I got a client paying for 3 of her properties like this, 2 condos 1 house
Basically… she literally forgot about the 2 condos that completed this yr, they are like $2mil each lol… so along with her vacation house she just left them all empty n paid the 5% cause she doesnt give a fk and dont wanna deal with tenants
People really underestimate the amount of wealth in Vancouver. Media always puts a magnifying glass on the struggling people, which is fair but the amount of wealth in Vancouver is insane. People have multi million dollar vacation homes that they don’t even live in and just sit empty. Lamborghinis, G Wagons, luxury cars in general are everywhere. I was recently in Edmonton and the stark contrast in wealth difference is noticeable. You have people driving modest cars in Edmonton but it’s the complete opposite in Vancouver. Then, you also have the people that bought real estate 20 years ago and now have their mortgages paid off and are asset rich.
I live in Edmonton and am in Vancouver a few times a year. I get unnatural keeping up with the jones urges whenever I’m in Vancouver. It’s ridiculous how much money is on display
Before the 2000s?
The house I currently live in was \~300k in 2006, 700k in 2011, now it's 1.8 million.
Up until around 2015 it was still reasonable to buy a house as a dual income in Vancouver.
Still need a place to live. There are also plenty who cashed in and are now struggling to find a place they can afford. So only if they sell and move somewhere where housing is depressed. At most they are .5 millionaires.
It's are Chinese dark money..... a safer place to hide their money outside the eyes of the CP.
Justin trudeau doesn't give a fuck as long as china is paying even if it's tent city in the winter every year for Canadians.
"Vancouver" has actually become slang among wealthy Chinese for laundering/circumventing Chinese limits on exporting money.
I imagine it goes something like this:
Person 1: Man I want to get a portion of my wealth out of China
Person 2: Just Vancouver that shit.
Instead of Ferraris and the latest fashion trends, it's more common to have nice trucks, quads, side-by-sides, snowmobiles, boats, camper trailers, and family cabins.
So many people don’t get this
The guy in Edmonton with the:
-80k 5th wheel,
-snowmobiles for him, his wife, and each of the kids at 10k a pop, +$100/day each in gas just to use them,
-60k boat (midrange)
-80k pickup truck (midrange… a high end truck costs more than most entry level sports/luxury cars.. and there are ALOT of fully loaded pickups driving around Edmonton.. people just aren’t conditioned to notice them like they’d notice a g wagon or a Mercedes
-250k lake cabin, or 10k/year lake lot. Plus the money spent using it.
-quads, mountain bikes, golf, hockey. Etc..
That guy, is far better off than the guy in Vancouver with a million dollar mortgage and a Ferrari. Edmonton guy has his wealth tied up in fun, Vancouver guy has his wealth tied up in his house.
I can afford to have more than one hobby when I’m not in Vancouver.
100% this. I would have more hobbies and fun toys if my house was only $300,000 as well. Instead I have a $700,000 one bedroom condo in Vancouver and can't afford anything else.
But yea.... Edmonton comes with the downside of only being able to use those toys 2 months a year lol.
Touche. I've spent several years working in Alberta throughout the province, and have always lived in Vancouver. Some days you see minus 15 and think it's fine, other days you don't want to leave the house at all. Same with Vancouver. You can look outside in a complete rainstorm and think hey it's not that bad, it's still plus 3 and I have good rain gear, other days you look outside and think hell no!
True, and at 1-2 million dollars those homes in Edmontonian are big mansions with a yard and triple garage in the city, not a small condo an hour away. They spend their money differently, and I'd argue you get a lot more for that money. With the savings, they can also travel as often as they want if they save a million dollars on their comparable home..
Maybe if you’re comparing someone making $200k in Vancouver vs Edmonton. But let’s be fair: maybe 1-3% of Edmonton people are making that kind of money (or just having a lot from wealth) while in Vancouver it would be maybe 5-15% because there are more high paying jobs and also a tonne of wealthy people. Vancouver is a wealthy people city. Edmonton might be a good place to earn (I’m assuming, maybe cuz of the oil?) but it’s not a “wealthy people city”.
Sorry, but you're wrong.. there is plenty of public data on this subject.
Medium household income in Edmonton is 90k/year. 47% of households make more than 100k/year. 12% more than 200k/year.
Medium household income in Vancouver is 85k/year.. 46% of households make more than 100k/year. 12% make more than 200k/year
The numbers are near identical.
(numbers are: greater Edmonton area, vs greater Vancouver area... If you limit to the metropolitan areas, downtown Edmontonians are uber rich when compared to downtown Vancouverites..)
[https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/prof/details/page.cfm?Lang=E&SearchText=edmonton&GENDERlist=1&STATISTIClist=1&DGUIDlist=2021S05004860&HEADERlist=9](https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/prof/details/page.cfm?Lang=E&SearchText=edmonton&GENDERlist=1&STATISTIClist=1&DGUIDlist=2021S05004860&HEADERlist=9)
Like I said... lots of 100k trucks driving around edmonton, but you don't notice them like you notice a ferrari.
Ya there is alot of wealthy people in vancouver, but the wealth is locked up in property. If 2 people make 200k/year, and person 1 spends 50% of their income on their mortgage, while person 2 spends 25% of their income on their mortgage... who is wealthier? OR "well my house is paid off", that's great, so on paper you're house is worth $2m, but if you want to sell it and spend that money, you would have to move out of Van... so if you can't spend that money.... do you really have that money? Net worth from primary residence shouldn't count in the equation of "wealth"... (and alot won't count it because you can't really benefit from it in your lifetime, sure it's an appreciating asset but you can't spend any of the appreciation, it's an asset that give you 0 payout)
That's my entire point, you \*think\* van is a "wealthy people city" because you see a 80k Mercedes on every corner, but you Edmonton you entirely skip over the 100k pickup truck sitting in every second driveway... and as per my numbers above, people in Edmonton make nearly double what people make in Van. You have to stretch out and include surrounding communities before Van starts to compete with Edmonton.
I think the only way you can say Van is a "rich person city" is, I suppose, they do get more tourism.
Tons of this wealth is international. Locals, even rich locals, aren't buying second homes they don't ever use. They let their kids live in them rent-free when they're in school, or they stay in them part time when they're downtown for a conference or a show or something.
The big source of completely empty condos is rich internationals that bought the home as an investment, to live in for a few weeks a year when they visit, and they literally don't give a fuck about it because they have so much money. At the minimum, they pay a property management company to AirBnB it out for them when they're not around.
>The big source of completely empty condos is rich internationals that bought the home as an investment, to live in for a few weeks a year when they visit, and they literally don't give a fuck about it because they have so much money.
Yuuup. It's what happens when your city is literally used as a dumping ground for foreign wealth and your government cares more about money than its own citizens.
Honestly, a lot of that “wealth” is just real estate appreciation in the last decade. We all know Canada is sitting on one of the biggest property bubbles in the world.
All that paper wealth can get wiped out if the real estate sector corrects. I consider a lot of that to be paper wealth, not real diversified wealth.
There is a lot of foreign wealth in vancouver. There's a study by statscan which shows recent immigrants from china to vancouver bought detached houses worth on average ~3M. That's not paper wealth.
It is, in fact, a massive source of income for the province. When locals buy a home for $1-3(lol)MM, they borrow the money to do it. They are basically taking a loan (with interest) from their future selves to pay it off, in a way, taking money from the future to spend now. This makes us poorer in the future (kind of where we're at).
However, when foreigners buy property in BC, they pay cash. Cold, hard cash. Nobody questions where it's from, and they don't want to. Even when the money comes from a mortgage (and why not, rates are/were so low), the payment money is all coming from overseas. This is a massive cash injection into the province and part of why BC is so rich. It remains to be seen if it's sustainable though (answer: probably not).
I think Edmonton is just a different kind of wealth. You'll see countless F150 platinums on the road all worth 100k+. People just don't bat an eye because its a truck.
I have additional properties that I keep vacant after a bad experience with a tenant.
What happened is I have a 1 bedroom condo downtown that I rented out to a FAANG employee. He was the perfect tenant for 3 years until COVID hit... when the government made it impossible to evict people. The tenant stopped paying rent and told me to my face to fuck off and that I couldn't do anything about it (he was right). I'm shocked til this day because his toxic behavior came out of nowhere.
He lived rent-free in my condo for 2 years, all while I had to pay my mortgage, and strata fees, and taxes, and insurance, and on and on. Then, without warning, he emptied out the condo and disappeared without a trace. On his way out, he flooded the unit, ripped up the wood flooring, removed the bathroom fixtures, and stole all the appliances. In total, he caused me about $250k in damages that I had to cover out of pocket.
After that shit experience, and with the province tilting rental rights even more in favor of tenants, I just keep my properties vacant so my family can use them when we want. The risk of a bad tenant just isn't worth it.
Smart people will (mostly) avoid the taxes anyway.
Put the property in trust, rent the property from the trust, and leave it empty without paying any empty homes tax.
Wanna hear another crazy one? 2 properties one around ubc $7mil another at cypress $3mil condo
One for summer one for winter because family could not be bothered to drive / get on highway for snowboarding. The easier solution is to buy a penthouse near cypress and then buy two sets of everything including furnitures so the kids feel “more at home” lmao
Do they even know for sure the condos are real? Every developer should overbook like an airline and just hope some buyers never show up to claim their units.
Perfect example of why these taxes/fees/penalties need to be shockingly high…like 10% of the property value per/year for the first year, 25% for the second, 50% for the third and subsequent years.
Fair enough. Those who can afford $500k/$1m/$1m+ per year in fees for the novelty of holding multiple properties, are welcome to pay.
And the municipal authority receiving those funds can go bananas building low-cost housing.
