JOANNE LEE-YOUNG (VANCOUVER SUN) - Upcoming changes to what can be taxed as capital gains is spurring a flurry of property sales, according to realtors and others in the housing market.

“We are closing five transactions ahead of June 25. The speed has been unprecedented,” said Mark Goodman, principal at Goodman Commercial Inc., which specializes in sales of multi-family apartments, commercial properties, development sites and land.

One of the five deals he closed is for a 43-suite, 10 storey concrete rental tower in the West End with panoramic ocean and mountain views that was listed at $22 million. Another is a Kits Point waterfront development site with beach access that was listed at $14.5 million.

Usually, there is a gap in time from when a property goes under contract to when a sale is completed so buyers can do their due diligence or get financing.

Instead, there has been a “turbo-charge” to getting these deals done, said Goodman, adding that buyers and sellers have both been benefiting.

The new measures, which were announced in the 2024 federal budget, will mean changes for businesses and individuals when it comes to paying taxes on their capital gains.

A capital gain is the difference between what is paid for an asset, be it an apartment building, condo unit or stocks, and its sale price.

Currently, 50 per cent of capital gains are taxable. After June 25, the so-called capital gains tax inclusion rate for corporations and trusts will move from 50 per cent to 66.7 per cent, or from one-half to two-thirds, of capital gains that are taxable.

For individuals who have gains that are over $250,000, the rate will move from 50 per cent to 66.7 per cent. For individuals with gains that are under $250,000, the rate will stay the same at 50 per cent.

Every sale is different, but in order to hit the June 25 deadline, some sellers have been more flexible with conditions and pricing, knowing that they will make up the difference by reducing their exposure to the changes in capital gains taxes.

One of the five sales was unconditional, according to Goodman.

“The sellers were very happy to beat the (June 25) date,” said Goodman.

Goodman said lawyers are drawing up closing papers that will be signed in a few days for the fifth deal. Including this sale, his company will have done a total of 10 transactions this year with five he attributes to being conducted ahead of June 25 specifically because of the incoming tax changes.

All five of these were long-held properties that have been in different families and owners for decades.

Laurinder Keenan is seeing another mini-trend. For almost 20 years she has run a business that does regular tenant checks on investment properties that are long-term rentals to make sure they aren’t being used for meth labs or grow-ops and comply with insurance requirements.

Over that long period, the number of properties in her stable has fluctuated between 400 to 600. In the last four months, however, she has been losing a larger number than normal as owners sell properties in order to avoid, she thinks, the implications of the changes to capital gains taxes on June 25.

​“It’s been a drop of about 20 per cent. It’s the biggest I have ever had,” said Keenan. She thinks that other small business owners who offer services to investors such as property managers are likely seeing a similar situation.
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“If you bought a one-bedroom place 20 years ago for $250,000, it would have gone up significantly in value,” said Keenan, referencing the potential capital gains exposure for some property owners.

These aren’t owners who are selling their units because of the recent regulations for short-term rentals, she said: “These are long-term rentals that have been around for a long, long time.”

KENNETH CHAN (DAILY HIVE) - Mark Wednesday, January 24, 2024, on your calendar, as this is the day Vancouver City Council is scheduled to review and decide on the policy statement for the massive First Nations-led Jericho Lands neighbourhood development in West Point Grey.

This comes after the release of the draft policy statement in early December 2023. The planning and public consultation process for creating the policy statement began in early 2019.
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The policy statement acts as an area master plan to guide the project’s future rezoning applications.

Unlike Squamish Nation’s Senakw project, the 90-acre Jericho Lands site is not on reserve, as it was a former military installation acquired a decade ago by a partnership between MST Development Corporation — the private real estate development entity wholly owned by the Musqueam, Squamish, and Tsleil-Waututh First Nations — and federal Crown corporation Canada Lands Company. For this reason, this project needs to follow the City of Vancouver’s bylaws, policies, and approval processes, just like other developments.

ccording to a newly released City staff report today ahead of next week’s decision, it is stated that Jericho Lands will be built in four phases over 25 years.

