Finance Minister Mike de Jong speaking Wednesday as part of a panel on the economy and jobs at the Union of B.C. Municipalities convention in Vancouver.

Finance Minister Mike de Jong speaking Wednesday as part of a panel on the economy and jobs at the Union of B.C. Municipalities convention in Vancouver.

Rental incentives eyed by province as housing cost relief tool

Finance minister weighs how to dispense affordability aid that might flow from a higher tax on sales of luxury homes

Some of the money raised through a potentially higher property transfer tax on luxury homes could be funneled into incentives to build more rental housing, Finance Minister Mike De Jong says.

De Jong said earlier this month he’s considering a third increment of the property transfer tax to collect more when high-end homes change hands, and use the proceeds to help combat unaffordably high housing costs.

But he has been cautious about how to go about dispensing relief, noting that aid to entry-level home buyers could backfire and simply push prices even higher.

“If all you do is create more demand and supply remains constant you’ll have the opposite effect of what you want – you’ll drive the cost up,” de Jong said Wednesday in an interview with Black Press.

He said rental construction incentives could be one piece of the puzzle.

“Is there a way to also encourage the construction of more and new rental housing – that’s very much a part of this conversation,” de Jong said.

He made the comments after a panel discussion at the Union of B.C. Municipalities convention, where he asked mayors and councillors whether relief should be focused on first-time home buyers, and whether it should go towards the purchase of any housing, or be targeted to increase the supply of new housing.

He said most community leaders seem to support the idea of reforming the property transfer tax in a way that helps young families get into the housing market.

De Jong reminded municipal politicians that they control zoning and therefore have the power to increase density and the number of homes available, applying downward pressure on prices.

The property transfer tax charges one per cent on the first $200,000 of the price and two per cent after that. When a $600,000 home sells, $10,000 flows to the government.

De Jong noted the $200,000 threshold where the tax rises to two per cent hasn’t been changed in 30 years. Increasing that would reduce the bite of the tax at the lower end of the market.

Another potential lever is the exemption for first-time home buyers – they don’t pay the tax on the first $475,000.

Greater Vancouver Home Builders Association CEO Bob de Wit said he’s concerned the government’s idea of a luxury increment on the transfer tax could disrupt the housing market.

“It really depends on the changes they make at the higher end and how they define higher end,” said de Wit, who urged the province to proceed very carefully.

“To a lot of one- and two-income families, a $1 million or $2 million home is not super luxurious. It depends where they charge the premium.”

Home builders and realtors would prefer to see the province dismantle the property transfer tax altogether.

And although Premier Christy Clark earlier this year floated the idea of phasing it out over time, de Wit doubts that will happen, because the tax has grown to become a billion-dollar-a-year cash cow for the province.

Just Posted

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: Chilliwack family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

A new sign was installed at St. Thomas Anglican Church on Saturday, June 5, 2021 in Chilliwack. (Jenna Hauck/ Chilliwack Progress)
Community effort to install new sign at Chilliwack’s oldest church

‘We feel it’s a step in the right direction to bring the church up-to-date,’ says St. Thomas parishioner

Dennis Saulnier rescued his daughters, two-year-old Brinley (left) and four-year-old Keegan, after their truck was driven off the road and into Cultus Lake on May 16, 2020. Reporter Jenna Hauck has been recognized by the B.C. and Yukon Community Newspapers Association for her story on the rescue. (Jenna Hauck/ The Progress)
Chilliwack Progress, Hope Standard staff take home 7 Ma Murray awards

Jenna Hauck, Eric Welsh, Jessica Peters, Emelie Peacock all earn journalism industry recognition

A student prepares to throw a plate full of whipped cream at principal Jim Egdcombe’s face as vice principal Devin Atkins watches as part of a fundraiser at Leary Integrated Arts and Technology elementary on Friday, June 11, 2021. (Jenna Hauck/ Chilliwack Progress)
The pied principals: Chilliwack elementary staff get messy for charity

Cops for Cancer fundraiser saw kids ‘pie the principal’ at Leary elementary in Chilliwack

Image by Free-Photos from Pixabay
Webinar looks at sexual abuse prevention among adolescents

Vancouver/Fraser Valley CoSA hosts free online session on June 15

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from B.C. residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement June 1. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

The Queen Victoria statue at the B.C. legislature was splattered with what looks like red paint on Friday. (Nicole Crescenzi/News Staff)
Queen Victoria statue at B.C. legislature vandalized Friday

Statue splattered with red paint by old growth forest proponents

Most Read