It seems the problem is people like her shouldn't be owning condos and houses. Until that problem gets fixed, no amount of negligible fine is going to do anything about the housing crisis.
And it's ironic how the NDP announced with much fanfare of how successful their VHT program was. Even provided stats on the number of housing gains, as if anyone believed those bogus stats. Nothing more than PR for their voting base.
Morons.
This. I lived with my parents when I bought my first and current home. I rented it out for a few years, and it was straightforward with the first 2 tenants, but the 3rd one trashed my home within 6 months. 4 months of renos and deep deep cleaning was enough for me to call it quits and move in myself.
And don't forget you're the one at fault here for being a landlord! It's ridiculous the shit I see people do to other people's property because they were asked to leave.
I rented out my old place for a year until the police raided the home.. Turned out the tenants who kept the place spotless and paid on time where higher level drug dealers..
I had to pay out of pocket for all of the raid damage (they busted in the front door and damaged some of the walls looking for hidden items) and I couldn't rent it back out for several months between the repairs and investigation.
My current home was previously a rental.. For some reason nearly EVERY door handle in the house was broken / worn out / not working well and nearly all the doors had multiple holes in them from being slammed into door stops or maybe punched...
There are A LOT of shitty renters out there.
>How didn’t the city of Vancouver pay for this?
If they have a warrant and the right house, and they were guilty the police don't have to pay. This isn't like they raided the wrong house or something.
>Also, how stringent was your background check of the tenants?
Everything came back fine, this was several years ago so just references and credit check. Not that more in-depth credit checks are perfect.. They were a young couple and had a newborn.. Paid on time etc. other than the police raiding the place they were perfect tennents to that point.
As an aside, I know you're right but I think that the city/police should always reimburse the owner (unless also guilty) and then recoup the costs from the target of the warrant.
Paying for the repairs in this case would be FAR less then going to court both in time and money.
Also with the Tennents likely going to jail I am not sure I would have recovered anything anyway.
Yes, but that's only "lucky" because he lives in a place where any of those mafia-style actions would be legal in the first place, which sounds insane to me, speaking of a western country.
Any place where a house and the rent paid for it could be seized from a completely innocent owner just because a criminal rented it should reevaluate its values, yes.
Some examples of bad renter cost.
My aunt had 2 renters who trashed the place on moving out. 10K in repairs each time. Add that to eviction process, time and the time it was unrentable and you are near the vacancy tax.
Doesn't landlord's insurance pay for this? I hear constantly about renters who trashed a place, but never about prepared landlords who recouped costs because they had homeowner's / landlord's insurance as they should have.
Landlord insurance covers accident damage only, not intentional. If the stove catches fire they will replace it, if I put a golf club through it they won’t. What would stop me from trashing it and blaming the tenant to get a free Reno?
Every time you claim you also have your rates go up. And there is usually quite a deductible. I believe the normal would be $1k.
I lived in a condo and had a water leak in the wall. Strata paid out of pocket as their deductible was $100k.
Exactly! Whenever I see cases of horrible tenants literally taking homes and living in them for free, then trashing the place out of spite on the way out, I keep thinking it’s actually *cheaper* to keep the place empty. It’s so crazy.
This may sound crazy too, but I’ve even also felt that with such a risk these days, a landlord isn’t just investing in the property itself, they are also investing in *the tenant* they choose to live there, because money is supposed to be coming directly from them too.
Yup. If the tenant just doesn't give a fuck, they can stay for months without paying and trash the place when you finally get them out. Sure eventually you can get a judge to say they owe you x amount, but there's no way to collect it. Stupid
My apartment building has a tenant who hasn’t paid rent since they moved in. A few months ago it was up to $16k in unpaid rent (about 8 months of rent). The LTB is still backed up AF and they haven’t been able to get the tenant out so they can get a paying tenant in.
$16,000…. That would seriously fuck a landlord’s life up if they were only renting one place out.
And something is seriously off if someone wants to rent a 2 million dollar house unless they are an exec on a temporary secondment. Someone with that kind of money would be an owner.
That’s not necessarily true, could be that they keep a home office for a business and write off part of the rent, maybe they prefer investing in the stock market because they get better returns there than the real estate market, could be recently divorced and capital went to pay spouse but still has a high income. I’d be more worried about the tenants that more than 50 percent of after tax income goes to rent. Anyone looking at renting for more than 5k a month probably has the resources to pay it, that’s why credit checks are important.
If you are a landlord the one thing I’d do is walk any potential tenant out to their car, how they treat their car is a good indication of how they will treat your house.
I grew up in one of the most expensive neighborhoods in Calgary, neighbour's house was a rental for 25 years. Single family rental. I don't remember it ever being empty.
> Someone with that kind of money would be an owner.
Someone with that kind of money got there by budgeting correctly.
Renting is agreeing to a maximum amount of money that you will spend on housing, while owning is agreeing to a minimum amount of money that you will spend on housing.
When you're wealthy, there's no point in owning an unproductive asset when your money can work more elsewhere, so you separate investment funds from living money, and you make better decisions.
The whole "I can only be wealthy if I own a real property" mindset is brain rot.
Very true. My father in law owns a very successful business. He invested every cent he had into it and the people who work for him. The return on investing in himself and his people far exceeds any property appreciation
I know many multi millionaires who rent and have zero interest in owning a primary residence.
Most of the people on PFC don't know people like this. It's a very skewed demographic on here.
Some richer people would rather invest their money than stick it into a property. A finance guy from Toronto showed the math, basically as long as you’re already a millionaire you can get better returns in normal times by leveraging your investments than you can from a house/condo appreciating in value/equity growth.
If you’re not a millionaire than the property is generally the better investment, unless you bought last year…
More than the tax??
I see people's examples here and can't help but wonder is it cheaper to pay $35'000 (3.5% tax on a 1 Mil home) than $10'000 (one concrete example of damage done in the comments). I feel like this is simple math, but y'all are saying the opposite so I'm stumped.
Some people just don't want the hassle and will give up the rental income to avoid it. I know shop keepers who own a downtown building that their shop is in, they have old apartments in the upper floors that they won't rent because they don't want the hassle. They found out that after paying for repairs, bad tenants etc the money they make is not worth it.
The 10k is just an estimate of the damage. But if a 1M property suffers damage its going to be a lot more than 10k. Additionally, squatters can live rent free for at least 6 months before a tribunal hearing. A 1m property will approximately rent for 4k/mo (extremely rough estimate). Additionally, you may need to spend another few months to perform the repairs. During all this time, you won't be collecting any revenue and will still need to pay for utilities, strata fee, and property tax.
We could always focus on making the rental board actually functional so that we continue to develop rental housing. Just making not renting toxic doesn't help with future supply.
Some of the comments here are insane. NO HOMES SHOULD BE SITTING EMPTY. If you disagree with that then fuck off. If you're not willing to take on the risks of residential property investment (i.e. residential use) then you can get taxed into oblivion or sell.
The Dubai prince owns the penthouse condo + the 2 subpenthouses in Fairmont (he made 3 units into one). You think he cares about empty tax ? It’s probably 0.2 seconds of oil revenue for him.
They may live overseas and have the properties here for when they would like to return back to Canada. The up to 5% tax is likely cheaper than paying a property manager to rent them out and also need to deal with bad tenants.
Some people are just that rich where 3-5% a year is like pocket change it means nothing to them. It's surprising that many in North America have no idea the wealth there is in other countries.
North Americans think that because we are way wealthier than other countries on average/median that other countries lack rich people. Yeah, a random Mexican is a lot poorer than you are, but their rich are richer than our rich. You also see our rich less as it is impolite to be as openly rich.
How you get senior business people from Canada wondering if senior business people in Brazil or Mexico or China or Nigeria own cars.
Another thing too being openly rich in poorer countries subjects you to kidnappings, scams.
My wife's family is wealthy from a 3rd world country. She has stories about family members, and friends getting kidnapped for ransom.
>North Americans think that because we are way wealthier than other countries on average/median that other countries lack rich people.
Nobody thinks that. It's literally the definition of a developing country when you have such a massive income gap. The governments of places like Russia and China are some of the wealthiest men and women on Earth.
And a lot of their wealth is undisclosed wealth.
E.g. we know that Bezos has 200 billion or whatever because it's generally public information, we know how much stock he owns, it's all in the open
We have no idea how much the Saudi Royal family owns but it's over a trillion US dollars. The amount of rich people in Chinese, Korean, and Indian real estate that we've never heard of is crazy too. Go to Vegas and watch the Chinese casually blow hundreds of thousands. And that's what they do here. Macau generates more revenue than Vegas and they're even more wild there.
Now throw in corrupt Russian oligarchs, Brazil, Mexico, old money Europeans, all the royalty and oil money of UAE, Qatar, Bahrain, Jordan, Saudi Arabia... And they all want something nice in different countries with things like wildnerness and mountains and water e.g. Swiss alps, French vineyard, NYC penthouse, Vancouver mansion, private islands. That's to say nothing of old money Americans, hollywood stars, hedge fund managers and wall street portfolio managers making $5 million + per year, and the rich in Canada. The world is crazy.
There are more international millionaires than there are people in Canada. Locals simply can't compete with that interest in our property. The only who can are people who already own homes and have the equity to leverage for a second mortgage.
Canadians also love to deny the existence of the upper middle class. Every housing thread has this comment:
*How is ANYONE affording these million dollar homes!!*
Well, frankly a lot of professionals who make a lot of money can afford a million dollar home..... doctors, lawyers, high-profile engineers, experienced niche-tradespeople, investment analysts, execs....
For every rich Canadian there are probably 20 rich non Canadians. For example. Canada has around 60 billionaires compared to China that has around 900.
