BOC Hits 5%

[GreyGhost]

Don’t know if I could stomach losing 300k…

Toronto-area buyers are walking away from deposits on new homes — some losing as much as $300,000 — Toronto Star

‘This is just the beginning,’ say experts, noting buyers of new builds further from Toronto are most vulnerable.

apple.news

As with all of these 300K is the start. Builder will sue and you will lose if house sells for less. They had lost as soon as they signed a contract at a ridiculous price.

 

[mimico_polak]

As with all of these 300K is the start. Builder will sue and you will lose if house sells for less. They had lost as soon as they signed a contract at a ridiculous price.

But the salesman said it’s a sure thing….

I actually wouldn’t be surprised if someone started a lawsuit against the BoC for their rate rises after they said ‘rates will be low for a long while’ and then immediately started increasing.

I’m surprised no one has tried it yet.

 

[Mad Mike]

As with all of these 300K is the start. Builder will sue and you will lose if house sells for less. They had lost as soon as they signed a contract at a ridiculous price.

I think this is a bit of editorial sensationalization. Real estate is undergoing a correction, that goes without saying.

If closing on a pre-build purchase is before the expiry of your preapproval, it's speculation as far as I'm concerned.

Speculators win and speculators lose, today they are losing.

 

[Mad Mike]

But the salesman said it’s a sure thing….

I actually wouldn’t be surprised if someone started a lawsuit against the BoC for their rate rises after they said ‘rates will be low for a long while’ and then immediately started increasing.

I’m surprised no one has tried it yet.

I'm surprised the press isn't calling for TM's head. BOC has been a guiding light in keeping the Canadian economy stable through some very tough times. This time they **** the bed, their political support for JT over their fiduciary duty to the public is at odds with their mandate.

I believe Tiff Macklem was a long shot when installed in the position. He was turned down twice before because his experience was deemed too narrow, and only got appointed lacks the experience and ability to execute BOC's mandate. He should step down.

 

[GreyGhost]

I think this is a bit of editorial sensationalization. Real estate is undergoing a correction, that goes without saying.

If closing on a pre-build purchase is before the expiry of your preapproval, it's speculation as far as I'm concerned.

Speculators win and speculators lose, today they are losing.

I don't understand the pre-approval bit. Most of the ones in trouble were bought 18-24 months ago at the peak. The buyers qualified for xxxk mortgages and now some need hundreds more to close and ltv has gone in the crapper.

Arent all mortgages conditional upon appraisal near closing?

Many of these were clearly speculators (they would call themselves investors in a rising market). Now they are trying to find the way out with the least damage. I suspect not closing on the house is not that path. It is the easiest at first but it will be expensive. Assuming it wasn't your first house, builder can and shpuld sue for price differential. Paying out that judgment could easily force you into a position where you have to sell existing house to access capital. You would have done better to sell existing house and close on new house in most cases. So many buyers think their liability is limited to the deposit.

 

[nobbie48]

Don’t know if I could stomach losing 300k…

Toronto-area buyers are walking away from deposits on new homes — some losing as much as $300,000 — Toronto Star

‘This is just the beginning,’ say experts, noting buyers of new builds further from Toronto are most vulnerable.

apple.news

The deposit is one thing and most deposits aren't that big but big numbers are money makers for the media.

However the buyer also has to make good for any loss the builder gets hit with when the buyer defaults. The could mean the difference between the $1.5 million contract price and the eventual $1.2 selling price plus real estate fees, interest costs, maintenance costs, taxes, legal fees and anything else the builder could tack on as an expense. There would be no incentive for the seller to shop around for bargains on any of the costs. They might even add a surcharge, go high and get a kick back It could get really really ugly. Nightmare on Elm Street ugly.

A guy being chased for money made a comment that spoke reality. "If somebody's going to lose their house, it isn't going to be me." Ethics and money are not related.

 

[Mad Mike]

I often wonder what would happen if Rev Can started enforcing tax rules on prebuilds?

• On a prebuild, all capital gains between the time of the contract and Jan 1 of the year you move in are taxable
• All capital gains on Assignment sales, or a sale where the home never qualified as principal residence are taxable

Betcha there's a few billion tax dollars to be mined on those two items alone.

 

[GreyGhost]

I often wonder what would happen if Rev Can started enforcing tax rules on prebuilds?

• On a prebuild, all capital gains between the time of the contract and Jan 1 of the year you move in are taxable
• All capital gains on Assignment sales, or a sale where the home never qualified as principal residence are taxable

Betcha there's a few billion tax dollars to be mined on those two items alone.

