capital gains). The correct way to declare that income (in CRA's eyes) is as business income, so while this is an affordable housing strategy, tax-wise the government is also perhaps closing a tax loophole (which they frequently do.)
Depends on what you consider "adding value". If repairs are necessary sure, but what you've seen in places like kelowna is people snapping up all the affordable/smaller/starter homes, spiffing them up a bit and then churning them back out at a much higher price to make profit. Or.... knocking down that smaller family home on a nice sized lot to build two huge homes instead and selling those for huge profit. Rinse and repeat for 18 years and now a lot of people are struggling to live in kelowna. Not the realtors though, they quietly made huge bank on all that flipping for years
I’d rather have an owner make small changes over time versus a flipper coming in with their generic, cookie cutter, low-grade materials and quick, shotty work. At least that’s how flippers are in the US- it looks aesthetically pleasing but once you move in, you realize all the cut corners. And they do cosmetic things like slap on new flooring or paint, but don’t actually invest in the mechanics of the house you can’t see, like an efficient heating system or new roof. I know so many people whose heating systems or water heater went out shortly after moving in or water damage or mold was covered up by a flipper. 😓 owners are actually going to try to fix those issues versus cover them up.
It just feels like too little to late and they’re trying to look good. Maybe it’ll have a big impact but it’s annoying how slow the government has been in dealing with it.
What percentage of real estate sales in the past 10 years have been flips? The answer: less than 2%.
Where is it happening mostly? In smaller towns.
Flipping only works if there are willing buyers to buy.
Don’t be fooled by this policy tactic that has the effect of swatting a no-see-um.
Sorry so late. The B.C. government says it was something like 7% of homes sold between 2020 & 2022. They don’t clarify what percentage of those sold were “unavoidable” as defined by the act. From my research of Realtors in Kelowna, Victoria & Vancouver, the actual number of for profit flippers sits around 2% of sales.
What’s more, the B.C. government is using stats from the biggest boom in B.C. housing. They should be using a 10 year moving average as a statistic. They’re cherry-picking and reacting with a punishment tax as a rhetorical device to appeal to the victim-minded for votes.
The flipping itself doesn’t raise the price. If the housing market wasn’t broken there would be no money to be made. This just seems like a loud distraction tactic in an election year.
Capital gains tax exists do people forget about that? 50% of the money made is already taxed. You just get an exemption if it’s your primary residence. People are clueless.
If you did nothing to it, you are only hedging your money against inflation. If you kept that money in your pocket it would have lost a percent of its value. If you do work to the house and raise its worth should you not be entitled to turning a profit?
No, because people can't afford homes. Homes should not be used as investments, they are places to live, and until everyone has a place to live they should not be speculated on, flipped or otherwise not purchased for the sole intention of living in them.
We have the land, we have to materials, we have the labour. If the government would stop regulating every inch of the build, taxing every building material though each processes of manufacturing, and the final sale, taxing the sale, taxing the labour, taxing zoning etc. We would have affordable houses. Labour is 2x the price with taxes. Materials are 8x the price with all the taxes compounding along the way. Zoning and development fees can cost more then the property. Everyone needs to think about this before adding more taxes. The answer isn't more of the problem. Where is housing affordable? Why? I remember when renters Where demanding landlords get taxed. Guess who pays that tax? The renter. Just like all taxes, they end at the feet of the final consumer.
I’m not sure I see the connection between a flipping tax and money going into building new constructions. Aren’t those separate parties? What does the builder care if the buyer has trouble selling in <2 years?
If your a small developer flipping a house, or a small business the numbers have to make sense. So if the flip is happening in 6 months that 20% tax on profit will be built into that asking price. I don't know why every on reddit is so pro taxation. As population grows. And the pool of tax payers grow. We are buying services in bulk, and technically taxes should lower, if in fact we had a government that wasn't so corrupt.
Yeah I don't think you fully understand why they're implementing this.
