The British Columbia government announced a raft of measures Tuesday that aim to tackle the issue of housing affordability in the province. A tax break for buyers of newly built homes was brought in with immediate effect; it means that Canadian residents who buy a new home for up to $750,000 will save up to $13,000 on transfer tax but they must live in the property for at least one year. The break will be offset by an increase in the tax for homes over $2 million, from 2 per cent to 3 per cent.
The BC Real Estate Association welcomed the measures saying “The PTT exemption for new homes up to $750,000 will help stimulate supply of new housing and provide more opportunities for home ownership across the province. This exemption is commendable, however with many new housing projects taking years to complete, it may not have the immediate impact desired by the government.”
The association says it will continue to call for the province to raise the thresholds on PTT with the 1 per cent rate not applying before $525,000 and annual increases linked to the MLS Home Price Index.
Other experts were not impressed by the government’s action: “Reducing or giving exemption of property transfer tax doesn’t help home buyers,” SFU professor Andrey Pavlov told Global News. “People frame it that way but that’s not how it works. All it’s going to do is raise prices.”
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