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.”

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

South Surrey boy, 11, hopes to raise $3,000 for Sources – and be Prime Minister

White Rock Coldest Night of the Year event to take place Feb. 22

Recharged Sharks aim for playoffs after ‘well-earned’ break

Bayside rugby club mixes youth with returning veterans in quest for men’s Div. 1 title

Looking back at ‘17 heady days’ in 2010

Effects of Vancouver-Whistler Games still being felt across the Lower Mainland

Guilty plea for one of two youth charged in August attack on White Rock senior

Trial dates for co-accused to be set Feb. 19; trial for linked stabbing death to begin January 2021

VIDEO: Kawhi Leonard wins first Kobe Bryant All-Star MVP award

Leonard scored 30 points and hit eight 3-pointers to lead Team LeBron to a 157-155 victory

Federal emergency group to meet on pipeline protests as rail blockades continue

There’s mounting political pressure for Trudeau to put an end to the blockades

VIDEO: Minister reports ‘modest progress’ after blockade talks with First Nation

Wet’suwet’en hereditary chiefs say Coastal GasLink does not have authority to go through their lands

B.C. man released from quarantined cruise ship in Japan

Because Spencer Fehrenbacher has American citzensip, he was evacuated by the U.S.

Henrique scores 2 as Ducks soar past Canucks 5-1

Vancouver tumbles out of top spot in Pacific Division

Trudeau cancels Caribbean trip amid pipeline protests across Canada

Protests against Coastal GasLink have disrupted rail service

B.C. VIEWS: Inaction on pipeline protests not a viable response

Columnist Frank Bucholtz on how the Coastal GasLink pipeline dispute got so bad

PHOTOS: Top 10 memories of the 2010 Olympics

Black Press Media’s Jenna Hauck, shares some of her most memorable images of 2010 Winter Games

#FoxForFiver: Support grows in B.C. to put Terry Fox on new $5 bill

Terry Fox’ Marathon of Hope raised money for cancer research

Most Read

l -->