Real estate in Calgary - another bubble?

[The Yen Man]

Originally Posted by blankall

As most working young adults can no longer buy detached homes, the economic scheme in which we support the associated costs with those detached properties needs to change. Property taxes are not high enough.

Sure they paid for the houses....now what about the ongoing costs for maintenance of the infrastructure required to have that house. Made sense when most working people were going to have houses to pay those expenses from income. Now that they are not going to own houses, what exactly are they paying income taxes for?

I don't understand what you're getting at. They are already paying more, as a detached house's market value is much higher than that of a condo, and so they're paying a higher portion of property taxes as determined by house values.

Are you suggesting we up the mill rates for houses so they pay an even higher proportion of property tax?

[blankall]

Originally Posted by Fuzz

Aren't all city services covered by property taxes(other than provincial gifts to cities?) Aren't we already paying for these services?

I don't disagree. We just need to increase property taxes and decrease income taxes so that more of the city services are covered by property taxes.

[Fuzz]

Originally Posted by blankall

I don't disagree. We just need to increase property taxes and decrease income taxes so that more of the city services are covered by property taxes.

But aren't they already funded that way?

*Googles*

Municipal property tax dollars make up about 50% of The City's annual operating budget. The other half is collected through user fees, permits and licencing, grants to name a few.

https://www.calgary.ca/our-finances/...financialfacts

So do you want more property taxes and fewer user fees? I don't know where income tax comes into this.

[you&me]

Originally Posted by Bill Bumface

I get 50' of sidewalk, road and maintained alley to let people move around my hunk of land, dedicated sewer and water hook-ups, yet the guy down the street in the fancy penthouse condo in the 100 unit building pays more in property tax than me.

Isn't that a bit ridiculous?

There's all sorts of oddities with property taxes.

The 80 year old widower that's been in the same home for 50 years pays the same property tax as the young family in the new build in some far flung suburb, even though the widower's infrastructure has been a sunk-cost for decades and the young family will be getting interchanges, and parks, and fire halls and all sorts of infrastructure heaped on them that they haven't paid for yet...

Or what about the family of 5 living in a large house that pays 4X the property tax of the single guy living in a townhouse a few streets over... They get the same garbage and green bin pickup, even though the family pays 4X the tax and could use more capacity.

The property tax system isn't perfect, but it's the best we've got... Could it be improved? I suppose so, but the idea of making the taxes punitive to the point of forcing people from their home, or devaluing the real estate otherwise, is ridiculous.

[comrade]

Originally Posted by you&me

There's all sorts of oddities with property taxes.

The 80 year old widower that's been in the same home for 50 years pays the same property tax as the young family in the new build in some far flung suburb, even though the widower's infrastructure has been a sunk-cost for decades and the young family will be getting interchanges, and parks, and fire halls and all sorts of infrastructure heaped on them that they haven't paid for yet...

Or what about the family of 5 living in a large house that pays 4X the property tax of the single guy living in a townhouse a few streets over... They get the same garbage and green bin pickup, even though the family pays 4X the tax and could use more capacity.

The property tax system isn't perfect, but it's the best we've got... Could it be improved? I suppose so, but the idea of making the taxes punitive to the point of forcing people from their home, or devaluing the real estate otherwise, is ridiculous.

These 'examples' are weak. 50 year old neighbourhoods have plenty of maintenance and replacement work, not to mention that salaries need to be paid every year. Garbage pick up is pretty much all paid for by user fees, in Calgary at least.

I think what Blankall is trying to say is that low density residential is a net negative on city finances, and that if it isn't filled up with families raising children, then maybe we should re-evaluate whether it's worthy of subsidizing.

[you&me]

Username checks out.

[stampsx2]

Personally i think we will be moving into multi generational mortgages for detached houses like other parts of the world have. House prices just won’t be able to be paid off by one generation.

Fast forward into the future and I’m going to guess in ten years people find condo’s for $250,000 more appealing because at least they can be paid off in a lifetime.

[Winsor_Pilates]

Originally Posted by CorsiHockeyLeague

I mean... I saved money, bought in late 2016, found a good deal, paid my mortgage, made a long-term bet on a renewal, and am finally about to be able to reap the benefits of all the work it's taken to get me to that point... and now Blankall is saying that the moment my head's getting above the water he wants the system to change to step on my head and put me right back under?

Boomers sitting in their yards with their free and clear titles aren't the only ones opposed to that sort of change.

You didn't know you were joining the evil empire when you become a home owner?
Someone should have told you, you'll now be the bad guy for the rest of your life.
Get used to eating the blame.

[blankall]

Originally Posted by CorsiHockeyLeague

I mean... I saved money, bought in late 2016, found a good deal, paid my mortgage, made a long-term bet on a renewal, and am finally about to be able to reap the benefits of all the work it's taken to get me to that point... and now Blankall is saying that the moment my head's getting above the water he wants the system to change to step on my head and put me right back under?

Boomers sitting in their yards with their free and clear titles aren't the only ones opposed to that sort of change.

And how much did your proper increase in value over the last few years, from you not doing any work and just sitting on the property. I guess you're just "lucky"? And anyone who happened to have the bad luck of being born later...well that's just tough.

If that same property cost twice the price when you bought it, would you have still been able to buy it?

[stampsx2]

Originally Posted by blankall

And how much did your proper increase in value over the last few years, from you not doing any work and just sitting on the property. I guess you're just "lucky"? And anyone who happened to have the bad luck of being born later...well that's just tough.

If that same property cost twice the price when you bought it, would you have still been able to buy it?

How do you feel about people investing in rrsp’s or mutual funds?

[you&me]

Originally Posted by comrade

These 'examples' are weak. 50 year old neighbourhoods have plenty of maintenance and replacement work, not to mention that salaries need to be paid every year. Garbage pick up is pretty much all paid for by user fees, in Calgary at least.