The estimated value of the Jericho Lands’ public benefits package is now revealed to be about $1.3 billion. This includes about $550 million for the new 50,000 sq ft community centre, 10,000 sq ft library, five childcare facilities for up to 259 kids and potentially 240 after-school care spaces, 20 acres of parks, 10 acres of open spaces, social and cultural spaces including an outdoor event-friendly venue for up to 2,000 people, and supporting utilities and public works infrastructure. The vast majority of the public benefits value comes from setting aside at least 20% of the residential floor area for about 2,600 social housing units, estimated at approximately $760 million, although it is expected this will require funding assistance from the federal and provincial governments.

This does not include any consideration of a potential cash contribution towards the construction of the Jericho Lands subway station in the middle of the development site for the future SkyTrain Millennium Line extension between Arbutus and the University of British Columbia (UBC). But the project has already offered the required land needed for the subway station, which would be integrated into high-density tall towers.

At the very earliest, the UBC SkyTrain could be ready by the early 2030s. The provincial government is currently leading the advanced technical studies and business case work supporting SkyTrain extension, which is expected to reach completion by late 2024. This SkyTrain project is one of the key 10-year priorities for TransLink and its Mayors’ Council, and it still needs billions of dollars in funding from the federal and provincial governments.

It is noted by City staff that if the UBC SkyTrain extension does not go ahead or if the route and station placements change, the policy statement and phasing strategy for Jericho Lands will need to be “reviewed,” suggesting the level of density and uses outlined in the policy statement are made possible by the existence and placement of both the on-site Jericho Station and the nearby off-site Alma Station just to the east.

The subway station also supports the design of establishing a car-light neighbourhood that prioritizes active transportation, with a network of pedestrian and cycling pathways crisscrossing the site. This station would also be further directly supported by a bus exchange, accessed from West 4th Avenue.
City staff also state the significant residential population of the Jericho Lands will increase local school enrolment by between 550 and 850 elementary students, and between 450 and 750 secondary students. On-site space will be set aside for a new public elementary school for up to 550 students, located next to the new community centre, but the added enrolment of secondary students can be accommodated at the area’s existing school facilities.

As well, West Point Grey Academy, an independent elementary and secondary school currently located on the site, could potentially return in a new space integrated into mixed uses. This would be subject to a lease agreement between the school and First Nations.
Across all uses, the total building floor area on the Jericho Lands will reach up to 13.5 million sq ft, including residential space for about 13,000 homes accommodating 24,000 residents. Currently, about 13,000 people live in the entire West Point Grey neighbourhood.
In addition to setting aside 20% of the residential floor area for social housing, at least 10% will be below-market rental housing. Conventional strata ownership homes will not be available, as the First Nations would like to own the land in perpetuity. Instead, the only ownership option will be leasehold strata.

At least 750,000 sq ft of office, retail, restaurant, hotel, cultural, and creative industrial spaces for about 3,000 on-site jobs.

There will be dozens of high-rise towers — reaching up to 49 storeys for the three “Sentinel” towers, where the subway station will be situated — along with numerous mid- and low-rise buildings.

The project has its opponents, too, with local resident group Jericho Coalition reiterating their desire earlier this month for a lower-density project with 7,200 homes for about 16,000 people within low- and mid-rise buildings. They assert that the proposed high-rise tower concept could potentially puncture the aquifer below the site and that the policy statement process is missing a hydrogeological study that could identify any potential geotechnical issues with tower placement and other uses. Hydrogeological studies are typically only conducted during the rezoning application stage, which will be the next step for the Jericho Lands if the policy statement is approved.

“Without the critical hydrogeological study that covers the potentially serious groundwater issues, the draft policy statement is woefully incomplete – because the whole Jericho Landsproject could have to be changed entirely,” said Murray Hendren, a retired environmental engineer and spokesperson for the group. Puncturing the aquifer and a release of significant groundwater could increase the risk of erosion, sinkholes, and ground subsidence.

Others have more recently asserted that the recently released updated assessed property values by BC Assessment show that the single-family detached houses closest to the Jericho Lands development site had decreased their values.

​MST and CLC went through a similar process through the municipal government for their Heather Lands project to redevelop the 21-acre former BC RCMP headquarters just west of Queen Elizabeth Park. The policy statement for the Heather Lands was approved in May 2018, and a site-wide rezoning application was approved in June 2022.