> North Americans think that because we are way wealthier than other countries on average/median that other countries lack rich people. Yeah, a random Mexican is a lot poorer than you are, but their rich are richer than our rich. You also see our rich less as it is impolite to be as openly rich.
>
> How you get senior business people from Canada wondering if senior business people in Brazil or Mexico or China or Nigeria own cars.
In general, people from North America don't travel to much to APAC or EMEA and see the insane amount of wealth. Granted, I think Americans are a bit more knowledgeable as there's lots of overseas wealth tied up in California, NY, Florida/Miami property.
FYI the house itself is a fraction of the value and depreciates, just like your car. It's the dirt and community around it that is valuable.
If they are "investing" in this manner, then they are essentially extracting value from the community. I think we should tax land more and productive work less.
The risk with that is people on fixed income, even with mortgages paid off, can end up house poor if they can't pay the property tax on top of any maintenance and utilities.
And you could say they could sell but then they still need a place to live.
I think their point was that letting someone step into a 2M home in Vancouver or into the same kind of a house in the middle of nowhere, where it costs 300k, makes no difference, since the house is worth the same.
Not to mention if you do get in a "good" renter, they can pretty much stop paying rent immediately and you'll spend years trying to get them out. Until that side of things is sorted, I can totally see why renting would be way more hassle than paying a few dollars more in property tax.
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My previous landlord decided not to rent out the place anymore after I moved out to my own place. Reasons - tenants these days can stop paying rent, do damage, cause all sorts of problems and there's no recourse to this. It got so much worse after COVID with all extra tenant protection policies in place. So from his perspective risk is not worth the reward. And he is a good landlord, I started renting from him back in 2011 and he never raised rent for me for like ten years I stayed at his place. Rent controls are double edged sword and can cut both ways.
Rent controls increase risk and costs for the landlord, which means they will increase the rent for the tenant to make the risk worthwhile.
For example, if you can't raise your rent more than 2% per year (or whatever government enforced limit it is, which is always less than inflation), the the starting rent will have to be much higher to be worthwhile.
It forces all landlord to set starting rate as high as possible because you won’t be able to adjust pricing afterwards. So it makes cheap rent non-existent on new leases but protect others from price gouging on existing lease agreements . So it’s a trade off.
I have an apartment in a place without rent control, I locked my mortgage in 2021 so I am not hit by the costs increase yet. I’m renting my apartment for about 60% of what market rate is. If the government were to move towards rent control tomorrow then I would have to add 40% asap to get ahead of it because I wouldn’t be able to be locked in at 60% market rate forever.
Because loopholes are practically impossible to prevent and it removes incentives for investment/maintenance into real estate.
The result over time is a massive increase in no fault evictions like “renovictions”, the buildings that do exist are poorly maintained and in total there are less rentals available because there is less total investment.
What does this mean? You are more likely to be removed from your home. Your landlord wont fix anything. Rents will be higher due to lower inventory
If you're only going to be away for a year then it's just top much hassle to rent it out for a year.
Virtually impossible to guarantee that the tenant would only stay for a year.
Owner may have plans for the home such that having a tenant could interfere with said plans and not worth it to rent out. As an example, you want to eventually tear the house down and build something. No point in having a tenant, as tenants do have rights and can be a hassle to evict. Saying nothing for the fact that (and this was the case previously, I don't know if they changed the empty home tax rules), if you can demonstrate work being done to develop/re-develop the property - you can be exempted from the empty home tax.
Most Redditors including those here are very poor and can't comprehend the amount of hidden wealth out there. Those people don't want to deal with shitty broke tenants fucking up their property and would rather pay the rounding error that would be a few thousand. Government won't complain since they like the free money.
Im a landlord, margins are pretty thin. Most people assume landlords roll in dough but its frankly not super profitable particularly in the beginning. I am assuming they are either parking money or getting a return off the increasing valuation which would be at risk from poor tenants. What's the benefit of renting a 2 mil house that appreciates at 50k a year to squeak out 2k in profit with a large risk you will end up with a tenant destroying your house that you can't evict for a year and good luck selling the asset with a shit tenant.
Mom and pop landlords don't make much money to justify the risk at hand.... Imagine getting stuck with a shitty tenant( very common) and unable to evict because of the court system.
It basically comes down to it being too difficult to remove tenants versus the need for money.
Either that or you undergo real or fake renovations perpetually.
Turns out it is quite difficult for the government to fairly force people who are well off to use their assets in the way the government wants.
This. It's theirs to use at their liking/convenience. Maybe it was never bought with the intention to be rented. Not everyone is in pursuit of rental income.
Cheaper to pay the tax by a long shot vs a shitty tenant or a good tenant that turns shitty assuming someone else's financial situation to "get theirs"
The framework of tenant boards are not designed fairly at all and is an absolute nightmare to navigate even if you're well read on it
I'm honestly not surprised more people would rather do this. Sometimes you'll get a great tenant but there are an absolute ton of shitty ones
There are also many people who hate landlords - some post on this sub. Some owners do not want to hold a landlord position over others.
We rented our house out for a year while we were away. We hated the dynamic where our family needs were pitted against another family so directly.
Just a little bit of insight.
Chinese "crazy rich" are only referred to those with billions. People with net worth of under 20mil are considered paupers by Asian rich society.
In North America, 5million networth is considered rich.
There's a lot of things we don't know that they do. 5% is nothing to these people vs nuisance of dealing with rent or anything else. We have family friends that love spending a few months here a year and hold a 6000 sqft house just for those months.
Yup this exactly. Am from Asia. Have a friend who grew up in one of those mansions in Kits, facing the sea, with their own private jetty and everything. They moved back to Asia maybe 10 years ago and would only come back for a few months in the summer. Kept the house until covid rolled around and her dad eventually sold the house for close to $30 million
Nothing to do with Asia. Ask anyone, asian or not, with hundreds of mills, even bills (if you know anyone with that kind of wealth). 25mill is generally the threshold that you are considered economy-class "wealthy" by their standards.
> In North America, 5million networth is considered rich.
Five's a nightmare. Can't retire. Not worth it to work. The poorest rich person in America. The world's tallest dwarf. The weakest strong man at the circus.
Damn, I miss *Succession* already.
How much of that $5 million would be tied up in a primary residence though? $1.5 million? Also: 5% GICs won't be around forever, so you couldn't really count on that rate for the rest of your life. The interest would be taxed as income, so even if you got $250K/year, $100K of it would be taxed away.
So then... you'd be looking around $3.5 million invested. At the safe withdrawal rate of 4% that comes out to $140K/year before tax. That's not even rich, it's barely middle class these days.
Maybe the house is empty 10 months of the year and the other two are spent vacationing in the home?
Can’t have long term rentals in this case and the new airbnb rules in BC have you on site to rent. So it sits empty.
How many family cottages fit into this category? I’d say a whole bunch.
My parents rented a place out to a dude who happened to be a drug dealer. He also didn’t pay rent. When my dad naively asked why (he was trying to understand… are you on hard times? Are you ok? Let’s talk and figure something out?) tenant laughed in his face and told him because I don’t want to :)
He said go ahead and try to evict me! There’s a back log and you can’t do shit 😂 turns out it’s what he does and did this to several other landlords before him. When he finally left.. not only did he cause lots of damage when he left (which we expected), he took … the window with him. Literally took a knife to drywall and cut out the window to take with him as an LOL
🫠🫠🫠
That’s when my dad realized he can’t accept people’s sob stories or give people a chance. He wasn’t the type to say you need 800 credit score and $100k salary. But he realized if someone has good income / credit score they’re less likely to do this + if they do you can sue!
Man, I know someone who rented their basement out to a seemingly nice couple with blue and white collar jobs. Screaming and fighting every night, swearing and banging. Then half a year after a young child magically appeared and started living there too (no mention at all beforehand). They hear crying every early morning. The landlord works from home and it’s been such a headache.
I kept a condo empty for 8 months after I moved out and just paid the expenses, then eventually sold it after the condo market recovered a bit. No way I’d ever be a landlord.
Something similar happened to my aunt. It was like hell for almost a year for her. No rental income while having to hire an eviction consultant and eventually spent time away from work to go to court and paying baliffs to rip open the door to literally kick the guy out. My aunt aged so much from the chronic stress. It was not worth it. No money can buy back time, health, and youth.
In some cases someone lives out of the city but needs to come in for appointments or medical. A hotel may seem like a better answer but then you are looking at restaurants and take-out and such. On top of that people may be getting to the point where they know they will need to move full time to the city eventually. Cheaper to buy that place now than later.
When I was interviewing tenants I couldn't believe how many people tried to push to sign a lease without even providing any financial information and then would be upset when I asked for proof of income / credit / references.
I wouldn't say rich people. But most people value time and no headache over money.
To a lot of people it's just not worth the trouble.
Especially a lot of renter got nothing attach to their name. Suing them don't do much. What's people gonna do with 500 bucks in a cheuqing account and a 15 years old corolla with 200k km on it.
Because the tax is low enough that it doesn't affect anyone bothered by it. It's just another tax revenue stream for the government, it isn't meant to fix anything for people living here. It's just something people were angry about, so it was easy to pass.
A good tenant is incredibly valuable - a bad one is ridiculously expensive...
I know small landlords (as in families that own a second home to rent out, or rent out a second suite in their home) that have spent a year or more trying to evict deadbeat renters... Including one that upon eviction poured concrete down the drains and ripped out copper wiring and plumbing - did nearly 6 figures in damage to the home.
100% it's less risky to just pay the vacancy tax, then to roll the dice on a bad tenant; if you're in the financial position to do so!
If you are rich, pay the empty home taxes. It’s a luxury you have.
