In an effort to address the pressing issues of housing affordability and availability, the Real Estate Board of Greater Vancouver (REBGV) has put forward a set of recommendations to a provincial legislative committee.
The proposals primarily focus on revising the provincial taxation regime to alleviate the financial burdens faced by prospective homebuyers and to foster greater mobility within the housing market.
REBGV says the intent behind the recommendations is to expand rental and purchase options for British Columbians.
“The housing affordability challenges we face in this region disproportionately impact younger generations,” says Jeff King, REBGV CEO. “Taxation is a big part of the housing affordability equation. To make progress, we need our governments to take a more holistic view of how housing is taxed to ensure that we are not impeding efforts to increase housing supply and improve affordability.”
REBGV proposes overhaul of property transfer tax
REBGV has advocated for a comprehensive review of the Property Transfer Tax (PTT), which has remained unchanged since its implementation in 1987.
The key recommendations put forth by the board include removing the PTT for homes priced below $750,000 (both new and resale), raising the First-Time Home Buyers’ Program PTT exemption threshold on resale homes to $750,000 from $525,000, exempting presales from the PTT, and indexing PTT thresholds using the consumer price index.
The revenue generated from homes priced above $750,000 would be redirected to provide financial incentives to renters purchasing missing middle homes in walkable, mixed-use, transit-oriented communities.
Suggestions for flipping tax and rental supply measures
To ensure a fair and balanced approach, REBGV has emphasized the need for exemptions within the regulations governing the flipping tax. This measure aims to prevent undue penalties for individuals who are most likely to move. The board also proposes exempting new construction from the flipping tax and ensuring that the tax does not discourage investment in secondary suites, as outlined in the province’s new secondary suite policy.
Rental supply
Recognizing the importance of rental supply in addressing housing affordability, REBGV has made suggestions to the federal and provincial governments:
- They urge the federal government to exempt new not-for-profit rental developments from paying Goods and Services Tax (GST).
- The board proposes creating a provincial rebate program for GST payable on new rental construction. The funding for this rebate program could be sourced from interest payments made to the province from programs such as HousingHub, which includes the Affordable Home Ownership program (AHOP) and the PTT.
- REBGV suggests implementing a program of ultra-low-cost loans for developers building rental buildings. These loans would be financed using funds from existing revenue streams, including the PTT and BC Housing revenue streams, without imposing affordability standards that render the projects financially nonviable.