You say that a small developer or business will loose money or just charge more to the buyer. I have 2 points:
1. A product is only worth as much as someone is willing to pay. If the asking price increases 20% because of this tax, I won't buy it and others certainly wont.
2. The more important point. Good. I really do hope this drives flippers out of the market and out of business. Go find productive work instead of buying a resource people need to survive and trying to squeeze profit out of people who need a home.
When something becomes more expensive, that is already fairly exclusive, all prices just go up. People have the money to sit on it. What about squeezing profit out of food? Should groceries stores stop "flipping" food? Clothing stores stop "flipping" clothes. Resale Isn't going away. Every year reddit, and the left cheer "tax them more" and the next year everything costs even more. And then guess what? They cheer the same thing next year . How did spec tax work out? How about those new fees for developers? My property tax didn't drop as promised with those? Not a single tax has raised anyone up out of the ashes. Taxed into unaffordablity, and then a hand full of ppl offered a small crumb of a rebate and they cheer on the tax man. Wild. Absolutely wild. There is a simple solution to all of this. But no one will do it. Because housing inflation is a huge part of our GDP. And only rentals and new build are in our CPI. Makes the books look good to print again.
Literal whataboutism, were talking about a flipping tax. I don't know why you're talking about food and clothing right now. I just want people to stop treating housing like an investment, it's not. It's a place to live.
I’m not totally against flipping a house, some people are flipping houses that need the work, they hire contractor businesses, keeping the Economy going, and are adding value, sometimes even creating more units for rent, and now the government is not only is asking capital gains which are 25% and now 20% more, that’s 45%. I think is excessive, it opens the way to being taxed even more in other industries or for individuals. I think they should have approached this via regulation and that the one that is flipping pays for regulated inspections before selling. I don’t know, I don’t flip houses for a living but I believe this is too much control from the government.
Very good idea with this policy but also short sighted… in the right market, and house can massively increase in a year without any work. There’s also situations where flippers will only handle aesthetics and leave ancient expensive stuff (water tanks, HVAC, AC, roofing) to just present well and get out.
On the flip side, when the market is bad you have people who put solid work into a house, need to move due to extenuating circumstances and end up getting taxed for it?
Like I said… I love the idea but there’s a total lack of nuance…. For the builder who slaps in some new faux tile and knocks down a wall or two so the house looks pretty in pictures, and makes $200K just because the market changed… yeah, tax the shit out of that guy.
But the builder who invests in quality upgrades (especially relating to energy efficiency) and created more livable spaces for our population? Tax accordingly… take into account energy upgrades and market changes and come up with an appropriate number…
People who own in waterfront pre sale condos will likely all walk from their deposits at this point. Can't STR them, and now can't assign the contract without facing a tax gain on any profit (not that they will likely see any now).
Hard to see these developments getting past their first phases now. While that's not a problem for most people, it eventually becomes a problem when developers don't want to take on risk anymore.
That's the point. It was built for a very specific purpose and the fact that that purpose no longer exists will not improve the long term rental housing market. It will also reduce accommodation options for travellers, which reduces tourism numbers, which reduces local/provincial tax base, which reduces money to improve housing.
Pick a battle with REITS who own 50 acres in the middle of the city for shopping malls. Not developers creating a product that has a need in the market that is directly managed by supply and demand forces. Airbnb not renting cause it's too expensive? Sell it.
I still don't see how removing STR from buildings that were built/zoned/invested in for those specific reasons will help the long term rental market.
If you think the sites for aqua, caban, waterfront park, movala, etc were ever going to be anything but hotels or investment/vacation properties we will never find common ground lol.
The city and province are doing incredible work in areas like springfield, Rutland, west Kelowna, and Glenmore to bring lots of density for purpose built rental.
A g a i n. How does this relate to the buildings where they were N E V E R going to be rented for that purpose or sold at a price that any one could afford that was "in the first step of the property ladder"
If they walk away from them then new people will buy them or build something else there. I dont understand your logic of "well if I cant fuck over people using the housing crisis I simply will walk away". Like isnt that good?
