See end of post for update on media speculation about Mayor's new digs.
Seems our post yesterday about Gregor Robertson, the Mayor of Vancouver, putting his home up for sale created a bit of a stir. Several newspapers have picked up on the story this afternoon including the Province and MetroNews. From the Georgia Straight newspaper:
Mayor Gregor Robertson's office has issued a statement after a local blogger revealed that his home was for sale.
In a post entitled “Guess who’s trying to cash out of the real estate market in Vancouver?”, the Whispers from the Village on the Edge of the Rainforest website provided the listing information for the mayor’s six-bedroom and four-bathroom residence at 912 West 23rd Avenue.
It’s being advertised for $1.95 million.
“So it begs the question, if even the Mayor of Vancouver is bailing on the Vancouver real estate market, has the slide begun in earnest?” the blog cheekily declared.
Responding to media inquiries, the mayor’s office released a statement saying the family has moved farther west, to Kitsilano.
“The mayor’s family is selling their home and downsizing now that their kids have graduated high school,” reads the statement. They’ve bought a new home within a block of York Avenue in Kitsilano, but the location isn’t being disclosed for “security reasons.”
Apparently the revelation of the sale has triggered a whole series of political questions. According to the press statement:
“In recent weeks the Mayor apprised senior staff, including the City Solicitor, of this property transaction and they were requested to provide advice and a legal opinion on any possible conflict that the Mayor might be in with regard to future decisions of Council related to the Point Grey/Cornwall bike corridor. The City Solicitor has informed the Mayor that there is no legal conflict with voting on matters related to the Point Grey Cornwall bike and pedestrian safety upgrades at this time.”
The Georgia Straight wonders if the move is part of a broader set of political intrigue:
What's intriguing about the move is that Robertson now lives much farther away from his workplace at Vancouver City Hall.
Normally, cyclists like to live closer to the office.
Perhaps this suggests there could be federal political implications for Robertson, who is sometimes viewed as a future candidate for the Liberal Party of Canada.
His old residence is in the proposed new riding of Vancouver-Granville, which is being carved out of parts of other ridings in the city. There is no MP for this riding yet.
His new home is likely in Vancouver Quadra, which is represented by Liberal MP Joyce Murray. That's because most of York Avenue is west of Arbutus Street, which is the boundary for the riding. East of Arbutus is within Hedy Fry's riding of Vancouver Centre.
Murray ran against Justin Trudeau in this year’s federal Liberal leadership race.
Whoever becomes the Liberal candidate in Vancouver Quadra is likely a shoo-in to get elected to Parliament.
Could Robertson be planning a challenge against Murray for the Liberal nomination after he wins a third term as mayor in 2014? Stay tuned.
Oh my. Did we start something?
So what do you think. Is it simple downsizing? Capitalizing on bubble profits? Or a move borne of broader political considerations?
Update
Update
The media seems to be all abuzz with the Mayor's new home. And with the Mayor's press release declining to release the location of his new home for 'security reasons', the frenzy has only intensified.
Let's face it... the Mayor's address is public knowledge on nomination forms, why the secrecy now? Is it because of the bike lane proposal along York in Kitsilano... just steps away from the Mayor's new digs?
This just in on twitter:
From the realtor description:
Show-stopping ocean and mountain views abound from this outstanding, beautifully designed and renovated ½ duplex tucked away on a quiet street in Kitsilano within ½ block of the beach. The home of an award winning interior designer that has graced the pages of many prestigious design publications, this property has just hit the news stands in the special interest Canadian House and Home 2008 ‘Makeover Issue". The unique multi-level flooplan offers 2 bedrooms, 2½ baths, den, office and 3 large ocean view decks. Every detail was masterfully considered in the extensive renovation. Gorgeous quality finishes include kitchen with professional grade stainless steel appliances, hardwood floors, new bathrooms with limestone, porcelain and mosaic tiles, steam shower and heated floors, built-in speaker system, 42” TV with B/I surround sound, built-in storage, and gorgeous designer lighting and fixtures. Fabulous outdoor living spaces include 3 gorgeous view decks (one with gas BBQ hook-up and over-head mounted gas heater) and the privately set Italian style garden with a covered spa hot tub area. This home has ample heated storage with B/I wine storage and a single car attached garage. A stunning home and an absolute must see!
(google streets image of house removed)
We're sure the neighbours are thrilled. You can read BIV's story here.
Follow up post: July 11, 2013 - Housegate: When did the Mayor buy and when did he know he would buy there?
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What would we do without you Whisperer. Good work. Can you please make him respond to the corporation ownership thingy now?
ReplyDeleteRazor sharp as usual Whisp.
ReplyDeleteKeep up the great work.
Downsizing! He's got a weird looking huge old 5 bedroom and the kids have mostly moved out. I'd sell and move too. How can you blame him?
ReplyDeleteThey graduated high school. Does this mean they have moved out? I know that most kids don't move out at 17 years old, unless you count the fact they are going to out of town college for 7 months out of the year. No, that isn't the real reason they are moving. Try telling the truth once in awhile Gregor, Vancouverites aren't the idiots you think they are.
Delete>Try telling the truth once in awhile Gregor,
Delete>Vancouverites aren't the idiots you think they are.
Uh, the comments here aren't bolstering your case.
I know Gregor. His kids are grown up, so he's downsizing his house - people do that EVERY DAY here in Vancouver. he's going to a nice part of town because he can, just like you would. What on earth is the big freaking deal ?
Hmm. You sound like an apologist for the mayor. Do you work at City Hall? Are you a member of Vision Vancouver? This is very suspect.
DeleteThere is more to this story than meets the eye, that's for sure....
ReplyDeleteThere's much in the way of advantages to holding your residence inside a corp. CRA requires the corp to be paid Fair Market rent. That money then has to come out of the corp eventually and is taxable.
ReplyDeleteSo unless they made Hollyhock their principal residence, it far more tax efficient to hold a home in personal name because the capital gains are exempt.
I don't think there's much to the corp ownership other than basic tax planning for someone who held a corp prior to buying this house.
I respectfully disagree.
DeleteI think you answered this queston already - if you have not already utilized the "principal residence exemption", you would have to be an idiot to hold property through a corporation. It would appear that Gregor and his wife use this property as their principal residence.
There is no "principal residence exemption" available to corporations.
In a corporation, 50% of the gain is taxed. The tax rate on this 50% is around 44%, so you'd be looking at an overall tax rate of 22%. The corporation would be able to get about nearly half of this 22% (eventually) refunded, but only if it, in turn, pays-out a dividend to its shareholders, who would then pay tax at a personal level. Depending on the recipient's income level, the personal tax paid on any dividends received from the corporation could range from 0% to around 40%.
However, keep in mind that the "other" half of the 22% corporate tax paid would not be refundable - this is tax paid by the corporation that can never be recovered. Compared to the zero tax paid under a "personally owned" scenario, you can see how this portion is "dead money".
Plus, there is a "time value of money" issue here - the corporation pays the tax up-front; any corporate tax refunds would probably not be received until later.
All in all, I would say that it would be absolutely stupid for most people to own their residence via a corporation.