REAL ESTATE

REAL ESTATE Luxury home sold for $18.5 million gets tax break

by Carlito Pablo

Realtor Adam Major says a Vancouver property has everything to make a farmer happy.

Major, who keeps an eye on interesting real-estate deals and listings, is referring to 7275 Carnarvon Street.

The mid-century modern home sits on one-hectare of land in the Southlands neighbourhood, offering plenty of space to live and play.

The property includes a five-stall barn for horses and ponies, outdoor swimming pool, hot tub, golf practice area, gardens, pond, and an orchard.

The 7,000-square-foot luxury home also comes with a separate 1,500-square-foot caretakers’ home.

It’s truly one of a kind.

As the listing notes, “This ideally situated custom built home cannot be replaced under current zoning guidelines and has been updated and meticulously maintained by the owners.”

On June 28, 2021, the property sold for $18,500,000 in what is believed to have been the most expensive deal in that month.

“This home has many other amenities beyond the pool and putting green that the gentleman farmer will find appealing,” Major noted to the Straight.

Major—managing broker with Holywell Properties and CEO of the company’s realestate information site, Zealty.ca—said there are other reasons why the deal is interesting.

Major explained that the property is located in the province’s Agricultural Land Reserve, or ALR. This means that it qualifies for a tax exemption. “The rules on building megahomes on ALR land have been tightened up in the last few years, but not the exemption on the school tax payable,” Major said.

The Carnarvon Street property has a 2021 assessed value of $13,550,000. That’s broken down into $8,040,000 for land and $5,510,000 for improvements.

A tax report provided by Major shows that the land value of $8,040,000 qualifies for a $4,020,000 exemption on the school-tax part of the property-tax bill. Online, the B.C. provincial government explains that land within the ALR receives a 50 percent value exemption for school and hospital taxes.

“By my calculation, if school tax is 0.4 percent over $4 million, the homeowner will save $16,080 in property tax annually,” Major said. “What gentleman farmer doesn’t deserve a break!”

In 2019, the province tightened rules to end what the province describes as the “proliferation of large mansions and lifestyle estates in the ALR”.

The B.C. government goes on to say that such practices “inflate land prices and place agricultural land out of the reach of current and new farmers and ranchers”.

The legislative changes limit the total floor area for a principal residence within the ALR to a maximum of 500 square metres, or about 5,381 square feet.

Major noted: “That is partly why these ALR megamansions are so desirable. You can’t build them anymore, and you get a break on property tax.”

The property was sold for $18.5 million, which means that its selling price was 37 percent above the assessed value of $13,550,000. Major recalled that the Southlands property previously sold in 2018 for $13,850,000.

“The almost $5 million price increase over three years may be partly because of the government’s crackdown on ALR megamansions,” Major said. “They are now a rarer commodity, as you cannot build them anymore.”

Prior to 2018, the property sold for $2.1 million, in 2001, before the current luxury home with seven bedrooms and 11 baths was constructed.

Major noted that the property’s total property tax is “not cheap” at $60,418.50.

The realtor observed that this clearly shows that someone earning about $150,000 per year couldn’t afford an $18.5 million home. “If they can afford a home at all in Vancouver,” Major added. g

This estate home at 7275 Carnarvon Street in Vancouver is in the Agricultural Land Reserve, which is why the property qualifies for a 50 percent value exemption on any school and hospital taxes.

Hong Kong home prices top CBRE list of 39 cities

by Carlito Pablo

Vancouver realtor Winfield Yan says locals shouldn’t be surprised about one thing regarding people who are moving here from Hong Kong.

It doesn’t matter whether they’re Canadian expatriates returning for good or new immigrants from the former British colony, especially if they are homeowners in the special administrative region of China.

Yan notes that they are well positioned to buy property in Vancouver or anywhere else in Canada. “Hong Kong is very expensive. So if they sell their homes, they should be able to buy some very, very nice homes in Vancouver,” Yan told the Straight in a phone interview.

In June this year, the Canadian and Hong Kong offices of the CBRE Group, Inc. released their mother company’s “Global Living Report 2020”. In the report, the Dallasbased global real-estate-services and investment firm profiled the residential markets of 39 global cities.

Five of the top 10 most expensive cities are in Asia, with Hong Kong at the number-one position. Using American dollars, the CBRE report states that the average property price in the city is $1,254,442.

To complete the top five, also in U.S. funds, is Munich in second place with $1 million, Singapore at $915,601, Shanghai with $905,834, and Shenzhen at $783,855.

Sixth place is Beijing, at $763,498; Vancouver comes seventh at $754,617; Los Angeles weighs in at $717,583; Paris makes ninth with $650,555; and New York takes 10th spot with $649,026.

London, at $624,225, and Toronto, with a $617,942 price, didn’t make the top 10 cut but came in 11th and 12th, respectively.

The Straight spoke with Yan back in 2014 following the pro-democracy protests in Hong Kong called the Umbrella Revolution. During that time, Yan was helping Canadian expatriates of Hong Kong origins with residential purchases as they were intending to settle back in Canada because of the political situation in the Asian city.

China critics say Beijing is tightening its grip on the city. It has been a year since the Chinese government imposed a national security law on Hong Kong, on June 30, 2020. The law punishes crimes like secession and collusion with foreign forces with up to life imprisonment.

Yan and his family moved from the former British colony to Canada in 1970 when he was a boy. He’s deeply connected with the local Hong Kong community.

Speaking now, Yan said that he knows of a family from Hong Kong who arrived in Vancouver on July 1 this year, and they are settling here for good.

There are two siblings in this family, and one has been living in Vancouver for some time. The other sibling, who was previously based in Hong Kong, has a condo property in Vancouver that has been rented out. This latter brought her parents with her to Canada on July 1.

“The parents have the money, so they would decide to maybe buy a house, and all of them can live in the house together because the condo she bought was two bedrooms,” Yan said. g

Hong Kong’s skyline looks lovely from a distance, but the city’s home prices are extremely high. Photo by Serey Kim/Unsplash.