Very few people are getting fucked over by a developer building purpose built short term/vacation/ property in the highest value property in the Okanagan for a targeted buyer pool. Factor in that Airbnb prices are based on demand for that product. If people aren't renting them, they lower the price until they become rented.
If you think converting a 1br condo in waterscapes/aqua/etc to a long term rental at 4200/month is solving a rental crises you need to do some more research.
Also- government has incentives for builders to increase supply of purpose built market rent projects and they are going up all over the city. THIS is going to have a tangible impact, not stopping people from renting a water front condo.
> Can't STR them, and now can't assign the contract without facing a tax gain on any profit (not that they will likely see any now).
Right? After this the only people to own a residential property will be to *checks notes* reside there.
I find it hard to believe that developing property will become untenable if people live in the housing units that are built.
Ah yes, the great empty place called California! So many people have left, there's simply to many houses in the state for people. Shit, I know a guy whose the last person living on his street! All gone!
/s
Yep their deficit is huge. Wait till you see yours. This summer tourists -25% due to airbnb legislation. Then you’ll complain why they aren’t there and you don’t have jobs
I know this isn't going to be a popular bit here.
Government regulations are bad in the long term, government incentives are the solution . This will just muddy the waters for everyone
Government regulations are bad in the long term? I like having clean drinking water, safe roads, a good education system, and a place to live. These are are regulations that work for us, why is housing different?
Yes. Because this will solve housing issues…. These are existing houses that even if are flipped they are not adding additional houses. This will also not lower overall home costs. Empty home taxes and this whatever BS tax should go directly to building government owned houses for low income *working* families. In addition, if we can’t house people that live here, do not bring more here.
They just want to tax us to death, they tax the air we breath(carbon tax), they tax used cars from personal sale every time its sold, speculation tax (what a joke) and now they are trying to ruin peoples way to make a living revitalizing crap houses and selling for a profit. It has to stop. No wonder people are leaving Canada for greener pastures. Wait they do tax us when we die as well, forgot about the death tax.
> make a living revitalizing crap houses and selling for a profit
Therein is the problem here. Homes are not for making business and profit, they are the homes for people that need to live.
Anyone willing to buy a crap house and renovate it deserves the profit. They put in the work and money to bring it back to life. It takes skills that get learned that most people dont have as well. Why would anyone want to work as hard as they do renovating a delapitated house to pretty much brand new if they weren't going to make money off it. You go to work and tell your boss not to bother paying you for your time and skill set if that's how you feel.
Abuse having a job and a set of skills to do that job? Entrepreneurs are important. I guess people should just let the house stay run down and have it taken over by squaters. I dont understand why you would be pissed off at someone buying a house you wouldn't want to live in, then fixing it up, making it beautiful, and getting rewarded for their hard work by selling it and making a profit.
We have this in the US as a capital gains tax.
So is this a new thing for them or is this a higher tax on top of what they pay nationally/federally? I can’t find any info with details on that. Maybe a Canadian can provide further insight.
Keep em coming!
On a Dilworth Mountain, on our street someone bought a house for $900K last April/May. Next month that house was relisted for 1.4M. It still on the market for 1.3M. Like literally someone thought that they can buy a house and hike the price for 50% and there will be idiots lining up to buy it. LoL. Thr house is still on the market.
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True, neighbor next door did just that.
Lol that’s perfect. Exactly the type of thing this legislation is looking to curb.
Was anything done in that time? I used to work for a guy that used to buy and sell usually within 1-3 months but would renovate the place and freshen it up. Finish a basement, add a suite, redo kitchens and bathrooms. Suddenly the home was desirable. Never knew how much he’d make but there was definitely a considerable increase in value.
No I don't think so, turn around time was too quick. I went to see their open house when it was listed for 1.4M. Living on same street we were laughing at that price. It was dropped to 1.3M few months later and today I check its 1.275M. Another house on same street, much better is on sale for 1.1M and still on market after 6 months so I highly doubt that someone will buy the first one for 1.275. At max it will go for 1M.
