Putting Property Transfer Tax Revenue to Work
In 2016/17 the Property Transfer Tax (PTT) brought in $2.026 billion in revenue. In 2017/18 it is forecast to bring in $1.875 billion.
Meanwhile, potential home buyers unable to pay $661,800, the benchmark price of a typical townhome in Greater Vancouver, continue to move to communities such as Maple Ridge, which has the lowest priced townhomes in the region.
If a buyer is fortunate enough to buy a modest townhome in Maple Ridge with a benchmark price of $391,000, they’ll pay an additional $5,820 in PTT if they’re not first-time buyers. Finding such a townhome isn't easy given the current lack of supply.
Metro Vancouver’s population is forecast to grow by 35,000 new residents each year, reaching 3.4 million by 2040. Supply problems will continue to escalate because of increasing population. The provincial government has the opportunity to show leadership and help improve Metro Vancouver’s affordability crisis.
- Use PTT revenue to provide financial incentivesto municipalities to expedite rezoning land forinnovative, compact, walkable, mixed-use, transit-oriented communities with smaller housing choicesincluding cottages, townhomes and low-riseapartments, including both ownership and rental.
- Use PTT revenue to provide financial incentives tomunicipalities that approve gentle density, includingthe stratification of laneway, infill homes andsecondary suites.
- Increase the First-Time Home Buyers’ Program PTTexemption threshold to $750,000 from $500,000 tomatch the newly-built homes exemption and the BCHOME Partnership Program and to better reflect therealities of housing markets across the province.
- Increase the two per cent PTT threshold to $525,000 from$200,000 for all BC home buyers.
- Index PTT thresholds using the consumer priceindex, and make adjustments annually for the:
- two and three per cent thresholds;
- First-Time Home Buyers’ Programexemption threshold; and
- Newly Built Home Exemption threshold.
- Expand the exemption for the 15 per cent foreign buyers’PTT available to newcomers in the Provincial NomineeProgram to include all those with work permits, livingand paying taxes in Metro Vancouver regardless of theprogram under which they got their work permit.
Why are home sales important?
Real estate and construction are, by far, the province’s leading economic drivers, collectively producing 27 per cent of the province’s GDP.
When spin-offs are taken into account, between 35 and 40 per cent of all economic growth in BC over the last two years is traceable to the direct and indirect impacts of the lively housing sector.
It’s essential to keep these sectors robust because of the jobs and spin-offs they generate for every BC neighbourhood.
In Greater Vancouver in 2016, 39,943 homes changed ownership in REBGV’s area, generating $2.5 billion in economic spin-off activity and an estimated 17,600 jobs in a range of fields. The value of residential sales transacted through the MLS® system in Greater Vancouver totalled $41 billion in 2016.