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Skaha Hills
-
fussen
- Newbie
- Posts: 2
- Joined: Mar 2nd, 2014, 3:02 pm
Re: Skaha Hills
Vineyard is in and it looks like the showhome is done & maybe another 4 houses started.
I asked at the sales center a couple of months ago and then talked to a buyer last week so this is my understanding after just conversations, but it clarified things. The lease is 99 years, pre-paid via the developer so no lease payment renegotiations for 99 years and no lease payments by the homeowners as they're paid up-front by the developer. There is an option to renegotiate continuation of the lease for an additional 50 years as the end of the 99 year lease approaches.
The lease arrangements are the 'new style' format, as have been used by Westbank of late. PIB has relinquished rights to the use of the property to the federal Crown for 99 years with a potential extension of 50 years pending renegotiation later. So the lease of the land for the homes is between the developer/homeowners and the Crown, not PIB.
It's been structured so that there's no tax on the house construction and, being leasehold, there's no PPT. That's a lot of extra bang for a buck.
Leasehold properties are worth less than freehold. You purchase for less than freehold prices & of course you'd sell for less than freehold prices. But they don't tend to devalue because of an impending end to a lease until about the 30 year mark. Not many people are worried about resale in 60 years (even shorter horizons for the retiree market than family markets). A 99 year lease equals 3-4 generations which pretty much makes it look like a freehold property for at least 2-3 generations. Theoretically the properties should increase in value over time. Housing in southern BC is expensive and I expect there would be market for more economical alternatives. But, there's a smaller market for leasehold than freehold so the appreciation may not be what freehold appreciation will be.
Regardless, it's an interesting model. Between the Crown lease relationship and 99-150 years, PIB & Greback might have set themselves up for success on this one.
I asked at the sales center a couple of months ago and then talked to a buyer last week so this is my understanding after just conversations, but it clarified things. The lease is 99 years, pre-paid via the developer so no lease payment renegotiations for 99 years and no lease payments by the homeowners as they're paid up-front by the developer. There is an option to renegotiate continuation of the lease for an additional 50 years as the end of the 99 year lease approaches.
The lease arrangements are the 'new style' format, as have been used by Westbank of late. PIB has relinquished rights to the use of the property to the federal Crown for 99 years with a potential extension of 50 years pending renegotiation later. So the lease of the land for the homes is between the developer/homeowners and the Crown, not PIB.
It's been structured so that there's no tax on the house construction and, being leasehold, there's no PPT. That's a lot of extra bang for a buck.
Leasehold properties are worth less than freehold. You purchase for less than freehold prices & of course you'd sell for less than freehold prices. But they don't tend to devalue because of an impending end to a lease until about the 30 year mark. Not many people are worried about resale in 60 years (even shorter horizons for the retiree market than family markets). A 99 year lease equals 3-4 generations which pretty much makes it look like a freehold property for at least 2-3 generations. Theoretically the properties should increase in value over time. Housing in southern BC is expensive and I expect there would be market for more economical alternatives. But, there's a smaller market for leasehold than freehold so the appreciation may not be what freehold appreciation will be.
Regardless, it's an interesting model. Between the Crown lease relationship and 99-150 years, PIB & Greback might have set themselves up for success on this one.