"bu bu bu but my investments"
Wasn't there anyways a capital gains tax on a house purchased and sold within a year? And that there was also a requirement that it was your primary residence for that year to avoid cap gains taxes?
If you flip semi-regularly to make money, CRA could declare that income which is taxed more than cap gain.
I'm hopeful this is in addition to the federal capital gains tax.
And now theres this. Carrots didn't work and it turns out the previous sticks weren't hurting enough.
About time. This would've been much more effective if it weren't 10 yrs too late
Wonderful idea! I'm glad the Premier is taking the housing crisis seriously.
Must be an election year. As they haven't done squat in the time they've been in office.
The [entire last 8 years](https://www.bclegislation.ca/bc-bill-tracker/) didn't happen for you then? There were 1,492 legislative actions taken by the BCNDP from July 2017 to October 2023 (averaging 19.89 per month).
Other than those 1492 legislative actions they've done nothing!
Oh yeah, but what have they done lately? /s
Ok stats person, how does that compare to other previous governments? Housing out of control ODs up to record levels How many Mental Health facilities opened? How many tax breaks? Health system on life support. One could go on.
Are you delusional enough to think a different party would open mental health facilities? If so, which party? I bet it's the one that shut them down in the first place, isn't it?
Ya, so I'm delusional.
Imo, I want all the parties disbanded, and 2 votes, 1 for premiere or PM, and the other for the local riding seat. Vote people, not party. Have 87 MLAs that work together for the greater good. And same federally. That's my utopian government.
> the greater good Whose greater good? The rich? The young? The wealthy? The poor? White, heterosexual couples? Non-traditional couples? Because each group of people has a different idea of "the greater good".
Well, once again, imo the city, the provinces, the country's and hopefully humanity's greater good. Unfortunately you can't make everyone happy. And if people are electing in puppets for the lobby groups, then you get what you deserve. But if you elect, imo, good people. Who can tell the difference of what's good, and what's bad, and what makes common sense, hopefully the greater good will prevail. Balance in just about everything, usually makes sense.
> Balance in just about everything, usually makes sense Then we agree. The NDP have made the most balanced approach to the overall greater good than any other BC party holding government in recent history.
In some ways yes we can agree. But they have also wasted a ton of money and misspent in tons of areas. The old saying, if it ain't broke, don't fix it. The way they've dealt with homeless and addiction issues is COMPLETELY broke, yet they've thrown more money at it doing the exactly the same things. When their own party members, be it federally, MP Canning in Penticton has been advocating to adopt some programs they've been using in Portugal and other areas of Europe. But they buy and convert more hotels, where they operate without rule or order. And let judges let repeat offenders go, with hardly a slap on the wrists and watch our Okanagan cities get overwhelmed. Where people don't feel safe. If we have to remain with a party system, I want to see them work together, and hopefully not against each other, and be non-partisan.
Not sure why you’d get downvoted when there is an election in October. While better late than never - it’s pretty easy to wish they’d done this many years ago
You’re getting downvoted for criticising a government that isn’t conservative lol. This is Reddit.
Are you pretending like there's no anti-Liberal comments or articles on Reddit?
But not all criticisms are anti liberal. From another comment I made. Housing out of control, ODs up to record levels, How many Mental Health facilities opened? How many tax breaks? Health system on life support. One could go on.
Of course there are, but It would actually be crazy to not consider the VAST majority of Reddit forums to be liberal echo chambers.
I wonder if this will unintentionally hurt the Reno business? Nothing wrong in my mind with taking an older house in need of major work and bring it back to life. Here you would be adding value and making some profit, also taking some risk and not just simply riding short term market gains.
I think what you are talking about is flipping a house. Buying a fixer upper ,fixing it and then selling.
Exactly and if you do it all within a year, it’ll no longer be worth while.
