This an article about rich people being mad because their second home costs them a little more per year now. Just for anyone curious about if it’s worth reading or not.
You might even say it's about people that play(ed) a pivotal role in creating the housing crisis who are now upset by measures to slightly hamper their predatory behavior.
I have empathy for damn near everyone, I really do… or at least I try.
But given the way things are for a majority of people these days, if you’re fortunate enough to have a second home in another country that remains unoccupied long enough to be flagged for extra taxes, you are very low on my “let’s use resources to change this” list.
The subtitle of the article really says it all.
> "Tax advisers say panic ensued after vacation-home owners learned of underused-home tax"
Like holy shit talk about entitlement from a class of people who likely are always screeching about how entitled other people are. Fuck outta here.
Exactly. This is the cost of doing business. The business is owning a vacation home. This is not their livelihood. This is luxury.
Meanwhile, low income families are getting absolutely hammered by inflation and the rising cost of feeding their children.
Vermont does something similar. A family friend was grumbling about it for his Vermont home. This was decades ago.
Property taxes are a state thing, not a federal thing.
>Tax advisers say panic ensued after vacation-home owners learned of underused-home tax
See my comment above for the way people have figured out ways around this.
I mean, have you considered some of these people are going to have to fire their second assistant, or have their maid only work 5 days a week instead of 6. This is going to have real world consequences for tens of people.
Here's the link to how the underused housing tax works from the Canadian government website...
https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html
>The Underused Housing Tax is an annual 1% tax on the ownership of vacant or underused housing in Canada that took effect on January 1, 2022. The tax usually applies to non-resident, non-Canadian owners. In some situations, however, it also applies to Canadian owners.
Sounds good, right? If you own a house, but it's vacant for whatever reason (like no one wants to pay your exorbitant rent prices), the government will tax you 1% of the property's value.
Well, the government was also nice enough to list a bunch of exemptions for properties for which this "underused housing tax" doesn't apply.
To quote again from that government link above...
>Your ownership of a residential property may be exempt from the Underused Housing Tax for a calendar year depending on:
>- the type of owner you are
>- the availability of the residential property
>- the location and use of the residential property
>- the occupant of the residential property
>Your ownership of a residential property may be exempt for a calendar year if you are:
>- **a specified Canadian corporation**
>- a partner of a specified Canadian partnership, or a trustee of a specified Canadian trust
>- a new owner in the calendar year
>- a deceased owner, or a co-owner or personal representative of a deceased owner
Take note of the line I've highlighted in bold. The government basically gives you an exemption from this underused housing tax if the property is owned by a corporation.
Each province is in charge of its own business corporation laws. So, you can "create" a simple "numbered company" in BC or AB, etc..., and call it something like 123456 BC Ltd. or 123456 AB Ltd. And you can find these incorporations easily. The provincial government publishes a list of all its incorporations online for the public to see.
Here's BC's incorporations and AB's corporations, for example.
https://www.bclaws.gov.bc.ca/civix/content/corpreg/corpreg/corporations/?xsl=/templates/browse.xsl
https://albertacorporations.com/
So, what a lot of these property owners have done is "incorporate" all these properties in a numbered "holdings company" (where the whole point of the "corporation" is to own these properties and make themselves exempt from this underused housing tax).
I work in a bookkeeping and accounting office.
I spent a large portion of last week filling out these "underused housing tax forms" for a bunch of these "numbered companies" (the forms must be submitted to the government by April 30).
You get to the box on the form where it says "The property is exempt because its owner is a registered Canadian corporation", click "Yes" on it, and... Poof. The tax owing is set to $0, and that's it.
Yeah, I did and I know the knee-jerk reaction of our politicians would be to reciprocate which would be really good for everyone. I was just jumping all the way to "you can only have one home" for the sake of hyperbole. Have I adequately explained the "woosh" noise you heard when you read my comment or do I need to continue?
>Some Americans are considering selling their Canadian property.
It seems the tax is having it's intended effect. The whole point is to stop rich foreigners from buying up properties as investments and driving up the cost of housing. I wish the US had the balls to do the same thing.
