B.C. eyes luxury tax on high-end property

Property transfer tax expected to produce $200M windfall for B.C. government this year, adding to housing cost pressure

Condo tower construction: increasing property transfer tax on high-end homes could be used to reduce tax load for lower-priced properties.

A roaring real estate market is expected to generate $200 million more than the province expected in property transfer tax this year, further pushing up housing costs in urban areas that are already beyond the reach of many people.

Finance Minister Mike de Jong says he is working on new ways to reduce the burden of a tax that hits properties every time they are sold. That could include a higher rate for high-priced properties, as suggested by Vancouver Mayor Gregor Robertson. He proposed it as a way of discourage property flipping in a city that sees bidding wars for all but the most costly homes.

Since the tax was brought in by former premier Bill Vander Zalm in 1987, its take has grown to more than $1 billion a year. Since its inception, it has charged one per cent on the first $200,000 of the home purchase price and two per cent on the rest, taking about $10,000 on the sale of a $600,000 home.

De Jong said this week he is considering adding a third step for high-end properties, with revenues used to reduce the burden on middle-priced homes. Another option considered for next February’s budget is to raise the exemption for first-time buyers, currently spared the tax up to $475,000.

“How many first-time buyers are purchasing homes in excess of that is a question that deserves to be asked before we tout a further reduction of that threshold,” de Jong said.

Statistics Canada reports that Vancouver’s housing price index was up 1.6 per cent in July, compared to the same month last year. Victoria’s index fell by 1.5 per cent.

Premier Christy Clark said in February she wants to eliminate the property transfer tax in the long term, once the province’s debt is reduced. De Jong’s financial update this week showed the province paying down operating debt accumulated since the recession of 2008-09.

NDP finance critic Carole James said the province is expecting a $277 million surplus this year, most of it accounted for by the windfall from property transfer tax.

“For an economy to rely on a hot housing market in the Lower Mainland and [Vancouver] Island is a problem,” James said. “We need a diverse economy.”

 

Just Posted

Resident raises concerns over Golden Landfill

A local resident is saying the landfill is becoming a hazard to her property and possibly the town.

Taking action on violence against women

The Golden Women’s Resource Centre set up a memoial at the fountain on Wednesday, December 6.

Man who pledged to give B.C. hockey team millions charged with fraud

Mike Gould has since repaid $8,000 he allegedly owed Cranbrook restaurant, owner says

Columbia River Treaty to be renegotiated in early 2018

News came in a Tweet from the U.S. Department of State

VIDEO: Average Canadian food bill to rise by $348 in 2018

Atlantic Canada and B.C. will see the most increases for consumers

Myers high on Canada

AT RANDOM: Mike Myers says it right, eh

B.C. government to launch coastal ferry review in January

The Province will begin a comprehensive review of the coastal ferry service in British Columbia in 2018

Federal Crown drops appeal after charges against pot activist dismissed

Dana Larsen said he was served notice at his home in Vancouver and the case was to be heard July 2

Prince Harry and Meghan Markle to marry May 19

Kensington Palace announced the date to the public Friday

#MeToo at work: How reporting sexual harassment works – and how it doesn’t

British Columbians have four options to report harassment or assault, but none of them are easy

Debt-to-household-income ratio rises in third quarter

Total household credit market debt grew to $2.11 trillion in the third quarter

PART I: How Prince Rupert schools teach Indigenous language to hundreds of students

A multimedia series with videos and photos from children’s Sm’algyax classes on B.C.’s North Coast

B.C. Mountie told to resign after texting teenage sex assault victim

RCMP documents say Const. Brian Eden sent sexually inappropriate photos to 17-year-old girl

Most Read