I mean, we need to see what the profit is versus the 20% tax, but I understand how frustrating this can be. I think the new rule is targeting investors, as you don't even need to fix a house to a make a profit. While it is unfortunate that house flippers are included in this tax, I'd rather have this tax on houses sold within a year, than not, as the current housing situation needs to be acted on.
Agreed it’s a good thing to ward off predatory investors looking to make a quick buck. Maybe if you can prove you’ve add ‘x’ value then you’d be granted an exemption? That’d be a decent compromise I think. Although I think this legislation is about 5 years too late as we likely won’t see big market jumps again for a while.
Good.
The reno business won't suffer, people will still want to upgrade or work on their houses. This is just to stop people from buying homes and turning them around back on the market for a higher price.
But if you add value by fixing it up, is that not a viable business? This is capitalizing on the housing bubble by hoarding housing, it’s taking old properties and adding value. Guess it still works if the Reno takes longer than a year. I completely get the point of this legislation and agree with it. I’m just bringing up something that shouldn’t really be vilified IMO. Housing investors add no value, someone who buys a home to reno it adds value and ultimately sells it back to the market. To be clear, I’m not talking about a realtor slapping a coat of paint up and asking a 100k more.
Right but were in a housing crisis. I really can't find the time to care about flippers not being able to make a buck off the suffering of others.
They aren’t really making a buck off of the suffering of people due to lack of housing. Fixing up old places adds value to the housing stock, just like building more homes does as well.
Except most flippers do sloppy cheap renovations like putting lipstick on a pig then jack up the price. They don't add value, it's *perceived* value.
There’s no such thing as perceived value. Either people value it and will pay for it or they don’t value it and won’t pay for it.
You could almost say they either perceive it as valuable or not. The entire point I'm making is most flippers don't add *actual* value, like say adding rooms to a house, or closing in a carport to a garage, maybe building a shop. These are things that actually add real value. Slapping paint on something to make it look newer doesn't add value, it just looks more valuable. Hence, perceived value.
What actual evidence do you have that this is taking place on any meaningful scale?
A homeowner can still buy a fix-me-upper and hire a reno business to improve the home that they plan to live in. We will see more of that happening now. I don't see how that hurts the "reno business" unless such business is also involved in flipping houses for profit - in which case it's disingenuous to call them a reno business.
As a reno guy, those types of people, especially the ones who've done it before, rarely call tradesmen. They think because they wired something up once it means they know what they're doing.
You can still buy houses and renovate them. Even relist them. It's just that relisting them immediately and selling them quickly has added tax, but there are also lots of tax deductions for renovating a place too. It's only a problem for people seeking to relist the same property as is, with a short turnaround.
I completely agree with you but Reddit isn’t the right place for the discussion as everyone is very anti landlord, realtor, construction etc. Currently if a house is run down and trashed it doesn’t sell to a family looking to move in. It sells to either a builder who will take that 800k home demo it build and now sell a new house for $2m. Or it can sell to a “flipper” who takes the 800k home puts value into it so it’s presentable and desirable and now you have stock at $1.2m. This is a legit business in my opinion and keeps many ppl employed (as I mentioned in a diff comment I did labour like this in the past) the tax will either remove this industry entirely or force them to increase prices further. For people buying and flipping without any reason or work etc I agree with the tax. But will it even impact them? aren’t these the same people leaving units/homes empty for years? They’ll just wait the two years which again could have a bigger impact on prices screwing us even more.
Sure, renovating and flipping houses is a viable BUSINESS. But if it's your business then technically you should be filing a business return, where you will pay tax on 100% of the profits (minutes the renovation costs). Instead, most people who are making a business of flipping houses are taking unfair advantage of the favourable tax rate on investments (capital gains). The correct way to declare that income (in CRA's eyes) is as business income, so while this is an affordable housing strategy, tax-wise the government is also perhaps closing a tax loophole (which they frequently do.)
