How can BC attract people to stay? Review Property Transfer Tax: ReMax

With costly British Columbia experiencing a net loss of residents due to interprovincial migration, Re/Max argues it warrants a re-examination of the policies that contribute to the costs.

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Last year, a notable minority of New Westminster real estate agent Tim Hill’s clients were among British Columbians who left high-priced markets for less expensive Alberta.

“In years past, when they made that transition, more people went to Vancouver Island or the Okanagan,” said Hill, a real estate agent with Re/Max All Points. “(But) those prices have also increased substantially.”

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More than 5,000 British Columbians left the province for Alberta in the third quarter of 2023, according to Statistics Canada, making it the fifth consecutive quarter in which more people left for other provinces than moved to Columbia. British, with Alberta being the net beneficiary.

Hill said his clients who moved were typically young families looking to reduce their cost of living, and one family leaving Maple Ridge stated, “If we go there, we don’t have to feel like we’re in the rat race so much. “

And more generally, Re/Max looked at the trend of suggesting governments re-examine elements of their housing policies, such as property transfer taxes, to ease the burden on buyers where they can.

“The first order of business should be to review the refund/exemption for first-time buyers in Toronto and Vancouver,” Re/Max Canada president Christopher Alexander said in a news release.

Land transfer taxes are a bigger problem in Toronto, where buyers face city and provincial taxes that add $40,000 in closing costs to a median-priced home, according to Re/Max.

In British Columbia, first-time buyers are exempt from property purchases up to $525,000, which isn’t much help in much of the province, particularly in Metro Vancouver, where average benchmark prices top $1 million, Alexander said .

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BC’s property transfer tax is set at one per cent of the first $200,000 of a home’s value, then two per cent of its value up to $2 million and five per cent beyond that. of the 3 million dollars. On that basis, BC’s property transfer tax would add $21,370 over Metro’s average benchmark home price of $1.16 million.

“I think the most realistic (adjustment) would be to match it with the transfer tax exemption for new construction properties,” Hill said. That threshold is $750,000 for anyone, not just first-time buyers, purchasing a newly built home.

Hill said Metro’s high prices and lack of inventory to provide options for potential buyers to make a move are the biggest barriers to making purchases for his customers.

“I don’t remember any client telling me that the property transfer tax was the reason they weren’t going to sell or buy,” Hill said.

Still, Hill said raising the threshold for the property transfer tax exemption would reduce a first-time buyer’s closing costs and potentially free up cash that could contribute to a down payment.

Finance Minister Katrine Conroy was not available for an interview Tuesday, but in an emailed statement she said the province “will continue to work to lead the way in finding real, lasting solutions and will support those who need it most.” need” in British Columbia. housing crisis.

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Conroy did not respond to Postmedia News’ questions about the property transfer tax, but pointed to government policies to reduce speculation in the market and increase the supply of housing.

In addition to Conroy’s statement, his staff, in an unattributed background note, said the government “conducts a rigorous review of all taxes, tax credits and rebates” each year and “any changes to these measures will be announced later.” as part of the annual budget. this month.”

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