Without affordable housing, Vancouver risks becoming an economic ghost town • Hacker News Board

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#611

Post by pm24601 » Sun, Feb 14, 2016, 8:44 AM UTC

JoshTriplett wrote: post #471

toyg wrote: post #467

Earlier quoted context omitted.

But that's what inflates property markets -- investors buying and selling multiple properties, realtors identifying and driving growth in this or that neighbourhood. London, SF, Sydney or Vancouver are all awash in investment cash for properties, that's what drives prices. "In the context of property used as a residence", most European countries do not tax first homes, end of story. It doesn't stop prices from growin…

> "In the context of property used as a residence", most European countries do not tax first homes, end of story. I'm not talking about sales taxes on the sale price of a home; the US doesn't tax those either. I'm talking about property taxes, as in the taxes typically assessed by a local government to property owners as a percentage of the appraised value of their property. I'm saying that such property taxes produc…

> I'm not talking about sales taxes on the sale price of a home; the US doesn't tax those either.

Actually it is taxed as a capital gain ( subject to some deductions )

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#612

Post by yason » Sun, Feb 14, 2016, 9:06 AM UTC

webmaven wrote: post #600

yason wrote: post #576

Earlier quoted context omitted.

The taxes should indeed go up to optimize land use in general. If you have a house built in 1902 in the middle of a big city, you're paying minimal taxes and find yourself surrounded by high-rises, it's very inefficient land use. Your lot could provide housing for hundreds if not thousands of people if another high-rise was built there. Thus, you should either pay for your privilege (in taxes) or sell the lot (for a…

So, in what ways is land-value a better taxable asset than property-value?

Property value goes up if you build a bigger, better building on your lot so you might as well stick with the old one. That promotes stagnation and under-use: it might not make sense for an individual or a business to give the lot to better use and move further away to enjoy lower taxes if the location is not particularly important.

In contrast, land value goes up in the average if a lot of people keep building desirable buildings in what turns out to be a desirable district in the city. That promotes what people like. Consequently, inefficient land uses move further away from the desirable areas.

Implementing neither property tax nor land-value tax is not straight-forward in general and there are corner-cases that need to be sorted, but in general land use is what ultimately provides its value. Often property tax codes already incorporate parts of land-value taxing, but the intrinsic value of property to be taxed is debatable: what is the value (to the community) of a small, low-taxed detached house in the downtown versus a huge, high-taxed mansion outside of the city? The opportunity cost of taxing property might be huge.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#613

Post by eru » Sun, Feb 14, 2016, 10:28 AM UTC

iofj wrote: post #566

eru wrote: post #496

Earlier quoted context omitted.

Your primary owner-occupied residence is exempt from capital gains tax in Australia. If you put a corporation in the middle, that exemption might vanish? (I don't know too much about the legal shenanigans here.)

How does that work ? Do you have to pay capital gains on a house before you sell it ? The point of this construction is to never sell the house, so that might be avoided here as well.

Good question. I don't know too much about Australia. Only moved here two years ago and don't plan on staying long term.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#614

Post by 1stop » Sun, Feb 14, 2016, 11:56 AM UTC

oldmanjay wrote: post #392

1stop wrote: post #361

Earlier quoted context omitted.

Curious why you are getting down votes... Your post is good. Seems HN group think favours regressive tax?

There is a very enjoyable irony to the notion that you would accuse a community of groupthink for a perceived lack of accepting your opinion as the one true way.

The only opinion I was expressing was that of surprise the down vote for a perfectly decent comment, it seemed to be related to the topic, rather than the comment. I admit, the group think statement is a hypothesis, but not an unreasonable one given the circumstance.

There isn't really any need for smugness here.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#615

Post by thinkdoge » Sun, Feb 14, 2016, 12:13 PM UTC

ihsw wrote: post #228

personjerry wrote: post #94

Earlier quoted context omitted.

I don't see why we have to separate the two. It sounds like Vancouver faces both increasingly high rent and abnormally low salary for tech jobs (although I recognize that we might not expect Silicon Valley level pay).

It's not just Vancouver that's experiencing abnormally low salaries for tech jobs, all of Canada is. The brain drain is slow but inevitable.

slow? they're all flocking down south ASAP with TN, if they haven't already.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#616

Post by drpgq » Sun, Feb 14, 2016, 4:09 PM UTC

refurb wrote: post #367

drpgq wrote: post #291

Earlier quoted context omitted.

You just need to make it look like you actually are resident.

They ask for a list of trips you took outside of Canada and check that against your passport stamps. Canada has also started doing "exit checks". Not saying they always dig into the data to see if you're lying, but they could...

