Justin MacKinnon

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The NDP has decided to remove tolls from the Port Mann and the Golden Ears bridges, effective September 1st, 2017.  Reactions are mixed.  Some are ecstatic with not having to pay any more tolls in their day-to-day lives, others are worried about where this income will have to be supplemented from.  The former of the two would also argue why only they had to pay tolls to cross when there are still 4 other local bridges that get off scott-free.  There was a proposition a few years back suggesting a reduced toll, but for ALL bridges.  North shore folks were up in arms about the thought, so it was quickly shut down.  So this touchy subject has been put to bed, at least for now.  

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The municipal government proposed a plan to build 72,000 homes in the next decade.  48,000 of those will be rentals.  15,000 of those rentals will be targetted for a lower income household and 6,800 will be for those with extremely low income.  Some will also be geared towards social housing programs.


As mentioned in an earlier blog, municipalities in BC are allowing detached, single-family homes to rent out up to 4 suites.  


What does all this mean?  It means there are measures being taken to settle the astronomical rental prices pushing more and more Vancouverites out of the city.  It also means that much needed real estate inventory will be injected into a market starved for just that.  The sellers market that we are currently seeing might become more balanced or even flip to a buyers market as these next 10 years approach.  We'll be seeing less subject-free offers, less "holding offers until next Monday", less multiple offer scenarios with listing agents holding 12 offers at a time.  All this is great for future home buyers...Landlords and home sellers may not think so, but this market is in need of some long awaited corrections.  Lets see how it all unfolds.

 

 

Source: http://dailyhive.com/vancouver/vancouver-affordability-new-homes-july-2017

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Municipalities trying to increase the rental inventory that now or soon will allow from 2-4 rental suites to be contained on a detached housing lot, through rental suites and laneway houses include Vancouver, North Vancouver, Coquitlam and Port Moody.  But what if you sell your house after benefitting from this?  The portion of a principal residence lot, such as detached laneway house, used to generate rental income could be subject to capital gains taxation when the property is eventually sold.  The portion of a house being rented out, such as a basement suite, would not necessarily trigger a capital gains tax, detached laneway houses are not so clearly defined.

When the entire property is eventually sold any gain realized on the laneway house portion will not be eligible for the principal residence exemption, the owner is required to track all costs associated with building the laneway house as well as keep records related to the original cost of the property, capital improvements made, the relative value of the land versus the main residence on the date of the deemed disposition and on the date of sale.

You could potentially lose a hefty portion of the principal residence exemption.  Homeowners should weigh the risk vs reward with laneway house rental income vs tax exemptions.

 

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