GREATER VICTORIA – Thinking of moving? Upsizing, downsizing, changing location – whatever the reason, many of us consider it from time to time. Sometimes the decision to stay is based simply on the cost of the new home. Sometimes it is the cost of the move itself, e.g., reconnection charges, hiring a mover, paying lawyers and realtors, doling out assessments and mortgage transfer fees. For some, paying for moving-related services are palatable, “the cost of doing business,” but add in the BC Property Transfer Tax, and the total expenses outweighs the benefit of moving.
The amount of Property Transfer Tax we pay in BC is based on the fair market value of the land and improvements, e.g., buildings, on the date of registration. The tax is charged at a rate of one percent for the first $200,000 and two percent for the portion of the fair market value that is greater than $200,000. For example, if you purchased a single family home in Saanich October 2015, then – using Victoria Real Estate Board benchmark of $561,400 – you would have paid $9,228 in Property Transfer Taxes to the BC Government.
Our Property Transfer Tax was originally intended to affect only five percent of luxury home buyers (based on the 1987 average home price in Vancouver of just under $150,000) but now it affects virtually everyone who purchases a home in BC.
Critics of the tax argue that increasing real estate values have distorted the original purpose of the Property Transfer Tax Act. However, making adjustments to the land transfer tax system and maintaining critically important tax dollars, at the same time, has presented a long-standing conundrum for legislators.
There is work underway. For example, the BC Chamber of Commerce is lobbying the Province to provide a grant for primary residence and to increase the threshold for first-time home buyers. The Select Standing Committee on Finance and Government Services has recommended the BC Government review the Property Transfer Tax to look for opportunities in the 2016 Budget to assist first-time homebuyers.
Phasing out the harmful Property Transfer Tax could have significant positive impacts in our economy.
Bruce Carter is CEO of Greater Victoria Chamber of Commerce and can reached at 250-383-7191, bcarter@victoriachamber.ca or by visiting www.victoriachamber.ca.
- Upcomming Events
- Tuesday, December 8 | Chair’s Holiday Reception | 5 pm to 7 pm | Craigdarroch Castle
- Thursday, January 14 | Prodigy Group Mingle | 5 pm to 7 pm | To be confirmed
- Thursday, January 21 | Business Mixer | 5 pm to 7 pm | University of Victoria
- Tuesday, January 26 | Merchant Services De-Mystified | Noon to 1 pm | Greater Victoria Chamber of Commerce