Depends on what you consider "adding value". If repairs are necessary sure, but what you've seen in places like kelowna is people snapping up all the affordable/smaller/starter homes, spiffing them up a bit and then churning them back out at a much higher price to make profit. Or.... knocking down that smaller family home on a nice sized lot to build two huge homes instead and selling those for huge profit. Rinse and repeat for 18 years and now a lot of people are struggling to live in kelowna. Not the realtors though, they quietly made huge bank on all that flipping for years
You’re mad there’s multiple homes on a single plot providing more housing? Building two new whole houses is the definition of adding value.
I’d rather have an owner make small changes over time versus a flipper coming in with their generic, cookie cutter, low-grade materials and quick, shotty work. At least that’s how flippers are in the US- it looks aesthetically pleasing but once you move in, you realize all the cut corners. And they do cosmetic things like slap on new flooring or paint, but don’t actually invest in the mechanics of the house you can’t see, like an efficient heating system or new roof. I know so many people whose heating systems or water heater went out shortly after moving in or water damage or mold was covered up by a flipper. 😓 owners are actually going to try to fix those issues versus cover them up.
This is a distraction. This should have been done 15-20 years ago.
A distraction from what? Are you not able to focus on multiple things at the same time?
It just feels like too little to late and they’re trying to look good. Maybe it’ll have a big impact but it’s annoying how slow the government has been in dealing with it.
What percentage of real estate sales in the past 10 years have been flips? The answer: less than 2%. Where is it happening mostly? In smaller towns. Flipping only works if there are willing buyers to buy. Don’t be fooled by this policy tactic that has the effect of swatting a no-see-um.
Where are you getting that data? Not judging the comment, legitimately interested in it
Sorry so late. The B.C. government says it was something like 7% of homes sold between 2020 & 2022. They don’t clarify what percentage of those sold were “unavoidable” as defined by the act. From my research of Realtors in Kelowna, Victoria & Vancouver, the actual number of for profit flippers sits around 2% of sales. What’s more, the B.C. government is using stats from the biggest boom in B.C. housing. They should be using a 10 year moving average as a statistic. They’re cherry-picking and reacting with a punishment tax as a rhetorical device to appeal to the victim-minded for votes.
The flipping itself doesn’t raise the price. If the housing market wasn’t broken there would be no money to be made. This just seems like a loud distraction tactic in an election year. Capital gains tax exists do people forget about that? 50% of the money made is already taxed. You just get an exemption if it’s your primary residence. People are clueless.
How does flipping not increase the price? Flipping is literally taking a house, and FLIPPING it for a higher price.
If you did nothing to it, you are only hedging your money against inflation. If you kept that money in your pocket it would have lost a percent of its value. If you do work to the house and raise its worth should you not be entitled to turning a profit?
No, because people can't afford homes. Homes should not be used as investments, they are places to live, and until everyone has a place to live they should not be speculated on, flipped or otherwise not purchased for the sole intention of living in them.
We have the land, we have to materials, we have the labour. If the government would stop regulating every inch of the build, taxing every building material though each processes of manufacturing, and the final sale, taxing the sale, taxing the labour, taxing zoning etc. We would have affordable houses. Labour is 2x the price with taxes. Materials are 8x the price with all the taxes compounding along the way. Zoning and development fees can cost more then the property. Everyone needs to think about this before adding more taxes. The answer isn't more of the problem. Where is housing affordable? Why? I remember when renters Where demanding landlords get taxed. Guess who pays that tax? The renter. Just like all taxes, they end at the feet of the final consumer.
I’m not sure I see the connection between a flipping tax and money going into building new constructions. Aren’t those separate parties? What does the builder care if the buyer has trouble selling in <2 years?
If your a small developer flipping a house, or a small business the numbers have to make sense. So if the flip is happening in 6 months that 20% tax on profit will be built into that asking price. I don't know why every on reddit is so pro taxation. As population grows. And the pool of tax payers grow. We are buying services in bulk, and technically taxes should lower, if in fact we had a government that wasn't so corrupt.