Ok in theory. Really hard to lock down the value of the thing on Jan 1 of the year you move in as the dwelling may not be complete so it is low as it sits. In practice, that may have to be appraised value at move in? Almost every dwelling gets an appraisal, does CRA get circulated with the results?

Principal residence exemption has been a giant hole for a long time. If you do a full-gut, that isn't your principal residence but I don't know of anyone that has been dinged for that. Again, if we went to a lifetime principal exemption of xxx (maybe 1M?), that means flippers run out quick and get taxed after that. You don't really care about games as there are no loopholes. Lets be honest, most residences are more about investment than living in canada lately. I know of many people that buy houses thousands of square feet larger than they use just for the investment potential. If they thought that the investment would attract tax, they would live in a far smaller and cheaper dwelling and invest money elsewhere. I know, ditching the exemption complicates book-keeping substantially as there should be input credits in that case. That is a major obstacle to be worked out.

 

[crankcall]

Many folks that were pre approved two years ago may not be pre approved now . That conversation is only good on the day your having it . It’s a guideline not a contract.

Walking on a 300k deposit would suck , but if the reality is you couldn’t afford to live there anyway , it may be the cleanest way out .


Sent from my iPhone using GTAMotorcycle.com

 

[Mad Mike]

Ok in theory. Really hard to lock down the value of the thing on Jan 1 of the year you move in as the dwelling may not be complete so it is low as it sits. In practice, that may have to be appraised value at move in? Almost every dwelling gets an appraisal, does CRA get circulated with the results?

The value for capx calculation is the FMV or your property on Jan 1st the year you qualify for the primary home exemption. Hard to calculate, but on average it would be 6 mos out of date. Many prebuilds were purchased 2-5 years before the owner qualifies for primary residence exemption -- RevCan is not aggressive in collecting taxes for gains made in those years.

Principal residence exemption has been a giant hole for a long time. If you do a full-gut, that isn't your principal residence but I don't know of anyone that has been dinged for that. Again, if we went to a lifetime principal exemption of xxx (maybe 1M?), that means flippers run out quick and get taxed after that. You don't really care about games as there are no loopholes. Lets be honest, most residences are more about investment than living in canada lately. I know of many people that buy houses thousands of square feet larger than they use just for the investment potential. If they thought that the investment would attract tax, they would live in a far smaller and cheaper dwelling and invest money elsewhere. I know, ditching the exemption complicates book-keeping substantially as there should be input credits in that case. That is a major obstacle to be worked out.

I'm not sure it's really that much of a loophole. If your home was treated as an investment, improvements get added to the capital costs, and expenses related to financing, maintenance, security, selling and insuring a property become tax deductions. In the end I'd guess it all washed out to be about the same - I look at home ownership more as an easy-to-understand savings plan rather than a clever tax loophole.

 

[GreyGhost]

Dalhousie professor ripping BOC for political pandering around carbon pricing and inflation. When finally backed into a corner, carbon pricing is about 16% of inflation and pricing is supposed to triple over the next few years. The math isn't too difficult but it does look terrible for BOC and the morons in Ottawa.

Errors in explaining impact of carbon tax on inflation shake confidence in Bank of Canada - Writer's Bloc

The Bank of Canada’s unconventional approach to communicating its stance on carbon pricing, particularly its sporadic responses on social media, has raised eyebrows.

www.castanet.net

 

[Mad Mike]

Dalhousie professor ripping BOC for political pandering around carbon pricing and inflation. When finally backed into a corner, carbon pricing is about 16% of inflation and pricing is supposed to triple over the next few years. The math isn't too difficult but it does look terrible for BOC and the morons in Ottawa.

Errors in explaining impact of carbon tax on inflation shake confidence in Bank of Canada - Writer's Bloc

The Bank of Canada’s unconventional approach to communicating its stance on carbon pricing, particularly its sporadic responses on social media, has raised eyebrows.

www.castanet.net

I always suspected there was some political capital exchanged when Tiffany got the job. He's a bureaucrat through and thru, passed over for the job he holds several times for being too political for the BOC mandate, and for having zero experience outside government bureaucracy.

I'm guessing he 'owed someone' some loyalty when he got the job, his political support for money creation, deficit spending, quantitative easing, and carbon tax makes it hard to believe he didn't sell his soul to get the job.

I wonder who bought it?

 

[nobbie48]

I always suspected there was some political capital exchanged when Tiffany got the job. He's a bureaucrat through and thru, passed over for the job he holds several times for being too political for the BOC mandate, and for having zero experience outside government bureaucracy.

I'm guessing he 'owed someone' some loyalty when he got the job, his political support for money creation, deficit spending, quantitative easing, and carbon tax makes it hard to believe he didn't sell his soul to get the job.