Wasn't there that guy convicted in NS recently convicted of facilitated PRs staying outside Canada? As a Bayesian, that makes me think it is pretty widespread.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#617

Post by stuxnet79 » Sun, Feb 14, 2016, 5:45 PM UTC

jbob2000 wrote: post #63

stuxnet79 wrote: post #16

Earlier quoted context omitted.

Toronto's transit is indeed pretty trash. I want to move down to the city but I'm split on whether to put in a down-payment for a condo or piss away my equity by renting. They say the condo market is very volatile right now. Not sure how true this is because I am not very well versed on the subject.

Hey there, I used to work in the condo industry in Toronto. If you had asked me 5-10 years ago if buying a condo was the right decision, I would have said yes. But now, absolutely not. What changed is the respect the builders have for the people buying and living in their buildings. 5-10 years ago, condos were a bit more rare, so a construction company had to try really hard to make their condo appealing. They worked…

Well, thank you for your perspective - I guess I won't be buying any property any time soon - or at least not until I do extensive homework. Thing is - as bad as the situation may look like now compared to 5-10 years ago - I'm just thinking of how much higher real estate prices will be 5-10 years from now. So if I want to reap any future benefits now looks to be the time. I just feel it would be really unlikely to get deals as good as we had a decade ago. I'd like for the bubble to just pop a little bit before I start thinking about purchasing a condo seriously though.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#618

Post by brc » Mon, Feb 15, 2016, 4:23 AM UTC

ScottBurson wrote: post #449

brc wrote: post #377

Earlier quoted context omitted.

It's even worse in Australia, which most properties do not have a yearly property tax. So you pay a 'stamp duty' when you purchase the property, based on a % of the sale price. This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for s…

> This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for so much stamp duty in one hit (easily 50-100k). I don't understand. When you're making millions on the sale of the property, how is 100k in stamp duty a problem? It's on the sa…

Because you can't trade like-for-like.

It's a tax on moving.

If you want to leave your 4 bedroom, 1 million dollar property and buy a 2 bedroom, 1 million dollar apartment, you have to forego 100k just to do this? Obviously most people choose to not move. They'd rather the money goes tax free to their kids, or to just borrow against the house and spend the money.

It's a strange attitude to suggest that paying $100k to the government is 'not a problem' just because your house is worth more. If you were in the same position I think your attitude would change somewhat.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#619

Post by brc » Mon, Feb 15, 2016, 4:34 AM UTC

JoshTriplett wrote: post #443

brc wrote: post #377

Earlier quoted context omitted.

It's even worse in Australia, which most properties do not have a yearly property tax. So you pay a 'stamp duty' when you purchase the property, based on a % of the sale price. This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for s…

This sounds like an excellent argument for getting rid of property taxes altogether. Property taxes have some major fundamental problems, not least of which that using them to pay for local services tends to make such services better in more affluent areas and worse in less affluent areas. They produce potentially unbounded and unexpected expenses long after paying off the house itself (which impacts retirees and oth…

I am not a proponent for taxes, most of my arguments centre around the idiocy of most taxes. And you are correct in your analysis, particularly as the improvement component on the land is already taxed by sales taxes for the materials and income taxes for the labour.

However, it's best to tax broadly and close to the generation of income.

I think land taxes couples with sales and income taxes is an efficient combination. Land taxes penalise land banking, and encourage the most efficient use of land.

Sales taxes penalise consumption, and encourage savings or investment.

Of all, income taxes penalise earnings, but earnings are unavoidable for most people. But they do incentivise investment income where there is a differential, which could be mildly beneficial.

The key to all these is uniform applicability and flat rates. The massive drag that tax minimisation has on an economy is underestimated routinely.

From the property front - land taxes should be paid annually, there should be more releases of land with fewer restrictions, and there should be no/minimal transaction taxes to go in/out of a property.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#620

Post by Arnt » Mon, Feb 15, 2016, 12:17 PM UTC

Grishnakh wrote: post #586

Arnt wrote: post #553

Earlier quoted context omitted.

It does, actually. The police, like all the other things the city does, needs buildings for its work and housing for its employees.

No, it doesn't, actually. The police can get their money from the property tax for any new residents who have built new houses. If there's no new houses, then there's no net increase in population, and there's no need for more police, or more police buildings.

Needs change and buildings age.

The City of New York is just building a new police station in an area that's been fully built up for roughly 150 years. http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-... I expect the Vancouver police department also ends up paying its officers extra to cover the boomtown rents.

(Not just police, of course. All public services.)