With so many fees (Realtor Commission, Property Transfer Taxes, Legal Fees, Inspection fees, Appraisal Fees, Property Taxes, Strata Fees) attached to buying a home, its a wonder ,quite possibly a miracle that anyone can actually afford to buy a home in BC.
Property Transfer Taxes is an incredible 23 times more than it was in 1987.
Fighting back, the B.C. government is finally reviewing the outdated property transfer tax (PTT), suggesting slight changes that will favour first-time and low-end buyers, while still maintaining its windfall (a record $1.1 billion this year) for the provincial treasury.
The BC Real Estate Association (BCREA), to its credit, is leading the long campaign to adjust the tax, which is still based on 1987-level prices. In those days, 95% of Vancouver-area homes cost less than $200,000, the cutoff for the 1% PTT rate. Today, virtually all homes in Metro Vancouver sell for more than $200,000, where the bite out of the seller moves up to 2%.
That pumps up today’s PTT take on an average ($700,500) Metro Vancouver home sale to $12,010, a whopping 770% increase from 1987. On a median detached west-side house the PTT take today is around $56,000, more than 23 times what it was in 1987.
The B.C. government should step up and create a premium tax rate for foreign buyers, as is done in cities like Singapore, Hong Kong and London. Discriminating in favour of residents acknowledges the importance of affordable housing as a foundation of a healthy community, rather than as a pure investment vehicle. The premier fears that this would send a negative signal to foreign investors of all stripes in all industries, a stretch I don’t understand. If offshore buyers are choosing to park money by pushing locals out of the real estate market, why can’t we raise the price of parking?
The federal Liberals have said they will “review escalating home prices … and consider all policy tools that could keep home ownership within reach for more Canadians.”
We would like that very much.