Ensure the PTT Reflects the Real Estate Market

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When buying a home in British Columbia, the price of the home isn’t the only cost to consider. Property Transfer Tax (PTT) is also charged on all properties, and British Columbia has the highest provincial land transfer tax in Canada.

The PTT was first introduced in 1987, and its current structure is as follows:

1% charged 2% charged 3% charged
On the first $200,000 of fair market value On the portion between $200,000 and $2 million On the remainder over $2 million

This added cost can be a major burden for homebuyers. According to The Canadian Real Estate Association, the average price of a home in British Columbia as of February 2017 was $688,011. For the City of Vancouver, that average price jumps to $995,583. With such prices, PTT costs can add up significantly:

Housing Price PTT Total Added
$688,011 (British Columbia) $2,000 (1% threshold) + $9,760 (2% on remainder) $11,760
$995,583 (Vancouver) $2,000 (1% threshold) + $15,912 (2% on remainder) $17,912

In 2016 and 2017, the BC government implemented several changes to the PTT. These included the addition of the third tier over $2 million, a 15% tax on foreign buyers in Metro Vancouver and various exemptions from the PTT for specific circumstances.

Unfortunately, none of the policy around the PTT has ever truly reflected the dynamic nature of the real estate market. Unless the thresholds are indexed and automatically change as the economy changes, this tax will always be out of sync and unfairly burden British Columbians.

The BC Real Estate Association (BCREA) supports policies that help ensure British Columbians can achieve the dream of home ownership, as reflected in BCREA’s Quality of Life approach. As such, we recommend several changes to the PTT to make home ownership more accessible.

Recommendations for the BC government:
  • For any future changes to the PTT, ensure that real estate transactions already underway are exempt.
  • Use the new Housing Priority Initiatives Fund to increase the 2% PTT threshold to $525,000 from $200,000. This would help consumers all around the province, whether they purchase residential or commercial real estate, or new or existing homes.
  • Increase the First-Time Home Buyers’ Program PTT exemption threshold to $750,000 from $500,000. This would benefit a greater number of first-time buyers, and would also align with the exemption threshold for newly-built homes.
  • Index the following PTT thresholds using the Consumer Price Index, and make adjustments annually:
    • 2% and 3% thresholds,
    • First-Time Home Buyers’ Program exemption threshold, and
    • Newly Built Home Exemption threshold.