Happy Birthday to the Property Transfer Tax
This week the dreaded BC property transfer tax turns a quarter century old. For those who do not know, the Property Transfer Tax (PPT for short) was a tax brought in by Bill Vander Zalm back in 1987, the same Bill Vander Zalm who looks like a BC hero, who recently helped overturn the HST back to the traditional PST and GST models in BC.
The tax is 1% of the 1st $100,000 spent on a home, and 2% on the remaining balance, a considerable amount for most BC homes. In 1987, the average price of a Vancouver home was a mere $187,000. Today the average in Greater Vancouver is about $1,034,000, what a difference a quarter century can make. The tax was originally intended to tax speculation and wealth in our province, so high earners and those purchasing expensive homes paid a transfer tax on those purchases. The threshold was $200,000 in 1987 and approx. 95% of the homes in metro Vancouver were under that mark. Unfortunately for home buyers, times have changed.
Since 1987, BC home buyers have paid nearly 12 BILLION dollars in PTT since its inception, or about 900 MILLION dollars a year goes into the province. On the purchase of a $500,000 home in a suburb of Vancouver, a family would be looking at about $9,000 in PTT on top of all their other fees. This outdated threshold is something the BC Liberals are looking at and have suggested they would review the thresholds in the near future. The problem is, if you remove 900 million dollars a year from the system, what happens?
It is definitely time for a change to make it more affordable for families in BC to purchase a home. Be sure to speak your voice when the opportunity to be heard is there, and let’s see if we can adjust or extinguish this tax to make property ownership more affordable and attainable for more BC residents.
Contact Jordan Bateman of the BC taxpayers Association and speak your mind, I know he would want to hear it.
Until next time,