I wonder who bought it?

Where does all this carbon tax money go? Am I missing something?

An errant driver maims a rider and gets a $600 fine. The money goes to the government, not the maimed rider.

Is carbon tax similarly a punishment, going to the coffers or is it actually used to cleanse the planet?

With other larger countries ignoring the problem the swimming pool world we live in has one less little kid peeing in it.

In the energy crunch of the 1970's a friend was living in an apartment. Management asked people to set their thermostats a few degrees lower and wear sweaters, He and his wife complied. A month later his wife went door to door on a charity event and found that almost everyone else had their thermostats set at 75-80°F.

The money they saved the building was shared by the ones ignoring the request.

We have too many Marie Antoinettes in governments telling everyone else "If you have no bread to eat, just eat cake."

 

[GreyGhost]

Where does all this carbon tax money go? Am I missing something?

You're not going to like the answer. Most of it flows to people that are already doing well financially. EV incentives, greener homes rebate for 5K off heat pump (which almost every contractor marked up their prices 5K when the program started so the money goes straight to HVAC contractors), interest-free loans for solar panels, etc.

 

[nobbie48]

You're not going to like the answer. Most of it flows to people that are already doing well financially. EV incentives, greener homes rebate for 5K off heat pump (which almost every contractor marked up their prices 5K when the program started so the money goes straight to HVAC contractors), interest-free loans for solar panels, etc.

Of course, a bit of the money will fall off the conveyor belt as it passes the various approvals.

 

[Brian P]

Where does all this carbon tax money go? Am I missing something?

Every taxpayer is getting a quarterly rebate direct-deposited. I've been getting them. It's a few hundred bucks per quarter for the average family.

The whole way this was supposed to work is that the carbon tax was applied to consumption and the rebate was distributed independently of consumption. The intent is that those with prodigious consumption pay more, and those with low consumption probably see a net reduction in tax. It's an incentive to reduce consumption.

The tax is currently C$65 per tonne of CO2. That's equivalent to 14.3 cents per litre of gasoline and 12.4 cents per cubic metre of natural gas.

At least on the surface, I'm considerably on the cash-flow-positive side of this. I'd have to use something like a combined 10,000 litres of gasoline + cubic metres of natural gas per year, and I'm not even remotely close to that.

 

[GreyGhost]

Every taxpayer is getting a quarterly rebate direct-deposited. I've been getting them. It's a few hundred bucks per quarter for the average family.

The whole way this was supposed to work is that the carbon tax was applied to consumption and the rebate was distributed independently of consumption. The intent is that those with prodigious consumption pay more, and those with low consumption probably see a net reduction in tax. It's an incentive to reduce consumption.

The tax is currently C$65 per tonne of CO2. That's equivalent to 14.3 cents per litre of gasoline and 12.4 cents per cubic metre of natural gas.

At least on the surface, I'm considerably on the cash-flow-positive side of this. I'd have to use something like a combined 10,000 litres of gasoline + cubic metres of natural gas per year, and I'm not even remotely close to that.

Except for the whole secondary part of this. Everything you buy has been shipped by transportation paying carbon tax which drives up the price to you. You get on a plane and there's a ton of carbon tax in your ticket that you can't see. Heating of government buildings paying carbon tax, etc. It's hard to come up with a reasonable number that an end user has paid. Chief stupid says everybody gets back more than they paid which is patently ridiculous and all statements from government should be ignored as propaganda with no basis in reality.

 

[crankcall]

I’ve not seen dollar one on a carbon rebate . It’s not going in everyone’s bank account.


Sent from my iPhone using GTAMotorcycle.com

 

[mimico_polak]

Every taxpayer is getting a quarterly rebate direct-deposited. I've been getting them. It's a few hundred bucks per quarter for the average family.

The whole way this was supposed to work is that the carbon tax was applied to consumption and the rebate was distributed independently of consumption. The intent is that those with prodigious consumption pay more, and those with low consumption probably see a net reduction in tax. It's an incentive to reduce consumption.

The tax is currently C$65 per tonne of CO2. That's equivalent to 14.3 cents per litre of gasoline and 12.4 cents per cubic metre of natural gas.

At least on the surface, I'm considerably on the cash-flow-positive side of this. I'd have to use something like a combined 10,000 litres of gasoline + cubic metres of natural gas per year, and I'm not even remotely close to that.

Did you not get a rebate for buying your Bolt EUV?

If so then technically you got the money, just in a different form.

 

[Scuba Steve]

I’ve not seen dollar one on a carbon rebate . It’s not going in everyone’s bank account.


Sent from my iPhone using GTAMotorcycle.com

I have not seen any such rebate either

Sent from the future