Beware the granny tax!
Or… If your mother-in-law wants to move in, you might have to move!
A recent survey of Canadian boomers found that a large proportion are either supporting their adult children, their parents, or in some extreme cases, both.
This is true in London, especially in Ward 9, a well-established family oriented community predominantly zoned for single-family residential living. Taxpayers in the area have paid their dues, raised their children, and often choose to remain in our family-friendly neighborhoods.
As the parents of boomers age, their ability to live on their own becomes more difficult, while the costs of seniors housing increase, if accommodation can be found at all. Perhaps the greater increase than the cost of seniors housing is number on the waiting list for seniors housing.
Over time, the question that Londoners will ask with increasing frequency and urgency is “can my mother move in with us?” Boomers did not plan for this. Some, according to the survey, are sacrificing vacations, and their own savings...
Other boomers are already dealing with another phenomenon, called boomerang kids. Same consequences.
Most homes here are large enough to accommodate a returning thirty something child in need of temporary financial assistance and shelter. Statistically, the survey indicates that two in 10 Boomer parents have a child aged 19 or over living at home. We know that the number of thirty something children living at home has never been higher.
So far, you've heard about all of this before, but you might not be aware of the granny tax!
Parents of boomers, boomers themselves and boomerang kids all want to preserve some privacy within these new living arrangements. Some families believe it appropriate to establish a self-contained unit in the basement, so that living in proximity, is still private. Grandmother can make tea and enjoy a quiet lunch, or son can come and go late into the night without using the front door. Boomer parents, once empty nesters, need not be awakened by microwave noises after midnight, again!
Did you know that to provide a self contained unit for granny or junior in a Ward Nine single family residential neighborhood requires a fee of $5,000, (was increased by 25%, January 1, 2010) payable to the City of London (plus building permit & hearing costs), with no guarantee that your request would be granted by City Hall? (Bylaw CP 18)
It is your home and it is your mother, but don’t put a kitchen in the basement for her without a Council vote & FEE!
PLUS, if the rezoning is permitted, your taxes will go up, based on an increase in assessment based on rezoning. When Junior moves out, or granny passes, will they be adjusted down? NOT!
Most citizens do not know of this tax bash until the urgency of their family situation dictates that someone moves in. And if there is no alternative than to have mother in the basement, the whole family might have to move to a multi family zoned neighborhood, just to make it living in London legal.
Or will you be ok with junior flipping the channels past the show you wanted to watch, again?
Are there other municipalities that permit families to stay together? And if they do, why doesn’t London?
More about this on BOOMER WEALTH RADIO January 9, 2010