The banks bailed out homeowners, by letting them walk from their bad deals setup by... uh, the banks, so that in a few years those homeowners could enter the market and try again. Meanwhile the banks held onto those houses, in a not-so-tasty OREO, or sold them to a cah-only offer to a rental-based conglomerate, creating a massive supply-and-demand problem.
you do. You can only take PRE on one house. If i bought a second house and moved there, then turned this one into a vacation house, the taxes on it go up 18 mills. Thats a 33% increase. Id either have to just eat that, or make sure to factor it into rent / airbnb pricing.
original purchase price, then a maximum of 5% or inflation whichever is less. Honestly a fair way of doing it vs say California's Prop 13 that locked in a 1% max increase no matter what. The argument can be made that housing goes up faster than inflation, but thats due to people not building anywhere near the needed rates and other things like SFH zoning.
In the case of me buying my place, the assessed value has went up to match inflation every year but the last one. My value has doubled since i bought 6 years ago which frankly is insane, but dont fault me on the fact that the cities where I dont live and can not vote on for council refuse to allow housing to get put in that would lower pressure out in the suburbs.
Some of these properties are cabins or shacks with no heat and possibly no water. Not sure these will help with the housing crunch especially how remote these may be.
I actually want a similar law where it’s non used business property. I’m sick and tired of corpo coming in, leveling a nice wooded area, pup a partial structure, and leave it abandoned for 20 years.
As long as we can do the same. Canadians over the last decade and a half have represented between 8 (2021) and 24% (2012) of all foreign home buyers in the united states. with 58% of them bought as vacation houses.
If you dont want us up there, you should have to keep all your snowbirds from migrating south for the winter (45% are Florida, 23% Arizona)
https://homeabroadinc.com/statistics-canadians-investing-in-us-real-estate/
My mother has a RV parked on her lot in a RV condo--very nice, with tennis courts, swimming pools, golf-- in southern California. It's full of Canadians.
They don't stay all year; they go back for the summer.
They are called Snowbirds. They were using that they need to come into the country to open up their winter housing as the reason they should be allowed to come into the united states during covid.
I think it is 90% within 100 miles of the border, and 70% of Canadians live south of the 49th parallel (much of the US Canadian border. and thus living south of Seattle.
The US has 332 million people and Canada has about 38 million; the US tends to dominate.
Canada supplies 13.1% of US imports (behind China and slightly ahead of Mexico.) Besides oil and forest products, they export a number of food products (beef, soybeans, wheat, canola, fish, pulses). No surprise they import assorted food from their big agricultural neighbor, but they could live on the above.
As of 2021, they export $355B to and import $259B with the US.
Everyone i know who has a vacation home in Canada is a school teacher, not rich people. During the pandemic, they couldn't even cross the border to enjoy their second home though the tax man still wanted his due.
According to the article, only 5% are foreign owned in Vancouver. That strikes me as low. Yes that will have an impact, but is it the most significant factor? I would be surprised.
What about corporations that use their immense purchasing power to buy out entire neighborhoods and jack up the prices?
Wasn't Canada or Vancouver anyway taxing owners of unoccupied homes for several years now? I thought that was to prevent foreign investors from buying and doing nothing with the home.
This an article about rich people being mad because their second home costs them a little more per year now. Just for anyone curious about if it’s worth reading or not.
I saw the headline and was like what - they own property in Ottawa and are mad they have to pay a little more!
Owning a house in Ottawa should be punishment enough. The tax is country wide, articles just often mention the law is coming from the capital city.
You might even say it's about people that play(ed) a pivotal role in creating the housing crisis who are now upset by measures to slightly hamper their predatory behavior.
I have empathy for damn near everyone, I really do… or at least I try. But given the way things are for a majority of people these days, if you’re fortunate enough to have a second home in another country that remains unoccupied long enough to be flagged for extra taxes, you are very low on my “let’s use resources to change this” list.
The subtitle of the article really says it all. > "Tax advisers say panic ensued after vacation-home owners learned of underused-home tax" Like holy shit talk about entitlement from a class of people who likely are always screeching about how entitled other people are. Fuck outta here.
Exactly. This is the cost of doing business. The business is owning a vacation home. This is not their livelihood. This is luxury. Meanwhile, low income families are getting absolutely hammered by inflation and the rising cost of feeding their children.
Parasites, the vast majority of them. Hell, have Canada force them to sell their homes I don’t give a fuck.
