The Real Estate Board of Greater Vancouver is urging all BC property owners and buyers to put the provincial property transfer tax on the hot seat during the upcoming provincial election.
The province introduced the PTT 26 years ago. It was structured to add 1% on the first $200,000 of the purchase price, and 2% on the balance. At that time, only 5% of Metro Vancouver houses sold for $200,000 or more.
Today only 4% of homes sell for under$200,000, yet the PPT hasn't changed, the Board notes.
The PTT adds $10,000 to a $600,000 home and it is paid each time a property changes hands. When a developer buys raw land, the developer pays the PTT. When a builder buys lots from the developer, the builder pays the PTT. When a home buyer buys a home from the builder, the buyer pays the PTT. Every time that same home is sold, the next buyer pays the PTT.
"It is a cascading tax that never really ends," said one Board official.
The Board argues it is time the government looked at changing the PPT, perhaps setting a new price ceiling or exempting properties below $400,000, a step toward making homes more affordable.
What do you think? Should the BC Property Transfer Tax be an election issue? Can you imagine a government of any political stripe giving up that kind of revenue? How could it be tweaked to be less of a burden on BC home buyers? Comments welcome.
Business in Vancouver's Paul Harris discusses the Property Transfer Tax on Global BC Morning News
Vancouver Sun: Expensive Housing a Riddle for British Columbia Parties