New condos being built in Downtown...worth it?

[Mr. Flibble]

But why tax property investors in the first place? They are not harming the market in the long run, only in the short run via speculation. Housing investors who rent out their property provide places to live for those who don't want to, or can't own property.

Many of those investors who are trying to buy and flip houses are renting their places out at a rate that is *LESS* than that of the mortgage. It is a bad investment decision, but if you are looking to rent, it is a major bonus.

In fact, right now the market is such that it is less expensive to rent than to buy. That is a certain sign of a bubble. The reason is that investors cannot hold on to "investments" that cause them to lose money over time. Taxation implies "punishment" of investors for providing housing, as opposed to encouraging people to create housing for those who need it.

Approximately 40% of the general population rents, by adding this tax on, the owners will be forced to pass this tax on to the actual tennants, because it is the consumer who pays all the taxes in the end, not the investor. Thus, this tax would increase rents for the renters, and, in the long run foister a punishment not on the investor with the extra property, but the poor renter just looking for a place to live. I personally don't think it is fair to create an incentive that makes the poor even less well off.

[riverrat]

HA ha, nice try, Flibble. You can't get away with that last little flourish!
Sorry - but I know you must be snickering behind your hand right now anyway!

I don't think tax needs to be seen as a punishment - it's a way of effecting fiscal justice! Can I get away with that?

[Mr. Flibble]

I don't think tax needs to be seen as a punishment - it's a way of effecting fiscal justice! Can I get away with that?

Is that the point of the tax? Or is a tax there to help create revenue for the government so it can still provide services? Or even along that argument, is it the job of the government to provide services, or to just see that services are provided?

In the end, the consumer pays all taxes. The idea that you can tax a business is false because a tax is a cost, and for a business to survive with higher costs, it must either reduce expenses, or pass the new costs on to the consumer. Thus, a tax on a business or an investor ends up burdening the consumer with higher costs for products or services.

[riverrat]

Yeah so, about condos in Nanaimo. I'd sure like to see the view from the top of the Cameron Island tower!

[Mr. Flibble]

LOL!

WRONG GERRY! WRONG!! YOU ARE SO WRONG!! Your opinion on the Cameron Island Tower counts for naught.

:P

[nathanenge]

sigh, I remember going on MLS when I was still in Vancouver, and were considering picking up a condo on Cameron Island. It was so cheap back then....now, in the half mills, OUCH!!!

[Mr. Flibble]

Yeah, ain't that the case. Hindsight is always 20-20. I tried like crazy to convince my mother to buy AMD stock when it was around $3/share in the late 90's. Then it split twice and went to ~$47. That $3000 would have turned into aprox $35,000.

Ah well, we tend to remember the good deals we missed rather than the bad ones.

[househunter]

Hi Flibble,

I think you may be mixing up your taxes. There is, of course, the yearly residential property tax that all owners (investors and residers) pay. I agree that it would be unwise to raise this tax on rentals, as it would certainly lead to higher rents.

I was referring to tax on the income made when investment property is sold. This tax is much less likely to be factored into rent.

I don't disagree with your point that rental properties might not be as numerous if there were less property investors.

However, less rentals would be more than balanced out by lower property prices--which would mean lower rent needed to make the payments--and, of course, less people actually needing to rent (because they can afford to buy).

[Mr. Flibble]

That is called capital gains tax, and it applies to any piece of real estate you sell with the exception of your own home. The tax itself is quite steep already.

[househunter]

Not steep enough to discourage widespread speculation in the Nanaimo Real Estate market apparently.

The tax doesn't necessarily need to be increased.

Enforcement of existing capital gains tax laws ('live in regulations'), and changes to what constitutes your "own house" (a longer 'live in' time) would just makes things a little more difficult for investors to evade the capital gains tax.

The idea is not to eliminate investment altogether. Flipping would still be possible, but only one house at a time and not every year.

If tax reform makes you antsy, the alternative would be to provide home ownership grants to first time home buyers like was done in the seventies. That would probably make the realtors happier too.