Property transfer tax and other housing taxes are under scrutiny
With the British Columbia provincial election just around the corner, the BC Real Estate Association (BCREA) is urging the next government to prioritize a comprehensive review of housing taxes, which it believes are negatively impacting affordability in the province.
The call comes as part of BCREA’s push to reform taxation policies and make homeownership more attainable for residents.
Property transfer tax
One of the key areas BCREA wants to see reformed is the property transfer tax (PTT). Initially introduced in 1987 as a tax on luxury home sales, the PTT has expanded far beyond its original purpose.
Today, it applies to nearly all real estate transactions in the Lower Mainland and around 70% of sales in more affordable areas across the province. This has led to a growing burden on homebuyers, particularly as housing prices have skyrocketed in recent years.
“The property transfer tax was originally supposed to be a ‘luxury tax,’ but it’s evolved into a heavy burden for all British Columbians,” said Trevor Koot, CEO of BCREA. “The PTT has far outlived its original purpose without ever facing a systematic review, and the time has come for that to change.”
Koot emphasized that the PTT now generates $1.95 billion annually for the province, but its broad application means that many everyday buyers are paying taxes that were once intended for high-end sales. He believes it’s time to take a closer look at how this tax impacts affordability and whether it still serves its intended purpose.
Foreign buyer tax
BCREA also advocated for a review of the Foreign Buyer Tax, which was introduced to curb foreign investment and cool the housing market. While the policy aimed to make housing more affordable by limiting competition from non-residents, BCREA argued that it may need to be reassessed to ensure BC continues to attract the foreign investment needed to meet housing development goals.
Read next: Foreign homebuyer ban fails to curb prices or boost inventory, Royal LePage finds
Additionally, the association has called for the repeal of the speculation and vacancy tax (SVT) and the upcoming residential property short-term holding profit tax (flipping tax), both of which BCREA sees as unnecessary given similar federal taxes already in place.
Koot acknowledged that taxes are a critical source of revenue for public services but stressed that they should not make it harder for British Columbians to buy homes.
“While taxes are a necessary tool for funding public services,” he said in a media release. “They shouldn’t be a barrier to homeownership or add unnecessary complexity to real estate transactions. The way forward is a long, hard look at the current policies, which must be undertaken by BC’s next government to ensure fairness for British Columbians.”
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