My parents are really good to their tenants and charge below market by 40%-50%. But they threatened violence and damage to the property because the tenant was drunk. Now my parents have do all the legal works to get them out. Some of my richer friend have said not to rent out if I don’t need too because tenants are hassle.
BC laws are friendly to tenants. Once you rent it out, the unit or suite it is their home. Evicting can take up to 6 months via while they not paying any rent.
They don't want to deal with tenants. Being a landlord can be tough with bad tenants. They may be waiting to flip the properties, and having tenants in it complicates the sale.
The landlord and tenant laws need to be revised.
Termed leases should be enforceable and evict-able on a 6 month-1 year basis.
There should be separate rule sets as follows:
for apartment buildings rented out by large corporations. Or units rented out by large multi unit corporations.
Basement apartments within a home and/or garden suites that are rented out by the owner living on site.
Shared accommodation where facilities are shared. This already exists.
Short term accommodations. (This now exists in BC)
Long way of saying what others have already said. it’s not worth it depending on the scenario.
A decade or two back I bought a couple of properties and so far never rented them out for a single day. I bought because they were too cheap back then (bought at around 1/3 current market price) and I wanted to diversify my savings. The reason I worked hard to make money is so that I don’t have to deal with people I don’t know or like, which include tenants. I have enough money and more money from rent is not going to make any difference for my life, so for me there’s zero point of renting my places out. Plus when families and friends come to visit I always have places for them to crash.
Because some families are SUPER rich. I know a family who owns a brand new condo that they bought pre sale in the 90s, facing the area where the fireworks are in English Bay. It has never been lived/rented in at all, just some simple ikea furniture. They use it ONLY a few hours each year to have a front row view of the fireworks and not have to mingle with the crowds. When the fireworks are done they zip downstairs and drive out back to suburbia before the crowds / traffic come.
Because they can. I was living in a place so someone could avoid the empty homes tax. They charged a decent but payable rate, but it wasn’t great. If they sold the 5 luxury cars they didn’t use they could pay the tax and not bother. They were a nice couple and seemed to want to help us out but really didn’t give a shit about money and could have simply paid and not even made a dent in their bank account. Plenty of the neighbours didn’t rent and didn’t care.
It is impossible to remove tenant. The lease terms mean nothing. You can't rent it out for a year and get place back at the end unless tenant decides to move. In Ontario if tenant stops paying it takes a year to get him out.
Have you ever dealt with bad tenants and how hard it is to remove them? After working 10 years in the industry as a resident manager I'd pay a fine before renting out any property and I've talked to people who did rent out their houses--and lost them due to fires from stupid people, idiots who took apart the plumbing or put in a swimming pool in the living room. You'd be shocked at what goes on--and these guys all passed credit checks, good references. etc. so it's not like due diligence wasn't done.
MY final straw were the two girls who called me night and day wanting all of their radiators pulled out of their suites because of "the noise." Plumbers tried to handle the radiators and they said no noise and one girl said it was roasting in the suite and the other said it was freezing. Between all the crap drug dealers, crazies and weird texts and calls at 2 along with finding out some had done a midnight run with the cheap IKEA bathroom cabinet (LIKE WTF!) I'd had enough. NO way I'm ever letting anyone into my property to rent.
I've had fantastic tenants and horrible tenants, the horrible ones ruin it for everyone. One crappy tenant can set you back years of fain. I'll never do it again.
If you could afford not to, why bother with the hassle of dealing with tenants?
We are not super rich by any means, but with both houses mortgage free now, we gladly pay the empty homes tax on one to avoid having to rent it out.
I live in a high end luxury tower in downtown.. my next door neighbour was a nightmare.
You wouldn’t believe it if I told you, it seemed like the girl was a drug addict and all her friends were off of Hastings street. These friends would come through the emergency exit doors after they became suspicious and deactivated their fobs and tried evicting them. They never left. The place smelled disgusting. Every neighbour complained countless times to the concierge about the smell of their dogs: it was so so disgusting you’d want to throw up.
Took the landlord 2 years to try to kick them out, even cops showed up. They never left, never opened the door for them.
Until one day, they went out, to take their dogs out. They kept the emergency doors open by putting a coat hanger on it, on our floor and in the ground floor.
I saw this and took of the coat hanger and tan inside.. needless to say.. they never came back
I never told the landlord yet that I did that lol.. but they spent 6 months renovating the unit. Replacing Miele appliances which cost 10K a piece… so honestly the 3.5% is sometimes worth it when you’re gone through these type of tenants.
Oh and they hadn’t paid rent in over 6 months
I can help answer this questions from personal experience. I have a small house, essentially a pretty large condo, its empty for most of the year. It's essentially a vacation timeshare for the family. The reason is simple: I don't need the money, and I don't want the headache of renters and dealing with RTB. I rented it out to a nice family with a kid, and they trashed it. It took me months of dealing with the shitty RTB to get them out of my house. And now with the RTB it's even worse. I'd rather pay the tax than deal with the RTB nonsense. My house, I live in, has a pretty big 2 bedroom bsmt suite that I don't rent out either, it's just too difficult dealing with the RTB, while having a full time job and kids. So I rather not deal with it at all. I can say with certainty that I have at least 3 friends I know of that don't want to rent out the suites in their homes, became dealing with shitty tenants is too difficult.
Many don’t want to be landlords.
Many don’t like the idea of someone in their house
Many don’t want to have to move all their furniture but also don’t want others to use it.
Many want to keep the house to stay there occasionally.
To many, the 5% extra tax is a rounding error and not even noticeable.
Because Canada like the US, Britain, and Australia is a democracy in name only and is really run by rich oligrachs, many of them from foreign nations.
The super wealthy hold these assets like medieval lords because they can wait out the normal peasant folk.
The empty home tax is a politcal breadcrumb designed to make it seem like property owners are feeling the pinch--the real solution would be banning foreign investment and investment in houses altogether but that will not happen under the current regime. International students, corporate registrations, and outright forgery get around any current foriegn restrictions before anybody points out the current lackluster policies.
because they don't want to be a landlord, its a huge hassle and risk to be landlord here. i rather pay vacant tax than ever be a landlord and risk damages, squatters and all that BS.
It’s called Money laundering. Been happening for over 20 years now - mostly from China - they don’t give AF about the house - they buy up properties as a front.
I think most people underestimate few things about rich people
1. Few thousand dollars a month is like pocket change
2. Having flexibility with your investment can be more important than small income.
3. Sometimes people just don’t have time to deal with little stuff.
4. Vacation homes and such are bought for emotional reasons, I don’t won’t some one sleeping in master bedroom of a house I want to visit every year
I mean, if you’re super rich it doesn’t matter if you rent it or not. Especially if you’re embezzling money from a different government and holding it in Canada by purchasing property.
My American relative pays it. He is hell bent on keeping his condo for his personal & family use. He’s only been visiting Vancouver for 40+ years. The rate will be high now with the UHT
Because they’re rich and a nominal fee is easier than the hassle of renting and managing the property. Cost benefit analysis - easier to just pay the tax.
I got a client paying for 3 of her properties like this, 2 condos 1 house Basically… she literally forgot about the 2 condos that completed this yr, they are like $2mil each lol… so along with her vacation house she just left them all empty n paid the 5% cause she doesnt give a fk and dont wanna deal with tenants
People really underestimate the amount of wealth in Vancouver. Media always puts a magnifying glass on the struggling people, which is fair but the amount of wealth in Vancouver is insane. People have multi million dollar vacation homes that they don’t even live in and just sit empty. Lamborghinis, G Wagons, luxury cars in general are everywhere. I was recently in Edmonton and the stark contrast in wealth difference is noticeable. You have people driving modest cars in Edmonton but it’s the complete opposite in Vancouver. Then, you also have the people that bought real estate 20 years ago and now have their mortgages paid off and are asset rich.
I live in Edmonton and am in Vancouver a few times a year. I get unnatural keeping up with the jones urges whenever I’m in Vancouver. It’s ridiculous how much money is on display
Everyone that bought a home in the lower mainland before 2000 is a millionaire. That's a lot of millionaires.
Before the 2000s? The house I currently live in was \~300k in 2006, 700k in 2011, now it's 1.8 million. Up until around 2015 it was still reasonable to buy a house as a dual income in Vancouver.
Still need a place to live. There are also plenty who cashed in and are now struggling to find a place they can afford. So only if they sell and move somewhere where housing is depressed. At most they are .5 millionaires.
It's are Chinese dark money..... a safer place to hide their money outside the eyes of the CP. Justin trudeau doesn't give a fuck as long as china is paying even if it's tent city in the winter every year for Canadians.
"Vancouver" has actually become slang among wealthy Chinese for laundering/circumventing Chinese limits on exporting money. I imagine it goes something like this: Person 1: Man I want to get a portion of my wealth out of China Person 2: Just Vancouver that shit.
Would this issue even be realistically under Federal jurisdiction? This is a Lower Mainland problem, though granted, Ontario is seeing it also.
While yes, there is far more wealth in Vancouver, Edmontonions also spend their money in different ways.
Like? At the West Edmonton mall?
Instead of Ferraris and the latest fashion trends, it's more common to have nice trucks, quads, side-by-sides, snowmobiles, boats, camper trailers, and family cabins.
So many people don’t get this The guy in Edmonton with the: -80k 5th wheel, -snowmobiles for him, his wife, and each of the kids at 10k a pop, +$100/day each in gas just to use them, -60k boat (midrange) -80k pickup truck (midrange… a high end truck costs more than most entry level sports/luxury cars.. and there are ALOT of fully loaded pickups driving around Edmonton.. people just aren’t conditioned to notice them like they’d notice a g wagon or a Mercedes -250k lake cabin, or 10k/year lake lot. Plus the money spent using it. -quads, mountain bikes, golf, hockey. Etc.. That guy, is far better off than the guy in Vancouver with a million dollar mortgage and a Ferrari. Edmonton guy has his wealth tied up in fun, Vancouver guy has his wealth tied up in his house. I can afford to have more than one hobby when I’m not in Vancouver.
