Help reduce the Property Transfer Tax – Vancouver Real Estate
BC voters head to the polls on May 14 and the Property Transfer Tax (PTT) is a top election issue for the Real Estate Board of Greater Vancouver (REBGV).
The REBGV has launched a campaign to raise voter awareness of the need for the next government to reduce the PTT.
“Our goal is to send a strong message to this year’s candidates that it’s long overdue for government to reduce the burden of the PTT on home buyers,” Sandra Wyant, REBGV president said.
The province introduced the PTT 26 years ago. It was structured to add 1 per cent on the first $200,000 of the purchase price, and 2 per cent on the balance. The government of the day touted the PTT as a wealth tax, as just 5 per cent of homes in Greater Vancouver sold for $200,000 or more.
Since 1987, home prices have increased substantially. Yet, after all these years, the tax’s structure hasn’t changed. Today, 96 per cent of homes in Greater Vancouver sell for more than $200,000.
“It’s time to relieve some of the unfair tax burden the PTT places on home buyers and we’d like to know where the candidates and parties stand on this issue,” Wyant said.
The PTT adds $10,000 to a $600,000 home. It annually generates $780 million for the provincial government. This money goes into general revenue to fund public services.
The PTT is paid each time a property changes hands in the development process. When a developer buys raw land, the developer pays the PTT. When a builder buys lots from the developer, the builder pays the PTT. When a home buyer buys a home from the builder, the home buyer pays the PTT. Every time that same home is sold, the next buyer pays the PTT.
The REBGV is asking candidates if they would support increasing the one per cent threshold to $525,000 from $200,000. This would mean that on a $600,000 home, the PTT would be $6,750, instead of $10,000, saving home buyers $3,250.
“We know it would be difficult for any future government to replace the revenue generated from the PTT, but this is a case where the notion of tax fairness needs to apply,” Wyant said. “The next government of BC should adjust the PTT to better reflect the tax’s original purpose,” Wyant said.
If you have any real estate questions or if you are thinking of buying or selling your home, please contact James Louie Chung, Metro Vancouver REALTOR® – Real Estate Agent at [email protected]