Changes to the property transfer tax for first-time and new construction home buyers

CHBA BC submits to the Select Standing Committee on Finance and Government Services annually and provides an in-person presentation. This is an opportunity to speak to policy objectives that can be addressed in the annual provincial budget, and have some sort of financial component to them. Each year, CHBA BC includes suggestions that can help first-time home buyers and alleviate some of the extra costs imposed through the property transfer tax.

We have had some successes in past budgets related to this goal.

Newly-built units are fully exempt from the property transfer tax

Effective February 17, 2016, the purchase of a qualifying new housing unit valued at up to $750,000 is fully exempt from the provincial property transfer tax. This exemption saves the purchaser up to $13,000! It was reported in the 2017 Throne Speech that 9,100 British Columbians used the newly-built home exemption in the first year, saving almost $72 million dollars. This number continues to climb.

First-time home buyer thresholds rise to match prices

CHBA BC has argued in its budget submissions that existing threshold for the first-time home buyers exemption must keep up with rising prices in order to be most effective.

Effective for registrations made on or after Feb. 22, 2017, the threshold for the first-time homebuyers’ program for the property transfer tax (PTT) increased to $500,000 from $475,000. The previous increase was in 2014 when it was increased to $475,000 from $425,000. The partial exemption threshold has also increased to $525,000. This will now save first-time home buyers up to $8,000, which is an increase of $500.

It was reported in the budget that between Jan. 1, 2016 and Jan. 31, 2017, almost 22,000 first-time home buyers saved an average of $4,011 on the PTT with the first-time home buyers program. This is a total estimated savings of $87 million.

While there have been recent successes, CHBA BC will continue to seek further relief through the property transfer tax in future budgets for home buyers as these are direct benefits towards their housing affordability calculations.