PTT thresholds: REBGV makes housing affordability recommendations to province
At a glance (3 minute read)
- REBGV is advocating the government for changes to the PTT and increase the supply of housing.
- The government should commit to a broad-based review of the PTT, and raise the price threshold.
- They should also mandate inclusionary zoning to allow the construction of missing middle housing, while encouraging local governments to allow the stratification of secondary suites, laneway houses, and other accessory dwelling units.
The Real Estate Board of Greater Vancouver (REBGV) made three recommendations on how to make home ownership more affordable during consultations with the provincial government in June 2022.
Each year, the Select Standing Committee on Finance and Government Services holds a public consultation to hear recommendations on how to spend next year’s provincial budget.
For more than 35 years, REBGV has contributed to these discussions by advocating for greater housing affordability through reducing the property transfer tax. In recent years, recommendations to increase housing supply have also been added.
This year, REBGV urged the provincial government to:
1. Commit to a broad-based review of the PTT
2. Raise the PTT price thresholds
- The FTHB Program PTT exemption threshold for resale homes should be raised to $750,000 from $500,000 to match the threshold for buyers of new homes. This would minimally impact PTT revenue.
- Increase the 1% PTT threshold to $750,000 from $200,000 for all home buyers.
- Index the PTT thresholds to move with the assessed values of residential (Class 1) and make annual adjustments to the thresholds for the First-time Home Buyers’ Program exemption and Newly Built Home Exemption.
3. Increase affordable housing market supply
- Pre-zone land and infrastructure for missing middle market homes including smaller-lot townhouses, row houses with basement suites, laneway homes, duplexes, triplexes and fourplexes. Newly created supply coming onto the market increases the number of resale listings and moderates the sales-to-active listings ratio, ultimately reducing price pressure when new and existing home owners buy new homes.
- Encourage local governments to amend zoning bylaws to allow stratification of coach houses, laneway houses, small backyard cottages, accessory dwelling units and secondary suites. The current practice among Lower Mainland local governments is that these units can only be rented out. The ability to stratify or outright sell the units would make these investments more attractive to the property owners to create more homes in their neighbourhoods.
Did you know?
First-time home buyers who buy a resale home priced up to $500,000 or a new home priced up to $750,000 may qualify for a PTT exemption under the provincial First-time home buyers’ program (FTHB). But very few first-time buyers qualify, according to members.
- In 2021, only 164 resale townhouses priced at less than $500,000 sold on the MLS® in more than 20 communities within the Board’s boundaries.
- In contrast, in 2017, the last time the FTBH price threshold was raised (to $500,000), 765 resale townhomes sold in the Board area for less than $500,000.
- The current benchmark price for a typical condominium unit in our board area is $779,700 so few first-time buyers of condominiums would qualify for the FTHB program.