Majority of British Columbians believe Property Transfer Tax needs adjustment
In a recent Ipsos Reid opinion poll, 58 per cent of respondents agreed that the Property Transfer Tax (PTT) places an unfair tax burden on home buyers relative to other segments of the population. Twenty nine per cent disagreed, and 13 per cent had no opinion on the issue.
The poll also found that 51 per cent of respondents believe the provincial government should adjust the way the PTT is calculated to reflect price changes in the housing market over time. Of the 854 respondents, 26 per cent did not believe the PTT should be adjusted to reflect inflationary trends in the housing market and 23 per cent had no opinion.
Ipsos Reid conducted the poll on behalf of the Real Estate Board of Greater Vancouver (REBGV). Â It was conducted online with 854 adult British Columbians responding between April 19 and 24, 2013.
â€œWhile the PTT is not top of mind in most peopleâ€™s daily lives, when the time comes to purchase a home this tax becomes a significant burden for home buyers in BC to shoulder,â€ says Sandra Wyant, REBGV president.
The province introduced the tax 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 in 1987 sold for $200,000 or more. Today, the reverse holds true, with 96 per cent of homes in Greater Vancouver selling for more than $200,000. However, the taxâ€™s structure hasnâ€™t changed in nearly three decades.
â€œThe PTT is structured to reflect home prices in the 1980s, not the prices home buyers pay today,â€ Wyant says. â€œThe fact that it hasnâ€™t been adjusted in 26 years is simply not fair to home buyers and the candidates in this yearâ€™s election should address this issue,â€ Wyant said.
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.
The PTT generated $780 million for the provincial government in 2012. This money goes into general revenue to fund public services. Itâ€™s 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. Each time that home is sold, the buyer pays PTT.
To learn more about the PTT and its implications on BC home buyers, visitÂ helpreducetheptt.ca.
If you have any real estate questions or if you are thinking of buying or selling your home, please contactÂ James Louie Chung, Metro Vancouver REALTORÂ® â€“ Real Estate AgentÂ atÂ [email protected]