Arnold Shuchat PREC Real Estate Blog

Under new Federal legislation which came into force on January 1, 2023, the “Underused Housing Tax”, if you are a company that owns “residential” property as defined in the Act, you are required to file a UHT return, (Underutilized Home Tax) by April 30 of each year regardless as to whether the property is taxable under the legislation, or face a potential penalty of a minimum of $10,000. The wording of the legislation seems not to exempt companies which own condominium units, each of which is a legally separate property, from having to file the return.  Imagine being reassessed 3 years later with $10,000 fines applicable to each unit for each year passed in a portfolio of strata property holdings when the actual property itself was NOT underutilized or not subject to the tax based on simply a failure to file?! Make a note of this and make sure your accountant and your clients are aware.

For more information, consult: https://www.canada.ca/en/services/t...

In a recent ruling of  the Supreme Court of Canada in Annapolis Group Inc. v. Halifax Regional Municipality,  2022 SCC 36, property rights got a major boost.  It has long been argued that onerous zoning by a municipality is akin to “a taking of property” which should trigger compensation under the relevant Expropriation Act.  However, that has not been the law.  In the above case, the City of Halifax refused development applications by the appellant preferring park use.  The court held that although the test of whether an interest in property had been taken has been set out in Canadian Pacific Railway Co. v. Vancouver (City),  [2006] 1 S.C.R. 227, 2006 SCC 5  as: (1) whether the public authority has acquired a beneficial interest in the property or flowing from it; and (2) whether the state action has removed all reasonable uses of the property, there need not be an actual beneficial interest acquired if an advantage had been conferred...

Here are some graphs which clearly illustrate the state of our real estate market in the Metro-Vancouver area.

On the inventory side, listings are very similar to last year. On all three property types, the total inventory is up by around 11%:

As far as the number of days on market, contrary to the fear in continuous media outlets about a market crash across the country, the time to sell a property has not materially increased since last year.  It has gone from 11 days to 14 days across all property types. Most appraisals will base the market value price of a property on an assumption that the property is marketed in an open market for 3-6 months. The 14 days is akin to real estate liquidity.

However, looking at the actual sales side of things we can see a marked slowdown which should be an indicator that prices should drop.

From a product absorption view, the sales to active listing ratio is comparable to October 2019. Sitting in the low 20% area represents a much more balanced market...

This 5 minute video is a short legal history of how we got to the point where our government can intervene in a private contract. It imports references from the BNA Act, The Canadian Charter of Rights and most recently, The Property Law Amendment Act of British Columbia which provides buyers of residential real estate with a right of rescission with respect to contracts of purchase and sale for residential real estate.

https://www.loom.com/share/bda4a2f34e06490ca737f2db4596f6e0