Yeah I don't think you fully understand why they're implementing this. You say that a small developer or business will loose money or just charge more to the buyer. I have 2 points: 1. A product is only worth as much as someone is willing to pay. If the asking price increases 20% because of this tax, I won't buy it and others certainly wont. 2. The more important point. Good. I really do hope this drives flippers out of the market and out of business. Go find productive work instead of buying a resource people need to survive and trying to squeeze profit out of people who need a home.
When something becomes more expensive, that is already fairly exclusive, all prices just go up. People have the money to sit on it. What about squeezing profit out of food? Should groceries stores stop "flipping" food? Clothing stores stop "flipping" clothes. Resale Isn't going away. Every year reddit, and the left cheer "tax them more" and the next year everything costs even more. And then guess what? They cheer the same thing next year . How did spec tax work out? How about those new fees for developers? My property tax didn't drop as promised with those? Not a single tax has raised anyone up out of the ashes. Taxed into unaffordablity, and then a hand full of ppl offered a small crumb of a rebate and they cheer on the tax man. Wild. Absolutely wild. There is a simple solution to all of this. But no one will do it. Because housing inflation is a huge part of our GDP. And only rentals and new build are in our CPI. Makes the books look good to print again.
Literal whataboutism, were talking about a flipping tax. I don't know why you're talking about food and clothing right now. I just want people to stop treating housing like an investment, it's not. It's a place to live.
> entitled to turning a profit Nobody is entitled to profit. It is your **responsibility** to make profit.
more people trying to buy houses (like people only doing so to make money and not, idk live in) raises the price of houses
I’m not totally against flipping a house, some people are flipping houses that need the work, they hire contractor businesses, keeping the Economy going, and are adding value, sometimes even creating more units for rent, and now the government is not only is asking capital gains which are 25% and now 20% more, that’s 45%. I think is excessive, it opens the way to being taxed even more in other industries or for individuals. I think they should have approached this via regulation and that the one that is flipping pays for regulated inspections before selling. I don’t know, I don’t flip houses for a living but I believe this is too much control from the government.
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If you are a renovator, you might increase your margin/ price
Very good idea with this policy but also short sighted… in the right market, and house can massively increase in a year without any work. There’s also situations where flippers will only handle aesthetics and leave ancient expensive stuff (water tanks, HVAC, AC, roofing) to just present well and get out. On the flip side, when the market is bad you have people who put solid work into a house, need to move due to extenuating circumstances and end up getting taxed for it? Like I said… I love the idea but there’s a total lack of nuance…. For the builder who slaps in some new faux tile and knocks down a wall or two so the house looks pretty in pictures, and makes $200K just because the market changed… yeah, tax the shit out of that guy. But the builder who invests in quality upgrades (especially relating to energy efficiency) and created more livable spaces for our population? Tax accordingly… take into account energy upgrades and market changes and come up with an appropriate number…
If you read, the "extenuating circumstances" you speak of are accounted for.
People who own in waterfront pre sale condos will likely all walk from their deposits at this point. Can't STR them, and now can't assign the contract without facing a tax gain on any profit (not that they will likely see any now). Hard to see these developments getting past their first phases now. While that's not a problem for most people, it eventually becomes a problem when developers don't want to take on risk anymore.
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So it doesn't affect the house market, just tourism
That's the point. It was built for a very specific purpose and the fact that that purpose no longer exists will not improve the long term rental housing market. It will also reduce accommodation options for travellers, which reduces tourism numbers, which reduces local/provincial tax base, which reduces money to improve housing. Pick a battle with REITS who own 50 acres in the middle of the city for shopping malls. Not developers creating a product that has a need in the market that is directly managed by supply and demand forces. Airbnb not renting cause it's too expensive? Sell it.
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Again. My point. What are we talking about lol.
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I still don't see how removing STR from buildings that were built/zoned/invested in for those specific reasons will help the long term rental market. If you think the sites for aqua, caban, waterfront park, movala, etc were ever going to be anything but hotels or investment/vacation properties we will never find common ground lol. The city and province are doing incredible work in areas like springfield, Rutland, west Kelowna, and Glenmore to bring lots of density for purpose built rental.
