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Budget Surplus an Opportunity for Fair Taxation

BC’s budget surplus is an opportunity to correct the Property Transfer Tax (PTT) which unfairly taxes a new home as many as three times during its development.

A developer pays PTT when buying land to develop.

A builder pays the PTT again when buying a lot from the developer.

When the home is built and sold, consumers pay the PTT for a third time on the lot, plus the new house.

Similar to most manufactured products, the previous PTT costs are embedded in the final house price.

It’s no wonder BC has the highest average house price in Canada, by well over $100,000.

Property Transfer Tax, GST, municipal density fees, amenities, and regulatory costs are absorbed into the mortgages of young families least able to afford it.

A recent study shows homebuyers ages 35 to 44 have acquired more debt compared with the same group from previous decades, despite lower interest rates.

Affordability is incompatible with three levels of government using new homes as a source of revenue, particularly when a tax is charged multiple times.

Tax fairness dictates the province should remove the PTT on the initial stages of housing development, especially in light of budget surpluses.

The benefits of a fair tax system include more housing affordability, home sales and employment generating stronger tax revenue.

It all starts with fair taxation – a key component for a healthy economy in British Columbia.

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View this column in Wednesday’s Times Colonist.  

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