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

Canada Women’s Rugby 7s Team land at home after series triumph

Next stop at Langford offers Olympic qualification

Group aims to raise $250k ahead of Sarah Beckett Playground’s August opening

Not yet halfway to goal for equipment costs, but plans for upcoming fundraisers are underway

Second earthquake in less than two hours strikes off Vancouver Island

The first earthquake happened at 1:27 p.m., the second at 2:44 p.m.

Saanich soccer player survives bout with flesh eating disease

Harinder Sandhu picked up the disease after soccer game

Two-sailing waits continue Victoria to Tsawwassen

Backlog continues despite extra sailings over Easter

Homeless activists outside Notre Dame demand ‘a roof too’

Wealthy people have donated millions to effort to rebuild cathedral after devastating fire

B.C. VIEWS: NDP’s lawyer show is turning into a horror movie

Court actions pile up over pipelines, car insurance, care aides

United Way opens grants to help charities tackle social issues

Charities north of the Malahat can apply for grants $2,000 to $20,000

Sri Lanka invokes war-time military powers after nearly 300 killed in Easter bombings

Sri Lanka’s minister of tourism says 39 foreign tourists were killed in the Easter Sunday attacks

Man’s body found in popular Cowichan Valley hiking area

Police say death not suspicious after discovery in Stoney Hill area overlooking Saltspring Island

Multiple sailing waits as BC Ferries deals with Easter Monday traffic

89 extra sailings had been added to the long weekend schedule

Vancouver Island-based company provides glass alternatives to plastic straws

Enviro Glass Straws now producing more than 60,000 straws each year

Ex-mayor of northern village claims its drivers are overpaying ICBC $1,800 a year

Darcy Repen says data shows Telkwa households are being ripped off for car insurance

Most Read