Synopsis of Budget 2024 and its Impact on Housing

Today, the Honourable Katrine Conroy, Minister of Finance presented Budget and Fiscal Plan 2024/25 – 2026/27 which keeps housing in focus with tax-centric measures to address affordability pressures for residents and businesses, while falling short on supports for low carbon housing.

In CHBA BC’s engagement with the B.C. Government, the association had consistently raised the prohibitive structure of current taxes imposed on provincial businesses and residents, calling for meaningful reforms that would reflect current market housing prices and support housing activity. These calls have been responded to in Budget 2024 with the following announcements:

• Expanded Property Transfer Tax (PTT) exemptions introduced for First-Time Home Buyers and Newly Built Homes, increasing the thresholds to reflect today’s housing costs.
• Increased exemptions from the Employer Health Tax (EHT) to $1 million from $500,000 starting in the 2024 calendar year. Businesses with payrolls between $1 million and $1.5 million will continue to be partially exempt and will see a decrease in tax obligations.
• Enhanced PTT exemptions for qualifying Purpose-Built Rental (PBR) buildings effective for transactions that occur between January 1, 2025 and December 31, 2030. PBRs are those that have at least four apartments, non-stratified and held as rentals, on a monthly basis or longer, for at least 10 years. The residential portion of the building must be entirely used for rental purposes.

“This budget includes some relief for qualifying first-time homebuyers, with an increase in the exemption to the property transfer tax up to $835,000 and for new homes worth up to $1.15 million, up from $750,00 enabling access to new housing in more regions,” says Neil Moody, CEO for CHBA BC. “We have advocated for an increase in the thresholds for several years, so it is good to see these incremental changes that will have an immediate effect.”

While these taxation measures reflect CHBA BC’s advocacy on these topics, further support from the Province is necessary to address the significant growth-related infrastructure costs that challenge the affordability of new residential units. Not seen in Budget 2024/25 are additional investments towards growth-related infrastructure for housing that would help curb the increasing cost pressures stemming from Development Cost Charges (DCCs).

In addition to the PTT changes, effective January 1, 2025, a new BC Home Flipping Tax will be imposed on the profit made from selling a residential property within two years of purchase. Specific exemptions are in place for qualifying life circumstances as well as for those who add to the housing supply or engage in construction and real estate development – a crucial recommendation made by CHBA BC during consultation to ensure homebuilding efforts are not undermined. The Flipping Tax does apply to income from the assignment of contracts to purchase these properties and is set at 20% for properties sold within 365 days of purchase and will decline to zero between 366 and 730 days.

Regarding CleanBC, the BC Budget has once again disappointed CHBA BC in providing little to no support to deliver low-carbon homes, especially for rural and northern communities where top-ups to reduce capital cost barriers to heat pump adoption were needed. The BC Budget has limited $40 million for additional heat pump rebates to income-qualified households, leaving many households to bear capital-intensive costs of low-carbon housing.

CHBA BC welcomes executive officers and members to share any comments or questions with us regarding this year’s BC Budget.