Home construction prices in Canada...what the heck is going on?

[tcartwri]

Those $600,000 homes are being built on 30'- 50' lots depending on area.

In Vancouver, they buy $600~800K homes and tear them down to build new.

 

[WilliamBos]

In Vancouver, they buy $600~800K homes and tear them down to build new.

WOW! They build them bigger?

 

[tcartwri]

WOW! They build them bigger?

Nope, they just want the lot it's on. Then they build to suit their taste. It's crazy.

 

[clemsonfor]

50%.. no where close. Old wives tail. tax increase as your income increase.

family 4 at $30,000/year can be income tax free. Lots of tax credits. First $10,527 is 100% completly tax free for each person in the family. Lots of other deductions for children, age, farmers, etc...

Then whats left after all the credits gets taxed.

FEderal Tax:
15% first $42,707 after deductions, then
22% on next $42,707
26% on next $46,992
29% of taxable income over $132,406.

PLUS

Provincial Tax (Manitoba) Alberta pays flat 10% of taxable income
10.8% on the first $31,000 +
12.75% on tnext $36,000, +
17.4% on next $67,000



so on $1 you earn after say $150,000 then close to 50% on that dollar but all the money before then is taxed much less.
2 people working, $40,000 per year and a couple of kids can get away with almost 0% tax if they play it right.

So looking at your figures, and not really familiar with your tax system, what deductions are etc i would be at least 15% tax BEFORE my provincial ta which looks like something like 11%!!!

I think if i remember right i paid something like 13% fed effective tax rate and i think SC tax is 7%? really dont remember? So yep thats higher than us here but not terribly higher but still 5% or so higher which on my income means another $4k/year, which is not chump change.

And in response to the guy who said not just socilaized systems etc. The number of people in any given city or country should not matter, unless you have a lot of leaches sucking on the bottom half (like our country seems to be getting). My point is each person is paying taxes unless they have lower income and kids for deductions. But if your not providing social programs whats the money going to, for all those people. In theory if your city/county is 1 million people or 5 million people you still will have the same ratio of wadge earners. The larger city will have higher costs associated with government, hospitals, roads, schools etc, but they have a higher tax base to draw from. Really a smaller city will be hurt more as they still ahve to have roads bridges schools etc and less wadge earners to provide the revnue for it all. And like what the guy from michigan said many small towns are getting older as the young leave to find work in larger areas. Many of the older generation may be already retired?

 

[Mike476]

And in response to the guy who said not just socilaized systems etc. The larger city will have higher costs associated with government, hospitals, roads, schools etc, but they have a higher tax base to draw from. Really a smaller city will be hurt more as they still ahve to have roads bridges schools etc and less wadge earners to provide the revnue for it all. And like what the guy from michigan said many small towns are getting older as the young leave to find work in larger areas. Many of the older generation may be already retired?

Your last two points are exactly what I'm talking about. Canada is that smaller city, I guess a better comparsison might be what would the taxes in California be like if they were responsible for the maintenance / upkeep of all the highways bridges etc for the rest of the USA.

 

[tnmike]

Wadges like that you can easily afford $2k/month in payments

Don't forget the $250,000 dollar down payment you needed to get into the $350,000 mortgage.. It would take most people a lifetime to save that much even if they did make $40/ hr. I used 4.00 % interest in my theoretical loan. If the majority of Canadians have this much mortgage debt load it sounds like another real estate bubble in the process of bursting.

Color me stupid but I have never liked being in debt. It has kept me from having the latest new toys but I sure sleep well.

 

[clemsonfor]

I see your point but canada like rural areas ot the US have vast areas with sparse road networks. This is what your Federal taxes cover. The provincial taxes are local stuff like shools, fire, loacal officals, local roads. All those other things would handled by the big gov. Yes i know canada is roughly the size of the US but with the Pop of say california. But Isn't something like 50% is withing 100miles of the US border? I think its something like that, i really dont know but have heard that before?

But i do see your point you made there still is raods to these remote locations that have to be maintained. But another thing is that these large saleries, according to the tax numbers a falily making $150k with a few kids etc dosent pay all that high of taxes according to Boaky. So he has all this money or similar to a comparable US household. WHY does stuff still cost so much? The individual is not payig for all these roads and schools with his after tax money?

 

[Mousefield]

There are many taxes and fees that we have to pay. Someone suggest a couple with 2 kids and both making $40,000. each would pay little or no tax. Think that’s wrong. You pay tax on the gas for your car, it’s on Hydro, phone, cable/satellite, internet, almost anything you buy or pay for except groceries has 12% tax (in BC).. You have to pay medical fees (we pay $116 per month for the 2 of us). Garbage costs us $134 per year and on and on. There are lots of fees that are not called taxes but you do have to pay.

 

[clemsonfor]

You have to pay medical fees (we pay $116 per month for the 2 of us). .

I have what is called the cadilac health plan as a federal employee and still pay double that for my medical care a month for the family. And we still have copays etc.

 

[MotorSeven]

The flaw to your math is in the number of guys who are building this house. While in theory it would be possible, and I've honestly thought about doing just that, the reality is that it will take a couple dozen guys to build it. You are also assuming that the $400K is all going towards labor or profit. In my experience, when homes get into that price range, the fees and permits become rather significant. I would say ten percent is going to be fees and permits, but have heard stories of it being a lot more.

Most General Contractors who are building spec homes are paying wages and trying to make 15 percent on the job. Around here, there are several houses in that price range, but quite a few more square that have been on the market for seveal years. The GC isn't making anything until is sells, but all the workers who built it have been paid. The longer it takes to sell, the less money the GC makes because of interest payments on the money to build it and to pay the sub contractors.

Building a custom home for a client means quicker pay, but usually a much smaller percentage of the job. Usualy ten percent, but that varies from place to place and job to job.

Nope, the owner has already paid for all the permits.

And I have worked with my neighbor on his builds and he has a steady crew of 3(4 including himself). They do sub things out, so yes if you count that a dozen would be accurate, but the outside help is for specialty things like footers, slab finishing, Hvac, rock chimneys, etc. His crew does a lot and they can turn key a house in 6 months. I get called in for the roof work since apparently I am too stupid to be "es-scared" of heights...or it could be I am the only one that owns a harness, ropes and carabiners. He has done houses by the quote and by the hour.....your gonna cringe, but his current hourly rate is $15, his crew $10 ea. Keep in mind this is a severely depressed area and that is actually a decent wage....but they work their butts off for it. I know it's apples to oranges, but these oranges in Canada are from the planet Mars.