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Adjust GST & PTT to Promote Affordability

The GST and Property Transfer Tax have contributed significantly to the erosion of housing affordability in our region.

In 2000, the GST for an average new home in Victoria was about $10,000. The PTT was $3,000.

Due to inflation, today the GST is about $30,000 and PTT is $10,000 – triple increases.

Most incomes have not tripled since 2000, so it’s no wonder younger generations are challenged by the cost of housing.

About 20% of a new home’s cost is government taxes, fees and amenity charges.

It’s time all levels of government adjusted these taxes and charges in the interest of assisting affordability.

Ottawa should keep its promise to index the GST rebate to inflation. Less than 10% of homebuyers in our region now qualify for the full rebate, introduced in 1991.

BC should adjust the tax threshold for all purchasers and remove multiple PTT charges during development phases of new homes, ultimately paid by homebuyers.

A developer buys land from a landowner and pays PTT. The developer sells a lot to a home builder and PTT is paid again. The builder builds and sells a new home and PTT is paid a third time.

New homebuyers pay unfair embedded property transfer taxes, PTT on PTT, demanded by the provincial government.

Fair taxation requires transparency and therefore the PTT should be paid only once on a new home.

Also, municipalities must support efficient development processes and avoid using new homebuyers’ mortgages to pay for public benefits, more appropriately paid by property taxes.

These changes will improve affordability, create skilled employment and grow the tax base.

It all starts with fair taxation – essential for a healthy economy and housing affordability.

Visit us at vrba.ca and careawards.ca. Follow us on Facebook and Twitter.

Read our column Wednesdays in the Times Colonist.

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