This month, BCREA will make recommendations to improve housing affordability and tax fairness for BC homebuyers, as part of the annual consultation on the provincial budget.
BC's Liberal government has made tax competitiveness a cornerstone of its fiscal policy, except for the Property Transfer Tax (PTT). Ever since the PTT was introduced in 1987, it has been applied in the following way: 1% on the first $200,000 of the fair market value of a property, and 2% on the remainder. This static structure is entirely at odds with BC's dynamic real estate market, and places an increasingly unfair burden on homebuyers.
If the PTT is to remain, due to its contribution to provincial revenue, then it's time to restructure the tax to reflect market conditions and assist BC families, many of whom face the highest home ownership costs in the country. For this reason, BCREA will once more ask the provincial Select Standing Committee on Finance and Government Services to forward the following recommendations to the Minister of Finance for inclusion in the 2016/2017 provincial budget:
- Increase the 1% PTT threshold from $200,000 to $525,000, with 2% applying to the remainder of the fair market value.
- Index the 1% PTT threshold of $525,000 using the MLS® Home Price Index, and make adjustments annually.
BCREA believes a fair system of taxation and a thriving economy will help citizens throughout BC enjoy an enviable quality of life, and better position BC to attract businesses.
While BCREA has taken countless opportunities in the past 28 years to lobby for either elimination or mitigation of the PTT, the context of this year's consultation is somewhat unique. In recent weeks, BC Minister of Finance the Honourable Mike de Jong has speculated in the media about increasing the 1% threshold and possibly changing the structure of the tax. BCREA, 11 real estate boards and nearly 20,000 REALTORS® around the province are always interested in working with the provincial government on this issue.
The provincial budget consultation is undertaken every year by the Select Standing Committee on Finance and Government Services of the Legislative Assembly of BC. The all-party committee holds hearings and accepts submissions for about a month, and then releases a report by mid-November. To learn how to participate in the budget consultation process, visit www.leg.bc.ca/cmt/finance/budget-consultations.asp.
For more information about BCREA's position on the PTT, visit BCREA's website at www.bcrea.bc.ca/government-relations/shelter-taxes.