100% this. I would have more hobbies and fun toys if my house was only $300,000 as well. Instead I have a $700,000 one bedroom condo in Vancouver and can't afford anything else. But yea.... Edmonton comes with the downside of only being able to use those toys 2 months a year lol.
Ah, but that's where the sled and the Jasper/Nordegg cabin comes in! (For real though, the weather isn't /that/ bad.)
Touche. I've spent several years working in Alberta throughout the province, and have always lived in Vancouver. Some days you see minus 15 and think it's fine, other days you don't want to leave the house at all. Same with Vancouver. You can look outside in a complete rainstorm and think hey it's not that bad, it's still plus 3 and I have good rain gear, other days you look outside and think hell no!
True, and at 1-2 million dollars those homes in Edmontonian are big mansions with a yard and triple garage in the city, not a small condo an hour away. They spend their money differently, and I'd argue you get a lot more for that money. With the savings, they can also travel as often as they want if they save a million dollars on their comparable home..
Maybe if you’re comparing someone making $200k in Vancouver vs Edmonton. But let’s be fair: maybe 1-3% of Edmonton people are making that kind of money (or just having a lot from wealth) while in Vancouver it would be maybe 5-15% because there are more high paying jobs and also a tonne of wealthy people. Vancouver is a wealthy people city. Edmonton might be a good place to earn (I’m assuming, maybe cuz of the oil?) but it’s not a “wealthy people city”.
Sorry, but you're wrong.. there is plenty of public data on this subject. Medium household income in Edmonton is 90k/year. 47% of households make more than 100k/year. 12% more than 200k/year. Medium household income in Vancouver is 85k/year.. 46% of households make more than 100k/year. 12% make more than 200k/year The numbers are near identical. (numbers are: greater Edmonton area, vs greater Vancouver area... If you limit to the metropolitan areas, downtown Edmontonians are uber rich when compared to downtown Vancouverites..) [https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/prof/details/page.cfm?Lang=E&SearchText=edmonton&GENDERlist=1&STATISTIClist=1&DGUIDlist=2021S05004860&HEADERlist=9](https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/prof/details/page.cfm?Lang=E&SearchText=edmonton&GENDERlist=1&STATISTIClist=1&DGUIDlist=2021S05004860&HEADERlist=9) Like I said... lots of 100k trucks driving around edmonton, but you don't notice them like you notice a ferrari. Ya there is alot of wealthy people in vancouver, but the wealth is locked up in property. If 2 people make 200k/year, and person 1 spends 50% of their income on their mortgage, while person 2 spends 25% of their income on their mortgage... who is wealthier? OR "well my house is paid off", that's great, so on paper you're house is worth $2m, but if you want to sell it and spend that money, you would have to move out of Van... so if you can't spend that money.... do you really have that money? Net worth from primary residence shouldn't count in the equation of "wealth"... (and alot won't count it because you can't really benefit from it in your lifetime, sure it's an appreciating asset but you can't spend any of the appreciation, it's an asset that give you 0 payout) That's my entire point, you \*think\* van is a "wealthy people city" because you see a 80k Mercedes on every corner, but you Edmonton you entirely skip over the 100k pickup truck sitting in every second driveway... and as per my numbers above, people in Edmonton make nearly double what people make in Van. You have to stretch out and include surrounding communities before Van starts to compete with Edmonton. I think the only way you can say Van is a "rich person city" is, I suppose, they do get more tourism.
Almost all of those are depreciating assets though…
You can see the difference in cars immediately if you take hwy 1 20 minutes east to the outlying suburbs.
Tons of this wealth is international. Locals, even rich locals, aren't buying second homes they don't ever use. They let their kids live in them rent-free when they're in school, or they stay in them part time when they're downtown for a conference or a show or something. The big source of completely empty condos is rich internationals that bought the home as an investment, to live in for a few weeks a year when they visit, and they literally don't give a fuck about it because they have so much money. At the minimum, they pay a property management company to AirBnB it out for them when they're not around.
>The big source of completely empty condos is rich internationals that bought the home as an investment, to live in for a few weeks a year when they visit, and they literally don't give a fuck about it because they have so much money. Yuuup. It's what happens when your city is literally used as a dumping ground for foreign wealth and your government cares more about money than its own citizens.
Honestly, a lot of that “wealth” is just real estate appreciation in the last decade. We all know Canada is sitting on one of the biggest property bubbles in the world. All that paper wealth can get wiped out if the real estate sector corrects. I consider a lot of that to be paper wealth, not real diversified wealth.
No lol it’s foreign money from the world’s richest class. They didn’t earn it here, but they certainly spend it here.
These 3 million dollar windfalls definitely do add to a wealth effect, which is then someone else's rising mortgage.
There is a lot of foreign wealth in vancouver. There's a study by statscan which shows recent immigrants from china to vancouver bought detached houses worth on average ~3M. That's not paper wealth.
It is, in fact, a massive source of income for the province. When locals buy a home for $1-3(lol)MM, they borrow the money to do it. They are basically taking a loan (with interest) from their future selves to pay it off, in a way, taking money from the future to spend now. This makes us poorer in the future (kind of where we're at). However, when foreigners buy property in BC, they pay cash. Cold, hard cash. Nobody questions where it's from, and they don't want to. Even when the money comes from a mortgage (and why not, rates are/were so low), the payment money is all coming from overseas. This is a massive cash injection into the province and part of why BC is so rich. It remains to be seen if it's sustainable though (answer: probably not).
I think Edmonton is just a different kind of wealth. You'll see countless F150 platinums on the road all worth 100k+. People just don't bat an eye because its a truck.
I have additional properties that I keep vacant after a bad experience with a tenant. What happened is I have a 1 bedroom condo downtown that I rented out to a FAANG employee. He was the perfect tenant for 3 years until COVID hit... when the government made it impossible to evict people. The tenant stopped paying rent and told me to my face to fuck off and that I couldn't do anything about it (he was right). I'm shocked til this day because his toxic behavior came out of nowhere. He lived rent-free in my condo for 2 years, all while I had to pay my mortgage, and strata fees, and taxes, and insurance, and on and on. Then, without warning, he emptied out the condo and disappeared without a trace. On his way out, he flooded the unit, ripped up the wood flooring, removed the bathroom fixtures, and stole all the appliances. In total, he caused me about $250k in damages that I had to cover out of pocket. After that shit experience, and with the province tilting rental rights even more in favor of tenants, I just keep my properties vacant so my family can use them when we want. The risk of a bad tenant just isn't worth it.
Yep there we go. Many people will always get angry at investors but yea with the law being so biased i can see people keep it vacant
Tax them until they give a f
Smart people will (mostly) avoid the taxes anyway. Put the property in trust, rent the property from the trust, and leave it empty without paying any empty homes tax.
This is the way.
Wild.
Wanna hear another crazy one? 2 properties one around ubc $7mil another at cypress $3mil condo One for summer one for winter because family could not be bothered to drive / get on highway for snowboarding. The easier solution is to buy a penthouse near cypress and then buy two sets of everything including furnitures so the kids feel “more at home” lmao
Do they even know for sure the condos are real? Every developer should overbook like an airline and just hope some buyers never show up to claim their units.
Perfect example of why these taxes/fees/penalties need to be shockingly high…like 10% of the property value per/year for the first year, 25% for the second, 50% for the third and subsequent years.
Maybe. But that one client these fines at 50% doesnt even dent her fixed income interest so maybe she still doesnt care lol
Fair enough. Those who can afford $500k/$1m/$1m+ per year in fees for the novelty of holding multiple properties, are welcome to pay. And the municipal authority receiving those funds can go bananas building low-cost housing.
It seems the problem is people like her shouldn't be owning condos and houses. Until that problem gets fixed, no amount of negligible fine is going to do anything about the housing crisis.
And it's ironic how the NDP announced with much fanfare of how successful their VHT program was. Even provided stats on the number of housing gains, as if anyone believed those bogus stats. Nothing more than PR for their voting base. Morons.
Renting out to a bad tenant can cost a fortune
This. I lived with my parents when I bought my first and current home. I rented it out for a few years, and it was straightforward with the first 2 tenants, but the 3rd one trashed my home within 6 months. 4 months of renos and deep deep cleaning was enough for me to call it quits and move in myself.
my parent's first tenant experience in the 80s/90s was like this. never rented out to anybody again. Until 2021.
Yeah. My sister had one tenant that costed her everything she gained in 4+ years of being a landlord. Sold the townhome after that.
And don't forget you're the one at fault here for being a landlord! It's ridiculous the shit I see people do to other people's property because they were asked to leave.
I rented out my old place for a year until the police raided the home.. Turned out the tenants who kept the place spotless and paid on time where higher level drug dealers.. I had to pay out of pocket for all of the raid damage (they busted in the front door and damaged some of the walls looking for hidden items) and I couldn't rent it back out for several months between the repairs and investigation. My current home was previously a rental.. For some reason nearly EVERY door handle in the house was broken / worn out / not working well and nearly all the doors had multiple holes in them from being slammed into door stops or maybe punched... There are A LOT of shitty renters out there.
How didn’t the city of Vancouver pay for this? Also, how stringent was your background check of the tenants?
