Tuesday, July 27, 2010

Property Transfer Cash Grab

I've been reading up on the British Columbia Real Estate Association (BCREA) Government Relations Briefs and I came across a little tid bit of information which really surprised me!

The Background:
The Property Transfer Tax is a tax implemented by our provincial government that applies to all home purchases (unless you're part of the First Time Buyer Program).

When you buy property and register it at the Land Titles Office, you are taxed 1% on the first $200,000 and 2% on the balance of your purchase.

The Reality:

It turns out the property transfer tax started in 1987 and was supposed to be a "Wealth Tax" with the 2% portion of the charge only applying to 5% of home sold. In 2009, the 2% portion applied to about 88% of homes sold. These are provincial numbers... imagine what the percentage is in Victoria.

Shocking.

In my opinion, this is a huge cash grab for the Provincial Government. The BCREA is working to have this property transfer tax abolished by 2012. Read more in their brief on sheleter taxes here

Tuesday, July 20, 2010

The Story of Stuff

Some thoughts on stuff

Anyone brought up by parents who lived through the Great Depression or the Second World War was probably taught to keep everything as a means of survival. I recently heard a story of a woman who was forced to move from Europe to North America with only one suit case. She left behind every childhood memory and consequently instilled in her children the importance of holding on to these keepsakes.

Others spend their whole lives spending money and accumulating “things” as a means for status or perceived practicality. Then there are emotional items such as wedding gift, birthday gifts or items which belonged to a loved one who has passed away.


My mother (and I) had a wakeup call after we lost our mother (grandmother) last year. Aside from grief, there was one other thing that had to be dealt with: the stuff. Days were spent going through possessions trying to either give away items to family members or sell anything of value. During this long process, it dawned on us “If we were to die tomorrow, how much stuff would my loved ones have to sort through?” Some see this as morbid; we saw it as an eye opening opportunity.

One woman and her family moved from Victoria across Canada. They packed away most of their belongings and got their home ready for sale. When an interested buyer looked through the home they offered to purchase all of the furnishings as well. It was probably a bit shocking at first, but after calculating the amount it would cost to transport all the furniture across Canada, it made sense to sell it. They are renting here, for now, with minimal possession and could not be happier.

There’s a real movement in Victoria to ditch large high maintenance houses for condos and townhomes where strata takes care of building maintenance. Many people I’ve met like the ability to lock the door behind them, go out of town and not worry about the security of their home. I’ve worked with several downsizers who are making the move from 2000-3000 square foot homes with ample storage into condo-size homes where they consequently must purge and simplify. It’s a long hard transition to make this type of move, but I’ve never met a single person who regretted it. The abandonment of stuff; freedom to be mobile; letting go of emotional baggage;

Another thing I’ve noticed is my generation has a tendency to either not want to or not be able to collect stuff. We’re too busy saving money to travel or spending money on partying to accumulate very much. Housing is often unaffordable for young people because we have no savings or accumulated debt from post secondary education.

In ways we are given the opportunity to take advantage of innovation which doubles as space savers. Mp3s & players instead of CDs or cassettes, laptops instead of desktops, digital movies on hard drives instead of shelves of DVDs/VHS. If you can afford to live in Victoria maybe you have a 450 square foot condo with no parking. Welcome to the world of fold up bikes, small condo couches with built in storage, coffee tables that store chairs, bar stools instead of kitchen tables… the list goes on.

Then of course there are people who look at all the material possessions in the world and realize none of it will make them happy. I can see rebellion burning in the eyes of my friends who choose to not support our consumerist society and contribute to the story of stuff. Buying experiences instead of things.