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

Victoria seniors want to know more about marijuana

Four presentations on the medical properties of cannabis for seniors come to Victoria

Victoria gears up to axe free parking on Sundays

Council vote puts Sunday parking fees towards bus passes for youth

Parents still seek clarity for future of Victor School

Motion avoided to remove special needs Victor School from boundary review proposal

Oak Bay one step closer to deer immunocontraceptive test

Up to 80 deer could be given ‘birth control’ vaccine in the fall

Black Press readers share photos of their favourite critters on #LoveYourPetDay

Greater Victoria is raining cats and dogs…and snails and goats

Greater Victoria Wanted List for the week of Feb. 19

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Ontario man accused of killing 11-year-old daughter dies in hospital, police say

Roopesh Rajkumar had been hospitalized with what police described as a self-inflicted gunshot wound

Manitoba ‘pauses’ link with ex-B.C. premier Gordon Campbell after allegations

Campbell had been hired to review two major hydro projects

City of Port Alberni cancels tourist train operations for 2019

Steam train to McLean Mill is out of commission for repairs; city wants to re-examine rail costs

Heritage minute features Japanese-Canadian baseball team, internment

The Vancouver Asahi baseball team won various championships across the Pacific Northwest

UPDATE: Woman, off-duty cop in critical condition after stabbing outside B.C. elementary school

The officer was interceding in an alleged assault when he and the woman were stabbed

$10-a-day child care not in 2019 budget, but advocate not irked

Sharon Gregson with the Coalition of Child Care Advocates of B.C. says NDP on track to deliver promise

B.C. Seniors Advocate questions labour shortage in care homes

Are there really no workers, or are care aide wages too low?

Most Read