Vancouver luxury home sold for $18.5 million qualifies for a tax exemption—realtor Adam Major explains why
Realtor Adam Major says the Vancouver property has everything that would make a farmer happy.
Major, who keeps an eye on interesting real-estate deals and listings, was referring to 7275 Carnarvon Street.
The mid-century modern home sits on a one-hectare 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 orchard.
The 7,000-square-feet 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 be 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.
There are other reasons why the deal is interesting for Major, managing broker with Holywell Properties and CEO of the company’s real-estate information site Zealty.ca.
Major explained that the property is located in the Agricultural Land Reserve or ALR.
This means that the property qualifies for a tax exemption.
“The rules on building mega homes on ALR land have been tightened up in the last few years, but not the exemption on the school tax payable,” Major said.
The property at 7275 Carnarvon Street 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 million exemption on the school tax portion 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 around 5,381 square feet.
Major noted: “That is partly why these ALR mega mansions 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 crack down on ALR mega mansions,” Major said. “They are now a rarer commodity as you cannot build them anymore.”
Prior to 2018, it 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, like 7275 Carnarvon Street.
"If they can afford a home at all in Vancouver," Major added.