B.C. realtors are prodding provincial election candidates to agree to ease the bite of the Property Transfer Tax for home buyers.
The Property Transfer Tax (PTT) consists of one per cent charged on the first $200,000 in property value and two per cent after that.
The Real Estate Board of Greater Vancouver (REBGV) wants the next provincial government to raise the threshold where the two per cent tax level starts to apply to $525,000.
That would mean a $600,000 home currently charged $10,000 in PTT each time it changes hands would instead be charged $6,750, saving buyers $3,250.
“While the PTT is not top of mind in most people’s daily lives, when the time comes to purchase a home this tax becomes a significant burden for home buyers in B.C.
to shoulder,” REBGV president Sandra Wyant said.
She said the PTT was introduced as a wealth tax 26 years ago – when just five per cent of Metro Vancouver homes sold for more than $200,000 – but its threshold has remained unchanged and rising home values have made many more homes subject to the two per cent portion.
It’s an admirable idea, says Canadian Taxpayers Federation B.C. director Jordan Bateman.
But he’s not holding his breath for any political party to change the PTT, which raises $700 million to $1 billion a year for the province, depending on the volume of real estate sales.
“Political parties will talk about the PTT, complain about it, until of course it’s election time and then they go absolutely stealthily silent on it,” Bateman said.
Victoria has rejected previous suggestions from TransLink that part of the PTT raised from Metro Vancouver support transit upgrades here.
Bateman said the tax drives up the already high cost of housing in the region.
“It’s a perfect example of a tax that’s grown out of control,” he said. “The Property Transfer Tax is such easy money the government never tinkered with it and became reliant on it.”
The REGBV released an Ipsos Reid poll it commissioned showing 58 per cent of B.C. residents think the PTT puts an unfair tax burden on home buyers compared to other groups.
The PTT has also been controversial recently because businesses and wealthy individuals are increasingly avoiding paying the tax by holding real estate within a bare trust corporation and selling that shell company to the new buyer.
Photo: Jordan Bateman, CTF