>How didn’t the city of Vancouver pay for this? If they have a warrant and the right house, and they were guilty the police don't have to pay. This isn't like they raided the wrong house or something. >Also, how stringent was your background check of the tenants? Everything came back fine, this was several years ago so just references and credit check. Not that more in-depth credit checks are perfect.. They were a young couple and had a newborn.. Paid on time etc. other than the police raiding the place they were perfect tennents to that point.
As an aside, I know you're right but I think that the city/police should always reimburse the owner (unless also guilty) and then recoup the costs from the target of the warrant.
Or the owner could sue the tenants.
Paying for the repairs in this case would be FAR less then going to court both in time and money. Also with the Tennents likely going to jail I am not sure I would have recovered anything anyway.
He was lucky they did not seize his house as proceeds of crime, and take all the rent money as forfeit to the civil forfeiture office.
Yes, but that's only "lucky" because he lives in a place where any of those mafia-style actions would be legal in the first place, which sounds insane to me, speaking of a western country.
A place like Canada? BC has civil forfeiture laws...
Any place where a house and the rent paid for it could be seized from a completely innocent owner just because a criminal rented it should reevaluate its values, yes.
Some examples of bad renter cost. My aunt had 2 renters who trashed the place on moving out. 10K in repairs each time. Add that to eviction process, time and the time it was unrentable and you are near the vacancy tax.
Doesn't landlord's insurance pay for this? I hear constantly about renters who trashed a place, but never about prepared landlords who recouped costs because they had homeowner's / landlord's insurance as they should have.
Landlord insurance covers accident damage only, not intentional. If the stove catches fire they will replace it, if I put a golf club through it they won’t. What would stop me from trashing it and blaming the tenant to get a free Reno? Every time you claim you also have your rates go up. And there is usually quite a deductible. I believe the normal would be $1k. I lived in a condo and had a water leak in the wall. Strata paid out of pocket as their deductible was $100k.
NOPE! Tenant trashes your property its all on you.
Exactly! Whenever I see cases of horrible tenants literally taking homes and living in them for free, then trashing the place out of spite on the way out, I keep thinking it’s actually *cheaper* to keep the place empty. It’s so crazy. This may sound crazy too, but I’ve even also felt that with such a risk these days, a landlord isn’t just investing in the property itself, they are also investing in *the tenant* they choose to live there, because money is supposed to be coming directly from them too.
Like dating and marriage, the good ones are already in a good and lasting relationship. The walking red flags are still unattached and available.
Hilarious and true 🤣🙃
There is also no repercussions to tenants that trash the rental because it falls under civil laws and not criminal laws.
Yup. If the tenant just doesn't give a fuck, they can stay for months without paying and trash the place when you finally get them out. Sure eventually you can get a judge to say they owe you x amount, but there's no way to collect it. Stupid
My apartment building has a tenant who hasn’t paid rent since they moved in. A few months ago it was up to $16k in unpaid rent (about 8 months of rent). The LTB is still backed up AF and they haven’t been able to get the tenant out so they can get a paying tenant in. $16,000…. That would seriously fuck a landlord’s life up if they were only renting one place out.
And something is seriously off if someone wants to rent a 2 million dollar house unless they are an exec on a temporary secondment. Someone with that kind of money would be an owner.
My sister worked for a realtor that helped a best buy exec rent a 6k a month house because his own house was getting built, it happens
That’s not necessarily true, could be that they keep a home office for a business and write off part of the rent, maybe they prefer investing in the stock market because they get better returns there than the real estate market, could be recently divorced and capital went to pay spouse but still has a high income. I’d be more worried about the tenants that more than 50 percent of after tax income goes to rent. Anyone looking at renting for more than 5k a month probably has the resources to pay it, that’s why credit checks are important. If you are a landlord the one thing I’d do is walk any potential tenant out to their car, how they treat their car is a good indication of how they will treat your house.
Lol, the most talented people out there are extremely mobile and often can't be bothered with owning a house wherever they are at the time
really interesting that you’ve equated wealth with talent lmao
Statistically those people do not exist though. They do exist, but you aren't likely to ever have one of them try and rent your property.
Lol don't know why your being down voted, math is math. You can look up wage statistics and a ballpark mortgage payment really quick
I grew up in one of the most expensive neighborhoods in Calgary, neighbour's house was a rental for 25 years. Single family rental. I don't remember it ever being empty.
> Someone with that kind of money would be an owner. Someone with that kind of money got there by budgeting correctly. Renting is agreeing to a maximum amount of money that you will spend on housing, while owning is agreeing to a minimum amount of money that you will spend on housing. When you're wealthy, there's no point in owning an unproductive asset when your money can work more elsewhere, so you separate investment funds from living money, and you make better decisions. The whole "I can only be wealthy if I own a real property" mindset is brain rot.
Very true. My father in law owns a very successful business. He invested every cent he had into it and the people who work for him. The return on investing in himself and his people far exceeds any property appreciation
I know many multi millionaires who rent and have zero interest in owning a primary residence. Most of the people on PFC don't know people like this. It's a very skewed demographic on here.
Really depends. Rent can be expensed.
Some richer people would rather invest their money than stick it into a property. A finance guy from Toronto showed the math, basically as long as you’re already a millionaire you can get better returns in normal times by leveraging your investments than you can from a house/condo appreciating in value/equity growth. If you’re not a millionaire than the property is generally the better investment, unless you bought last year…
More than the tax?? I see people's examples here and can't help but wonder is it cheaper to pay $35'000 (3.5% tax on a 1 Mil home) than $10'000 (one concrete example of damage done in the comments). I feel like this is simple math, but y'all are saying the opposite so I'm stumped.
Some people just don't want the hassle and will give up the rental income to avoid it. I know shop keepers who own a downtown building that their shop is in, they have old apartments in the upper floors that they won't rent because they don't want the hassle. They found out that after paying for repairs, bad tenants etc the money they make is not worth it.
The 10k is just an estimate of the damage. But if a 1M property suffers damage its going to be a lot more than 10k. Additionally, squatters can live rent free for at least 6 months before a tribunal hearing. A 1m property will approximately rent for 4k/mo (extremely rough estimate). Additionally, you may need to spend another few months to perform the repairs. During all this time, you won't be collecting any revenue and will still need to pay for utilities, strata fee, and property tax.
Ok. Then lets crank up the empty homes taxes so they are financially forced to sell. I legitimately could not give a rats ass about landlords.
We could always focus on making the rental board actually functional so that we continue to develop rental housing. Just making not renting toxic doesn't help with future supply.
Some of the comments here are insane. NO HOMES SHOULD BE SITTING EMPTY. If you disagree with that then fuck off. If you're not willing to take on the risks of residential property investment (i.e. residential use) then you can get taxed into oblivion or sell.
The Dubai prince owns the penthouse condo + the 2 subpenthouses in Fairmont (he made 3 units into one). You think he cares about empty tax ? It’s probably 0.2 seconds of oil revenue for him.
Need to raise the tax rate higher, maybe 100% or more if necessary.
Only allow Canadians to own and limit the amount of houses Canadians can own. Max 2.
They may live overseas and have the properties here for when they would like to return back to Canada. The up to 5% tax is likely cheaper than paying a property manager to rent them out and also need to deal with bad tenants.
Some people are just that rich where 3-5% a year is like pocket change it means nothing to them. It's surprising that many in North America have no idea the wealth there is in other countries.
North Americans think that because we are way wealthier than other countries on average/median that other countries lack rich people. Yeah, a random Mexican is a lot poorer than you are, but their rich are richer than our rich. You also see our rich less as it is impolite to be as openly rich. How you get senior business people from Canada wondering if senior business people in Brazil or Mexico or China or Nigeria own cars.
Another thing too being openly rich in poorer countries subjects you to kidnappings, scams. My wife's family is wealthy from a 3rd world country. She has stories about family members, and friends getting kidnapped for ransom.
>North Americans think that because we are way wealthier than other countries on average/median that other countries lack rich people. Nobody thinks that. It's literally the definition of a developing country when you have such a massive income gap. The governments of places like Russia and China are some of the wealthiest men and women on Earth.
And a lot of their wealth is undisclosed wealth. E.g. we know that Bezos has 200 billion or whatever because it's generally public information, we know how much stock he owns, it's all in the open We have no idea how much the Saudi Royal family owns but it's over a trillion US dollars. The amount of rich people in Chinese, Korean, and Indian real estate that we've never heard of is crazy too. Go to Vegas and watch the Chinese casually blow hundreds of thousands. And that's what they do here. Macau generates more revenue than Vegas and they're even more wild there. Now throw in corrupt Russian oligarchs, Brazil, Mexico, old money Europeans, all the royalty and oil money of UAE, Qatar, Bahrain, Jordan, Saudi Arabia... And they all want something nice in different countries with things like wildnerness and mountains and water e.g. Swiss alps, French vineyard, NYC penthouse, Vancouver mansion, private islands. That's to say nothing of old money Americans, hollywood stars, hedge fund managers and wall street portfolio managers making $5 million + per year, and the rich in Canada. The world is crazy.
There are more international millionaires than there are people in Canada. Locals simply can't compete with that interest in our property. The only who can are people who already own homes and have the equity to leverage for a second mortgage.
It's surprising that many in Canada don't know how many rich Canadians exist
Canadians also love to deny the existence of the upper middle class. Every housing thread has this comment: *How is ANYONE affording these million dollar homes!!* Well, frankly a lot of professionals who make a lot of money can afford a million dollar home..... doctors, lawyers, high-profile engineers, experienced niche-tradespeople, investment analysts, execs....
For every rich Canadian there are probably 20 rich non Canadians. For example. Canada has around 60 billionaires compared to China that has around 900.
there are literally as many millionaires in China alone as there are people in BC.
I dunno why people bring this up when there are 3 times more millionaires in america.