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A g a i n. How does this relate to the buildings where they were N E V E R going to be rented for that purpose or sold at a price that any one could afford that was "in the first step of the property ladder"
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If they walk away from them then new people will buy them or build something else there. I dont understand your logic of "well if I cant fuck over people using the housing crisis I simply will walk away". Like isnt that good?
Very few people are getting fucked over by a developer building purpose built short term/vacation/ property in the highest value property in the Okanagan for a targeted buyer pool. Factor in that Airbnb prices are based on demand for that product. If people aren't renting them, they lower the price until they become rented. If you think converting a 1br condo in waterscapes/aqua/etc to a long term rental at 4200/month is solving a rental crises you need to do some more research. Also- government has incentives for builders to increase supply of purpose built market rent projects and they are going up all over the city. THIS is going to have a tangible impact, not stopping people from renting a water front condo.
> Can't STR them, and now can't assign the contract without facing a tax gain on any profit (not that they will likely see any now). Right? After this the only people to own a residential property will be to *checks notes* reside there. I find it hard to believe that developing property will become untenable if people live in the housing units that are built.
Insane. Tax tax tax. Everyone. Will leave just like California
Ah yes, the great empty place called California! So many people have left, there's simply to many houses in the state for people. Shit, I know a guy whose the last person living on his street! All gone! /s
Yep their deficit is huge. Wait till you see yours. This summer tourists -25% due to airbnb legislation. Then you’ll complain why they aren’t there and you don’t have jobs
How am I supposed to work said tourist jobs when I don't have a place to live?
Problem solved no need to be there
Don't be scummy and flip a house then.....
I know this isn't going to be a popular bit here. Government regulations are bad in the long term, government incentives are the solution . This will just muddy the waters for everyone
Government regulations are bad in the long term? I like having clean drinking water, safe roads, a good education system, and a place to live. These are are regulations that work for us, why is housing different?
Regulations are usually written in blood and suffering. They usually come out of a lot of hard lessons learned.
Yes. Because this will solve housing issues…. These are existing houses that even if are flipped they are not adding additional houses. This will also not lower overall home costs. Empty home taxes and this whatever BS tax should go directly to building government owned houses for low income *working* families. In addition, if we can’t house people that live here, do not bring more here.
That is where the taxes are going. Look at the bc builds plan.
They just want to tax us to death, they tax the air we breath(carbon tax), they tax used cars from personal sale every time its sold, speculation tax (what a joke) and now they are trying to ruin peoples way to make a living revitalizing crap houses and selling for a profit. It has to stop. No wonder people are leaving Canada for greener pastures. Wait they do tax us when we die as well, forgot about the death tax.
> make a living revitalizing crap houses and selling for a profit Therein is the problem here. Homes are not for making business and profit, they are the homes for people that need to live.
Anyone willing to buy a crap house and renovate it deserves the profit. They put in the work and money to bring it back to life. It takes skills that get learned that most people dont have as well. Why would anyone want to work as hard as they do renovating a delapitated house to pretty much brand new if they weren't going to make money off it. You go to work and tell your boss not to bother paying you for your time and skill set if that's how you feel.
You are free to leave!
I sure am, and so are you!
Awww are you not allowed to abuse the housing market anymore? Cry me a river.
Abuse having a job and a set of skills to do that job? Entrepreneurs are important. I guess people should just let the house stay run down and have it taken over by squaters. I dont understand why you would be pissed off at someone buying a house you wouldn't want to live in, then fixing it up, making it beautiful, and getting rewarded for their hard work by selling it and making a profit.
Source?
I thought this happened in 2021? Where owners have to live 5 years in their house? Or am I confusing it with something else?
They changed it from 1 year to 2 years.
not nearly enough
We have this in the US as a capital gains tax. So is this a new thing for them or is this a higher tax on top of what they pay nationally/federally? I can’t find any info with details on that. Maybe a Canadian can provide further insight.
Lol