Premier John Horgan spoke to Vancouver’s development community last week and said, “If we allow housing to be a commodity market, there will be problems with selling your product.”
But that’s how the BC govt taxes housing – as a commodity.
The province received more than $2 billion from the Property Transfer Tax (PTT) last year – more than the combined revenue from mining, energy, forestry, Crown land tenures and natural gas.
In addition, the Property Transfer Tax may be charged up to 3 times during the development of a single new home.
A developer pays PTT when buying land to develop.
A builder pays PTT again when buying a lot from the developer.
When the home is built and sold, consumers pay the PTT a third time on the lot plus the new house.
The previous PTT costs are embedded in the final home price.
The PTT is an unfair tax because it is charged multiple times on the same property and these charges are not transparent.
Add the PTT to the GST, as well as rising municipal fees and amenities, and it’s no wonder BC has the highest home prices by more than $200,000 over the Canadian average.
Premier Horgan proclaims the importance of housing affordability, yet in practice, there appears to be little difference from past govts.
The province is hooked on tax revenue from housing which undermines talk of affordability.
The solution is clear – put the political speeches into practice and announce a single PTT charge on the development of a home.