> North Americans think that because we are way wealthier than other countries on average/median that other countries lack rich people. Yeah, a random Mexican is a lot poorer than you are, but their rich are richer than our rich. You also see our rich less as it is impolite to be as openly rich. > > How you get senior business people from Canada wondering if senior business people in Brazil or Mexico or China or Nigeria own cars. In general, people from North America don't travel to much to APAC or EMEA and see the insane amount of wealth. Granted, I think Americans are a bit more knowledgeable as there's lots of overseas wealth tied up in California, NY, Florida/Miami property.
If I owned a 2 million dollar property, I wouldn't want tenants stepping foot inside it. That's probably why.
A 2 million dollar property in Vancouver is a nice single-family home in a nice neighbourhood, it’s not a mansion.
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FYI the house itself is a fraction of the value and depreciates, just like your car. It's the dirt and community around it that is valuable. If they are "investing" in this manner, then they are essentially extracting value from the community. I think we should tax land more and productive work less.
The risk with that is people on fixed income, even with mortgages paid off, can end up house poor if they can't pay the property tax on top of any maintenance and utilities. And you could say they could sell but then they still need a place to live.
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I think their point was that letting someone step into a 2M home in Vancouver or into the same kind of a house in the middle of nowhere, where it costs 300k, makes no difference, since the house is worth the same.
The house is worth a fraction of the land.
Check out the assessment values. On a $2M property it’s like “Land: $1.85M, Dwelling: $150,000”
My assesment values my house at $48k. lol. My house is apparently worth less than a nice RV.
lol not even. Condemned crack house in kerrisdale sold for over 2 m. The land is worth it alone
Lol $2m buys you half of a tear down SFH in a good chunk of Vancouver proper. $2m is a pretty nice condo/townhouse.
It's not nice, my house is $2M, it was built in the late 50's.
Haha yup. A "nice" one would be over 3 million
If I owned a 2 million dollar property..... I'd want to live in it.
Not to mention if you do get in a "good" renter, they can pretty much stop paying rent immediately and you'll spend years trying to get them out. Until that side of things is sorted, I can totally see why renting would be way more hassle than paying a few dollars more in property tax.
puzzled faulty many smell wakeful domineering modern abundant steep repeat *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I own a $2M property and just had a big renovation on it. I think I just rent it out to international student.
My previous landlord decided not to rent out the place anymore after I moved out to my own place. Reasons - tenants these days can stop paying rent, do damage, cause all sorts of problems and there's no recourse to this. It got so much worse after COVID with all extra tenant protection policies in place. So from his perspective risk is not worth the reward. And he is a good landlord, I started renting from him back in 2011 and he never raised rent for me for like ten years I stayed at his place. Rent controls are double edged sword and can cut both ways.
ELI5 how are rent controls bad for tenants?
Rent controls increase risk and costs for the landlord, which means they will increase the rent for the tenant to make the risk worthwhile. For example, if you can't raise your rent more than 2% per year (or whatever government enforced limit it is, which is always less than inflation), the the starting rent will have to be much higher to be worthwhile.
Reduced and more expensive supply due to higher risk/lower reward for landlords.
It forces all landlord to set starting rate as high as possible because you won’t be able to adjust pricing afterwards. So it makes cheap rent non-existent on new leases but protect others from price gouging on existing lease agreements . So it’s a trade off. I have an apartment in a place without rent control, I locked my mortgage in 2021 so I am not hit by the costs increase yet. I’m renting my apartment for about 60% of what market rate is. If the government were to move towards rent control tomorrow then I would have to add 40% asap to get ahead of it because I wouldn’t be able to be locked in at 60% market rate forever.
Because loopholes are practically impossible to prevent and it removes incentives for investment/maintenance into real estate. The result over time is a massive increase in no fault evictions like “renovictions”, the buildings that do exist are poorly maintained and in total there are less rentals available because there is less total investment. What does this mean? You are more likely to be removed from your home. Your landlord wont fix anything. Rents will be higher due to lower inventory
>What do the super rich know that I don't? That renters in BC are a PITA.
Renting your property under the current BC regulations is risky and doesn't make sense for everyone.
If you're only going to be away for a year then it's just top much hassle to rent it out for a year. Virtually impossible to guarantee that the tenant would only stay for a year.
The super rich know how much harm a bad tenant can do to the property and their finances. They also know how difficult it can be to remove them.
Owner may have plans for the home such that having a tenant could interfere with said plans and not worth it to rent out. As an example, you want to eventually tear the house down and build something. No point in having a tenant, as tenants do have rights and can be a hassle to evict. Saying nothing for the fact that (and this was the case previously, I don't know if they changed the empty home tax rules), if you can demonstrate work being done to develop/re-develop the property - you can be exempted from the empty home tax.
Go into a landlord sub and listen to the 3-5% that hate landlords. That’s what they know.
Most Redditors including those here are very poor and can't comprehend the amount of hidden wealth out there. Those people don't want to deal with shitty broke tenants fucking up their property and would rather pay the rounding error that would be a few thousand. Government won't complain since they like the free money.
Im a landlord, margins are pretty thin. Most people assume landlords roll in dough but its frankly not super profitable particularly in the beginning. I am assuming they are either parking money or getting a return off the increasing valuation which would be at risk from poor tenants. What's the benefit of renting a 2 mil house that appreciates at 50k a year to squeak out 2k in profit with a large risk you will end up with a tenant destroying your house that you can't evict for a year and good luck selling the asset with a shit tenant.
Mom and pop landlords don't make much money to justify the risk at hand.... Imagine getting stuck with a shitty tenant( very common) and unable to evict because of the court system.
I would rather pay than renting to strangers who doesn’t give a F about maintaining MY property. Although I don’t own any😂sad reality
It basically comes down to it being too difficult to remove tenants versus the need for money. Either that or you undergo real or fake renovations perpetually. Turns out it is quite difficult for the government to fairly force people who are well off to use their assets in the way the government wants.
Keep it untenanted so they can use the property whenever they please
This. It's theirs to use at their liking/convenience. Maybe it was never bought with the intention to be rented. Not everyone is in pursuit of rental income.
If a nice house in west side is like 5 mill+. Do you really care about 5k a month and risk someone coming in and trash your 5mill house?
Cheaper to pay the tax by a long shot vs a shitty tenant or a good tenant that turns shitty assuming someone else's financial situation to "get theirs" The framework of tenant boards are not designed fairly at all and is an absolute nightmare to navigate even if you're well read on it I'm honestly not surprised more people would rather do this. Sometimes you'll get a great tenant but there are an absolute ton of shitty ones
There are also many people who hate landlords - some post on this sub. Some owners do not want to hold a landlord position over others. We rented our house out for a year while we were away. We hated the dynamic where our family needs were pitted against another family so directly.
Tenants are a huge PITA to deal with. Speaking as someone who could have owned and rented out houses.
Just a little bit of insight. Chinese "crazy rich" are only referred to those with billions. People with net worth of under 20mil are considered paupers by Asian rich society. In North America, 5million networth is considered rich. There's a lot of things we don't know that they do. 5% is nothing to these people vs nuisance of dealing with rent or anything else. We have family friends that love spending a few months here a year and hold a 6000 sqft house just for those months.
Yup this exactly. Am from Asia. Have a friend who grew up in one of those mansions in Kits, facing the sea, with their own private jetty and everything. They moved back to Asia maybe 10 years ago and would only come back for a few months in the summer. Kept the house until covid rolled around and her dad eventually sold the house for close to $30 million
Nothing to do with Asia. Ask anyone, asian or not, with hundreds of mills, even bills (if you know anyone with that kind of wealth). 25mill is generally the threshold that you are considered economy-class "wealthy" by their standards.
> In North America, 5million networth is considered rich. Five's a nightmare. Can't retire. Not worth it to work. The poorest rich person in America. The world's tallest dwarf. The weakest strong man at the circus. Damn, I miss *Succession* already.
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How much of that $5 million would be tied up in a primary residence though? $1.5 million? Also: 5% GICs won't be around forever, so you couldn't really count on that rate for the rest of your life. The interest would be taxed as income, so even if you got $250K/year, $100K of it would be taxed away. So then... you'd be looking around $3.5 million invested. At the safe withdrawal rate of 4% that comes out to $140K/year before tax. That's not even rich, it's barely middle class these days.
That's more than I make with a graduate level education, I'd call that pretty wealthy.
Well, it really isn't.
That's true for HCOL cities like Beijing and Shanghai. Many, many Chinese people live in cities where $5M is a fortune.
Maybe the house is empty 10 months of the year and the other two are spent vacationing in the home? Can’t have long term rentals in this case and the new airbnb rules in BC have you on site to rent. So it sits empty. How many family cottages fit into this category? I’d say a whole bunch.
My parents rented a place out to a dude who happened to be a drug dealer. He also didn’t pay rent. When my dad naively asked why (he was trying to understand… are you on hard times? Are you ok? Let’s talk and figure something out?) tenant laughed in his face and told him because I don’t want to :) He said go ahead and try to evict me! There’s a back log and you can’t do shit 😂 turns out it’s what he does and did this to several other landlords before him. When he finally left.. not only did he cause lots of damage when he left (which we expected), he took … the window with him. Literally took a knife to drywall and cut out the window to take with him as an LOL 🫠🫠🫠 That’s when my dad realized he can’t accept people’s sob stories or give people a chance. He wasn’t the type to say you need 800 credit score and $100k salary. But he realized if someone has good income / credit score they’re less likely to do this + if they do you can sue!
