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

City of Fernie advances truth and reconciliation initiatives

The City of Fernie has taken steps towards advancing reconciliation through the… Continue reading

Stuck in the sweet spot between youth and old age

Seventy-year-old Dave O’Haire, capped in a felt hat with feathers, walks down… Continue reading

UPDATE: Wildfire near Sparwood under control, suspected person caused

UPDATE: Friday, August 23, 2:00 p.m. The Robert Creek wildfire is now… Continue reading

Elk River reclaims property as its own

Laws make it harder to protect private land than ever before says farmer, local government

Black Press Kootenay Career Fair underway in Cranbrook

Today, Thursday, August 22, around 40 employers will be waiting to meet potential new employees

B.C. sockeye returns drop as official calls 2019 ‘extremely challenging’

Federal government says officials are seeing the same thing off Alaska and Washington state

Independent cannabis store blazing uncharted trails in Fernie

Stick & Stone Cannabis Co., in Fernie opened its doors and welcomed… Continue reading

Groups ready campaign to help young voters identify ‘fake news’ in election

The media literacy campaign to focus on identifying misinformation and suspicious sources online

Big rally in northern B.C. draws attention to continuing lumber crisis

Mayor Joan Atkinson says about 400 workers have been directly affected by the closure of the Canfor mill

Orangeville Northmen take Minto Cup at Langley Events Centre

Swept best-of-five series 3-0 over Victoria Shamrocks

Expanded support to help B.C. youth from care attend university still falling short

Inadequate support, limited awareness and eligibility restrictions some of the existing challenges

Ethnic media aim to help maintain boost in voting by new Canadians

Statistics Canada says new Canadians made up about one-fifth of the voting population in 2016

UPDATE: Crown cross-examines B.C. father accused of killing daughters

Andrew Berry is charged in the deaths of six-year-old Chloe and four-year-old Aubrey in 2017

Dog attacked by river otters, Penticton owner says

Marie Fletcher says her dog was pulled underwater by four river otters in the Penticton Channel

Most Read