The British Columbia government announced its 2018 budget Tuesday but real estate bodies are not impressed with some of its measures.
While the budget sets out schemes to make certain aspects of life in the province more affordable; childcare, public transportation and healthcare are all given some help; the housing policies fall short according to industry experts.
“The Property Transfer Tax (PTT) increase to 5% for properties over $3 million, as well as the increase to 20% and expansion of the Foreign Buyer’s Tax to other parts of the province will have an immediate impact on transactions underway,” commented the British Columbia Real Estate Association.
The association is calling on the government to introduce transitional rules for all transactions impacted by the Budget 2018. It highlights that the Foreign Buyer’s Tax introduced in 2016 resulted in deals collapsing.
BCREA is also concerned that the new ‘speculation tax’ will impact local residents who own or want to invest in those markets by buying a second home or recreational property.
While welcoming the pledge to increase the supply of affordable housing, BCREA says that the tax measures are unlikely to achieve the government’s aim to “stabilize the market” and fail to address the issue of matching the supply to demand within a reasonable timeframe.
The Victoria Residential Builders’ Association has also hit out at the Budget.
It says there is “Very little here for market housing affordability. Increased taxes & housing is used as source of revenue for government programs.”
The association criticizes the failure of the government to introduce a reno tax credit to address asbestos, seismic concerns and energy efficiency.
And it says that the government continues to “use foreign buyers (4% of market in Victoria) as scapegoats for high housing prices, not the real causes – demand by a new large generation of young families, low interest rates and obstructive municipal land policies caused by a lack of regional planning & responsible governance.”