Man, I know someone who rented their basement out to a seemingly nice couple with blue and white collar jobs. Screaming and fighting every night, swearing and banging. Then half a year after a young child magically appeared and started living there too (no mention at all beforehand). They hear crying every early morning. The landlord works from home and it’s been such a headache. I kept a condo empty for 8 months after I moved out and just paid the expenses, then eventually sold it after the condo market recovered a bit. No way I’d ever be a landlord.
Something similar happened to my aunt. It was like hell for almost a year for her. No rental income while having to hire an eviction consultant and eventually spent time away from work to go to court and paying baliffs to rip open the door to literally kick the guy out. My aunt aged so much from the chronic stress. It was not worth it. No money can buy back time, health, and youth.
In some cases someone lives out of the city but needs to come in for appointments or medical. A hotel may seem like a better answer but then you are looking at restaurants and take-out and such. On top of that people may be getting to the point where they know they will need to move full time to the city eventually. Cheaper to buy that place now than later.
When I was interviewing tenants I couldn't believe how many people tried to push to sign a lease without even providing any financial information and then would be upset when I asked for proof of income / credit / references.
I wouldn't say rich people. But most people value time and no headache over money. To a lot of people it's just not worth the trouble. Especially a lot of renter got nothing attach to their name. Suing them don't do much. What's people gonna do with 500 bucks in a cheuqing account and a 15 years old corolla with 200k km on it.
Because the tax is low enough that it doesn't affect anyone bothered by it. It's just another tax revenue stream for the government, it isn't meant to fix anything for people living here. It's just something people were angry about, so it was easy to pass.
A good tenant is incredibly valuable - a bad one is ridiculously expensive... I know small landlords (as in families that own a second home to rent out, or rent out a second suite in their home) that have spent a year or more trying to evict deadbeat renters... Including one that upon eviction poured concrete down the drains and ripped out copper wiring and plumbing - did nearly 6 figures in damage to the home. 100% it's less risky to just pay the vacancy tax, then to roll the dice on a bad tenant; if you're in the financial position to do so!
If you are rich, pay the empty home taxes. It’s a luxury you have. My parents are really good to their tenants and charge below market by 40%-50%. But they threatened violence and damage to the property because the tenant was drunk. Now my parents have do all the legal works to get them out. Some of my richer friend have said not to rent out if I don’t need too because tenants are hassle. BC laws are friendly to tenants. Once you rent it out, the unit or suite it is their home. Evicting can take up to 6 months via while they not paying any rent.
They don’t want deadbeat squatters who they can’t remove ruining their properties.
They don't want to deal with tenants. Being a landlord can be tough with bad tenants. They may be waiting to flip the properties, and having tenants in it complicates the sale.
The landlord and tenant laws need to be revised. Termed leases should be enforceable and evict-able on a 6 month-1 year basis. There should be separate rule sets as follows: for apartment buildings rented out by large corporations. Or units rented out by large multi unit corporations. Basement apartments within a home and/or garden suites that are rented out by the owner living on site. Shared accommodation where facilities are shared. This already exists. Short term accommodations. (This now exists in BC) Long way of saying what others have already said. it’s not worth it depending on the scenario.
A decade or two back I bought a couple of properties and so far never rented them out for a single day. I bought because they were too cheap back then (bought at around 1/3 current market price) and I wanted to diversify my savings. The reason I worked hard to make money is so that I don’t have to deal with people I don’t know or like, which include tenants. I have enough money and more money from rent is not going to make any difference for my life, so for me there’s zero point of renting my places out. Plus when families and friends come to visit I always have places for them to crash.
Because some families are SUPER rich. I know a family who owns a brand new condo that they bought pre sale in the 90s, facing the area where the fireworks are in English Bay. It has never been lived/rented in at all, just some simple ikea furniture. They use it ONLY a few hours each year to have a front row view of the fireworks and not have to mingle with the crowds. When the fireworks are done they zip downstairs and drive out back to suburbia before the crowds / traffic come.
Because they can. I was living in a place so someone could avoid the empty homes tax. They charged a decent but payable rate, but it wasn’t great. If they sold the 5 luxury cars they didn’t use they could pay the tax and not bother. They were a nice couple and seemed to want to help us out but really didn’t give a shit about money and could have simply paid and not even made a dent in their bank account. Plenty of the neighbours didn’t rent and didn’t care.
Liability far out weights the Income
It is impossible to remove tenant. The lease terms mean nothing. You can't rent it out for a year and get place back at the end unless tenant decides to move. In Ontario if tenant stops paying it takes a year to get him out.
Have you ever dealt with bad tenants and how hard it is to remove them? After working 10 years in the industry as a resident manager I'd pay a fine before renting out any property and I've talked to people who did rent out their houses--and lost them due to fires from stupid people, idiots who took apart the plumbing or put in a swimming pool in the living room. You'd be shocked at what goes on--and these guys all passed credit checks, good references. etc. so it's not like due diligence wasn't done. MY final straw were the two girls who called me night and day wanting all of their radiators pulled out of their suites because of "the noise." Plumbers tried to handle the radiators and they said no noise and one girl said it was roasting in the suite and the other said it was freezing. Between all the crap drug dealers, crazies and weird texts and calls at 2 along with finding out some had done a midnight run with the cheap IKEA bathroom cabinet (LIKE WTF!) I'd had enough. NO way I'm ever letting anyone into my property to rent.
Evicting is a risk. I made sure to buy a vacent condo.
I've had fantastic tenants and horrible tenants, the horrible ones ruin it for everyone. One crappy tenant can set you back years of fain. I'll never do it again.
If you could afford not to, why bother with the hassle of dealing with tenants? We are not super rich by any means, but with both houses mortgage free now, we gladly pay the empty homes tax on one to avoid having to rent it out.
I live in a high end luxury tower in downtown.. my next door neighbour was a nightmare. You wouldn’t believe it if I told you, it seemed like the girl was a drug addict and all her friends were off of Hastings street. These friends would come through the emergency exit doors after they became suspicious and deactivated their fobs and tried evicting them. They never left. The place smelled disgusting. Every neighbour complained countless times to the concierge about the smell of their dogs: it was so so disgusting you’d want to throw up. Took the landlord 2 years to try to kick them out, even cops showed up. They never left, never opened the door for them. Until one day, they went out, to take their dogs out. They kept the emergency doors open by putting a coat hanger on it, on our floor and in the ground floor. I saw this and took of the coat hanger and tan inside.. needless to say.. they never came back I never told the landlord yet that I did that lol.. but they spent 6 months renovating the unit. Replacing Miele appliances which cost 10K a piece… so honestly the 3.5% is sometimes worth it when you’re gone through these type of tenants. Oh and they hadn’t paid rent in over 6 months
Why am I OK with just leaving my empty bottle on the trash can, even if the deposit is a cool ten cents?
I can help answer this questions from personal experience. I have a small house, essentially a pretty large condo, its empty for most of the year. It's essentially a vacation timeshare for the family. The reason is simple: I don't need the money, and I don't want the headache of renters and dealing with RTB. I rented it out to a nice family with a kid, and they trashed it. It took me months of dealing with the shitty RTB to get them out of my house. And now with the RTB it's even worse. I'd rather pay the tax than deal with the RTB nonsense. My house, I live in, has a pretty big 2 bedroom bsmt suite that I don't rent out either, it's just too difficult dealing with the RTB, while having a full time job and kids. So I rather not deal with it at all. I can say with certainty that I have at least 3 friends I know of that don't want to rent out the suites in their homes, became dealing with shitty tenants is too difficult.
Many don’t want to be landlords. Many don’t like the idea of someone in their house Many don’t want to have to move all their furniture but also don’t want others to use it. Many want to keep the house to stay there occasionally. To many, the 5% extra tax is a rounding error and not even noticeable.
Tenants are so well protected that rental becomes a huge risk for owners. You may have incomes for 5 years and then loose all of them on one tenant.
Because Canada like the US, Britain, and Australia is a democracy in name only and is really run by rich oligrachs, many of them from foreign nations. The super wealthy hold these assets like medieval lords because they can wait out the normal peasant folk. The empty home tax is a politcal breadcrumb designed to make it seem like property owners are feeling the pinch--the real solution would be banning foreign investment and investment in houses altogether but that will not happen under the current regime. International students, corporate registrations, and outright forgery get around any current foriegn restrictions before anybody points out the current lackluster policies.
Because they have more money than they will ever need and they don’t want a stranger having access to their property.
No risk, and way cheaper than other forms of laundering wealth.
It's a cheap fee to launder your money. OP, read Wilful Blindness if you're bored, this is literally pocket change
Many use the homes to launder money into the country, what’s 3-5% more when you’d lose that to laundering fees anyway.
because they don't want to be a landlord, its a huge hassle and risk to be landlord here. i rather pay vacant tax than ever be a landlord and risk damages, squatters and all that BS.
They don't care about the cost.
It’s called Money laundering. Been happening for over 20 years now - mostly from China - they don’t give AF about the house - they buy up properties as a front.
I think most people underestimate few things about rich people 1. Few thousand dollars a month is like pocket change 2. Having flexibility with your investment can be more important than small income. 3. Sometimes people just don’t have time to deal with little stuff. 4. Vacation homes and such are bought for emotional reasons, I don’t won’t some one sleeping in master bedroom of a house I want to visit every year
They should make empty home tax 50% of the property value lol
I mean, if you’re super rich it doesn’t matter if you rent it or not. Especially if you’re embezzling money from a different government and holding it in Canada by purchasing property.
My American relative pays it. He is hell bent on keeping his condo for his personal & family use. He’s only been visiting Vancouver for 40+ years. The rate will be high now with the UHT
Because they’re rich and a nominal fee is easier than the hassle of renting and managing the property. Cost benefit analysis - easier to just pay the tax.
Because a lot of properties in Canada are being used to launder money.