I think what Blankall is trying to say is that low density residential is a net negative on city finances, and that if it isn't filled up with families raising children, then maybe we should re-evaluate whether it's worthy of subsidizing.

You're making two different arguments.

First of all, the maintenance and replacement work in a 50 year old neighbourhood pales in comparison to the costs associated with providing services to a new area on the fringes of the city. Roads, new schools, EMS, interchanges, etc are potentially billions of dollars... replacing some aging sewer pipes and cracked sidewalks is hardly a fair comparison. Nevermind that, in Calgary, almost universally, property values increase the closer in you go, so the older, closer in communities are likely valued higher, and actually paying at least the same (if not significantly more) in value-based property tax.

Raising property taxes on single family homes will not have an affect on affordability, as the highest priced homes will be able to absorb in the increase; it'll be the increase in taxes to the starter home that might mean the difference of pushing the housing cost beyond the reach of some buyers... Tough break I guess, right?

If I understand you correctly, the second argument is that single family homes are OK, as long as they're inhabited by families... Like, are you proposing a vacant bedroom tax? Or underutilized square footage tax? How many SF per person is suitable, comrade? ()

For what it's worth, I think the city should be looking at ways to curb sprawl and make it less appealing. As long as it's the most affordable option for most people, it will continue to spill out and push Calgary's boundaries.

[woob]

Post pandemic, there may be a lot of older individuals who prefer staying in their houses/condos, instead of going into an old age home, where they're more than likely to get wiped out by the next pandemic.

[blankall]

Originally Posted by stampsx2

How do you feel about people investing in rrsp’s or mutual funds?

We've created limited tax exemption rules for RRSPs and you don't need to have a massive downpayment to invest in them. With housing, there's a massive barrier to entry, which is becoming more and more controlled by who your parents are.

If RRSPs rules only let people with $200+k in cash invest and there was no limit on the tax exemption for them, most people would say that was downright injust. Now imagine, we weren't talking about RRSPs, but something you needed to survive, like housing. Now imagine that you couldn't have children without supplying them with adequate RRSPs.

I'm assuming because Calgary is only at the beginning of this process, a lot of people here aren't seeing the reality of how this plays out yet. It only gets worse. I'm also betting a lot of posters in here, given the age demographic, already bought property several years ago and are pretty happy with the $200-300k in tax free net worth gain they have acquired (they will probably say "earned") over the last few years.

[Weitz]

When did you need $200k+ cash to buy a house?

[BlackArcher101]

Originally Posted by blankall

We've created limited tax exemption rules for RRSPs and you don't need to have a massive downpayment to invest in them. With housing, there's a massive barrier to entry, which is becoming more and more controlled by who your parents are.

Don't RRSP's require the same thing.... money.... to invest in them?

Unfortunately for me, I put RRSP's off to buy a house (can't have both, not a perfect world) but I guess I'm one of those lucky people that got to see my house go up a whopping 20% in 10 years, so therefor I don't deserve what I got. So tax me on it and kill my investment eh?

[blankall]

Originally Posted by BlackArcher101

Don't RRSP's require the same thing.... money.... to invest in them?

Unfortunately for me, I put RRSP's off to buy a house (can't have both, not a perfect world) but I guess I'm one of those lucky people that got to see my house go up a whopping 20% in 10 years, so therefor I don't deserve what I got. So tax me on it and kill my investment eh?

Yes money....you can invest $1 in an RRSP and you're off to the races. With housing the initial threshold investment is getting higher and higher everyday.

You should pay taxes that reflect the actual cost of supporting your detached home, yes. If you're going to make the libertarian argument, I also assume you don't mind privately paying to pave the road to your house, the sewer system, garbage disposal, mail, etc...plus you'll be handling your own security from now on. No public police or justice system.

[blankall]

Originally Posted by Weitz

When did you need $200k+ cash to buy a house?

Maybe $150k....for now. There are very few house in Calgary listed below $600k and most houses are going for over asking right now. Calgary is somewhat unique in Canada, in that prices are still somewhat inline with wages. That is changing quickly though.

[BlackArcher101]

Originally Posted by blankall

I also assume you don't mind privately paying to pave the road to your house, the sewer system, garbage disposal, mail, etc...plus you'll be handling your own security from now on. No public police or justice system.

what? I literally pay taxes and utilities just for that. And a lot of the infrastructure was paid for by the developer at the time of the build and put into the cost of the home. So I'm paying maintenance for that system via the city, just like anyone else.

Originally Posted by blankall

Yes money....you can invest $1 in an RRSP and you're off to the races. With housing the initial threshold investment is getting higher and higher everyday.

Yes, but I chose to save up more than $1 and put it into a home instead of an RRSP, but you think I should be penalized because I chose the home.

[Weitz]

Originally Posted by blankall

Maybe $150k....for now. There are very few house in Calgary listed below $600k and most houses are going for over asking right now. Calgary is somewhat unique in Canada, in that prices are still somewhat inline with wages. That is changing quickly though.

You need 25% down payment to buy a house now?

[you&me]

What a strange conversation...

Taxing old ladies out of their homes because they don't have kids at home any more?

$200k down payments like it's the norm

RRSPs vs. the only leveraged investment most people have, or are willing to access.


I get that blankall is looking at this through the lens of Vancouver real estate and in that sense, it's understandable he'd have the opinion that drastic measures need to be taken... But LOL at anyone wanting to or thinking the same heavy-handed measures should or need to be applied to Calgary... Sure, things can be tweaked and made better, but let's not lose sight of the fact that blackall is looking at this from the perspective of living in one of the most over-valued, least affordable markets in the world.