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Greater Victoria, BC News

ARTICLE

Date ArticleType
11/13/2015 Published Article
Moving Tax

Thinking of moving? Upsizing, downsizing, changing location – whatever the reason, many of us consider it from time to time. Sometimes the decision to stay is based simply on the cost of the new home. Sometimes it is the cost of the move itself, e.g., reconnection charges, hiring a mover, paying lawyers and realtors, doling out assessments and mortgage transfer fees. For some, paying for moving-related services are palatable, “the cost of doing business,” but add in the B.C. Property Transfer Tax, and the total expenses outweighs the benefit of moving.

The amount of Property Transfer Tax we pay in B.C. is based on the fair market value of the land and improvements, e.g., buildings, on the date of registration. The tax is charged at a rate of one percent for the first $200,000 and two percent for the portion of the fair market value that is greater than $200,000. For example, if you purchased a single family home in Saanich October 2015, then – using Victoria Real Estate Board benchmark of $561,400 – you would have paid $9,228 in Property Transfer Taxes to the B.C. Government.

Our Property Transfer Tax was originally intended to affect only five percent of luxury home buyers (based on the 1987 average home price in Vancouver of just under $150,000) but now it affects virtually everyone who purchases a home in B.C.

Critics of the tax argue that increasing real estate values have distorted the original purpose of the Property Transfer Tax Act. However, making adjustments to the land transfer tax system and maintaining critically important tax dollars, at the same time, has presented a long-standing conundrum for legislators.

There is work underway. For example, the BC Chamber of Commerce is lobbying the Province to provide a grant for primary residence and to increase the threshold for first-time home buyers. The Select Standing Committee on Finance and Government Services has recommended the B.C. Government review the Property Transfer Tax to look for opportunities in the 2016 Budget to assist first-time homebuyers.

Phasing out the harmful Property Transfer Tax could have significant positive impacts in our economy.

Published in Victoria Business Examiner, Dec 2015 edition.

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