They say govts increasingly look to new housing for revenue because the charges are not transparent to consumers, unlike property tax increases.
CRD municipalities appear to be moving in the same direction.
We estimate govt costs are 20% of new home prices, not including regulatory challenges like delays in approvals and inefficient permit processes – which are significant.
According to the Victoria Real Estate Board, the benchmark price for a single family home in May was $681,800.
Twenty per cent of that price is $136,360 and rises to almost double on a mortgage at 6% over 25 years.
Govt should be transparent about the impact of fees on new housing.
Elected officials often claim the developer is paying, but consumers know the cost of manufacturing any product is ultimately paid by the purchaser.
These rising costs include:
- Victoria’s recent double-digit fee increases despite posting a surplus of $500,000 last year;
- Central Saanich’s development cost charges up by more than 100%, plus amenity fees;
- BC govt’s triple Property Transfer Tax on developing a single home when land is transferred;
- BC govt’s new Step Code adds tens of thousands of dollars to construction costs. Step 5 of the new code will boost Victoria prices by at least 14% or more, pushing us past Toronto – or 34% of the home price.
It’s no wonder BC’s house prices are $170,000 above the national average and climbing.
Last year the province promised to make govt costs transparent and municipalities accountable. That action is long overdue.