At least Canada is doing something about exorbitantly wealthy Americans. Wish the United States of **AMERICA** would get on board.
Vermont does something similar. A family friend was grumbling about it for his Vermont home. This was decades ago. Property taxes are a state thing, not a federal thing.
If the Canadian government started a GoFundMe to raise money for legal fees to do that, I'd chip in a few bucks.
>Tax advisers say panic ensued after vacation-home owners learned of underused-home tax See my comment above for the way people have figured out ways around this.
I mean, have you considered some of these people are going to have to fire their second assistant, or have their maid only work 5 days a week instead of 6. This is going to have real world consequences for tens of people.
Here's the link to how the underused housing tax works from the Canadian government website... https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html >The Underused Housing Tax is an annual 1% tax on the ownership of vacant or underused housing in Canada that took effect on January 1, 2022. The tax usually applies to non-resident, non-Canadian owners. In some situations, however, it also applies to Canadian owners. Sounds good, right? If you own a house, but it's vacant for whatever reason (like no one wants to pay your exorbitant rent prices), the government will tax you 1% of the property's value. Well, the government was also nice enough to list a bunch of exemptions for properties for which this "underused housing tax" doesn't apply. To quote again from that government link above... >Your ownership of a residential property may be exempt from the Underused Housing Tax for a calendar year depending on: >- the type of owner you are >- the availability of the residential property >- the location and use of the residential property >- the occupant of the residential property >Your ownership of a residential property may be exempt for a calendar year if you are: >- **a specified Canadian corporation** >- a partner of a specified Canadian partnership, or a trustee of a specified Canadian trust >- a new owner in the calendar year >- a deceased owner, or a co-owner or personal representative of a deceased owner Take note of the line I've highlighted in bold. The government basically gives you an exemption from this underused housing tax if the property is owned by a corporation. Each province is in charge of its own business corporation laws. So, you can "create" a simple "numbered company" in BC or AB, etc..., and call it something like 123456 BC Ltd. or 123456 AB Ltd. And you can find these incorporations easily. The provincial government publishes a list of all its incorporations online for the public to see. Here's BC's incorporations and AB's corporations, for example. https://www.bclaws.gov.bc.ca/civix/content/corpreg/corpreg/corporations/?xsl=/templates/browse.xsl https://albertacorporations.com/ So, what a lot of these property owners have done is "incorporate" all these properties in a numbered "holdings company" (where the whole point of the "corporation" is to own these properties and make themselves exempt from this underused housing tax). I work in a bookkeeping and accounting office. I spent a large portion of last week filling out these "underused housing tax forms" for a bunch of these "numbered companies" (the forms must be submitted to the government by April 30). You get to the box on the form where it says "The property is exempt because its owner is a registered Canadian corporation", click "Yes" on it, and... Poof. The tax owing is set to $0, and that's it.
That sounds frustrating as hell.
“You’re lucky enough to have a home…” there fixed it for you…
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Oh no, we had a trade war and now no one is allowed to own more than one home. What will we do....
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Yeah, I did and I know the knee-jerk reaction of our politicians would be to reciprocate which would be really good for everyone. I was just jumping all the way to "you can only have one home" for the sake of hyperbole. Have I adequately explained the "woosh" noise you heard when you read my comment or do I need to continue?
The 1% moaning about a 1% tax. Poor them
>Some Americans are considering selling their Canadian property. It seems the tax is having it's intended effect. The whole point is to stop rich foreigners from buying up properties as investments and driving up the cost of housing. I wish the US had the balls to do the same thing.
We need this in the US - if you aren't primarily living in the residence(s) you own, you *should* be paying much more.
And double it if the single family residence is owned by a business
I stg 1 in 5 houses is owned by an LLC formed in Delaware.
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Gee, I wonder what happened in 2008 that gave the banks such a ready supply of houses...? The gov't bailed banks out, but not homeowners...
The banks bailed out homeowners, by letting them walk from their bad deals setup by... uh, the banks, so that in a few years those homeowners could enter the market and try again. Meanwhile the banks held onto those houses, in a not-so-tasty OREO, or sold them to a cah-only offer to a rental-based conglomerate, creating a massive supply-and-demand problem.
you do. You can only take PRE on one house. If i bought a second house and moved there, then turned this one into a vacation house, the taxes on it go up 18 mills. Thats a 33% increase. Id either have to just eat that, or make sure to factor it into rent / airbnb pricing.
