Government could lose hundreds of millions in property transfer taxes

Dated: February 21 2019

Views: 28

Government could lose hundreds of millions in property transfer taxes

tax
67
67
    Spencer Harwood

    Spencer HarwoodAssociate Producer, CTV Vancouver

    @SpenceHarwood


    Published Tuesday, February 19, 2019 5:57PM PST 

    A year after the NDP introduced a new tax package on homes in B.C., the property transfer tax is expected to net $330 million less than expected.

    The property transfer tax, or PTT, was projected to bring in around $2.2 billion to the government’s coffers this year. That number has now been slashed to $1.9 billion, and is expected to stay flat for the next three years.

    The property transfer tax is charged every time a home is sold in British Columbia – when sales and prices were soaring several years ago, the property transfer tax was a huge part of balancing the budget.

    Last year, the provincial government increased the foreign buyers tax and the introduced a speculation and controversial property tax on homes over $3 million.

    “Money laundering and speculation in the real estate market was allowed to take root in our province,” said Finance Minister Carole James in her address to the legislature Tuesday “and we’re finally starting to see some moderation.” 

    Since then, housing prices have dropped in B.C. by nearly 10 per cent; however, lower sale numbers mean less homes being built.

    “We’re reducing the number of homes that are going to be built by 25 to 30 per cent, at a time when we need to be building more homes,” said Ann McMullin from the Urban Development Institute.

    Ministry officials are predicting an upturn in the market to the tune of three per cent, with moderate price increases.

    But B.C. Liberal leader Andrew Wilkinson says the drop in housing starts ­- the number of houses currently being built - hurts the construction business and the province as a whole.

    “This is a government who seems to think they can continue to increase spending, while also projecting a 25 per cent drop in housing starts,” said Wilkinson.

    “That’s not going to lead to an awful lot of employment in the construction business, and it’s certainly not going to help affordability.”

    Cameron Muir of the B.C. Real Estate Association agrees with Wilkinson and McMullin.

    “There’s not enough homes being built, and we’re going to be into another cycle of rapidly rising prices where affordability gets out of reach,” he told CTV News.

    A cycle which could create more instability in a housing market already unaffordable for many.

    Blog author image

    Steven Axford

    Steve is a award winning Realtor in Victoria BC, with his listings selling faster and for top dollar! Growing up in Victoria, BC and has always been active in his community. Steve is a Victoria Couga....

    Latest Blog Posts

    ´╗┐The 2021 Victoria real estate market year in review

    The 2021 Victoria real estate market year in reviewA total of 438 properties sold in the Victoria Real Estate Board region this December, 30.6 per cent fewer than the 631 properties sold in December

    Read More

    No change on the horizon for the Victoria real estate market

    December 1, 2021  A total of 653 properties sold in the Victoria Real Estate Board region this November, 17.9 per cent fewer than the 795 properties sold in November 2020 and 12.3 per cent

    Read More

    A greater commitment to development required to balance local housing market

    October 1, 2021  A total of 761 properties sold in the Victoria Real Estate Board region this September, 23.1 per cent fewer than the 989 properties sold in September 2020 and 8.4 per cent

    Read More

    CMHC says annual pace of housing starts in Canada slowed in July

    OTTAWA — Canada Mortgage and Housing Corp. says the annual pace of housing starts in July fell compared with June.The national housing agency says the annual pace of starts fell to 272

    Read More