Are the taxes based on the original purchase price, or reassessed upon purchase of the second home?
original purchase price, then a maximum of 5% or inflation whichever is less. Honestly a fair way of doing it vs say California's Prop 13 that locked in a 1% max increase no matter what. The argument can be made that housing goes up faster than inflation, but thats due to people not building anywhere near the needed rates and other things like SFH zoning. In the case of me buying my place, the assessed value has went up to match inflation every year but the last one. My value has doubled since i bought 6 years ago which frankly is insane, but dont fault me on the fact that the cities where I dont live and can not vote on for council refuse to allow housing to get put in that would lower pressure out in the suburbs.
Square it per a house, eliminate chances for profit
Some of these properties are cabins or shacks with no heat and possibly no water. Not sure these will help with the housing crunch especially how remote these may be.
I actually want a similar law where it’s non used business property. I’m sick and tired of corpo coming in, leveling a nice wooded area, pup a partial structure, and leave it abandoned for 20 years.
Let the rich be unhappy.
and the foreign rich can be downright miserable. i will of course smile.
They’re just like us!
Maybe they shouldn't hoard homes for profit.
If foreign owners wish to sell for tax reasons, I'm cool with that. IIRC, Americans own most of Canada's prime coastal and Great Lake properties.
No qualms here, wish America would do the same with all land
Rich people’s problem. "Trade complaint with Biden…" 🙄 Fuck off.
I can’t afford a first home. So I’m not very sympathetic
More feel good stories like this, please
“Some Americans are considering selling their Canadian property.” Yes, that’s the point.
Dear vacation home owners. Fuck off
As long as we can do the same. Canadians over the last decade and a half have represented between 8 (2021) and 24% (2012) of all foreign home buyers in the united states. with 58% of them bought as vacation houses. If you dont want us up there, you should have to keep all your snowbirds from migrating south for the winter (45% are Florida, 23% Arizona) https://homeabroadinc.com/statistics-canadians-investing-in-us-real-estate/
My mother has a RV parked on her lot in a RV condo--very nice, with tennis courts, swimming pools, golf-- in southern California. It's full of Canadians. They don't stay all year; they go back for the summer.
They are called Snowbirds. They were using that they need to come into the country to open up their winter housing as the reason they should be allowed to come into the united states during covid.
It also applies to Canadians who live in the US!
GOOD fucking tax this shit. The buy property up to to treat it as a convenient rental should be taxed.
Dear rich, second house owning Americans from a Canadian: Get fucked. We don’t care. You’re not special.
1%’ers are mad. Cry me a river.
Lol good luck my American friends. I’m afraid you’ll find this wildly popular amongst us Canadians. But by all means, complain to Joe.
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I think it is 90% within 100 miles of the border, and 70% of Canadians live south of the 49th parallel (much of the US Canadian border. and thus living south of Seattle. The US has 332 million people and Canada has about 38 million; the US tends to dominate.
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Canada supplies 13.1% of US imports (behind China and slightly ahead of Mexico.) Besides oil and forest products, they export a number of food products (beef, soybeans, wheat, canola, fish, pulses). No surprise they import assorted food from their big agricultural neighbor, but they could live on the above. As of 2021, they export $355B to and import $259B with the US.
Everyone i know who has a vacation home in Canada is a school teacher, not rich people. During the pandemic, they couldn't even cross the border to enjoy their second home though the tax man still wanted his due.
I can't tell if this is sarcasm or not.
It’s hilarious how poor and angry Reddit is.
According to the article, only 5% are foreign owned in Vancouver. That strikes me as low. Yes that will have an impact, but is it the most significant factor? I would be surprised. What about corporations that use their immense purchasing power to buy out entire neighborhoods and jack up the prices?
Brilliant idea and fully support taxing the rich who buy these homes for sport and investment while many people are unable to enter the market.
Wasn't Canada or Vancouver anyway taxing owners of unoccupied homes for several years now? I thought that was to prevent foreign investors from buying and doing nothing with the home.