Laneway House 2, Vancouver

The provincial government introduced its fourth consecutive balanced budget with a projected surplus of $377 million on February 16, 2016.

Key areas to improve housing affordability which take effect February 17, 2016 include:

Property Transfer Tax (PTT)

  • For homes priced at less than $2 million, the PTT will be charged at a rate of 1% on the first $200,000 of property value and the 2% of the remainder.
  • For all (new and resale) homes priced at more than $2 million, the PTT is taxed at a rate of 3% on the value of the home over $2 million.
  • There has been a New Housing exemption that has been created which applies to newly built homes or newly subdivided units priced up to $750,000. This saves buyers up to $13,000. This is expected to benefit owners of 22,000 new homes.
  • There is a partial exemption up on newly built homes priced $750,000 to $800,000.

Example 1 – Resale home price: $750,000 

1% PTT on first $200,000 = $2,000
2% PTT on remainder of $550,000 = $11,000
Total PTT: $13,000

Example 2 – New Home price: $700,000
PTT = $0
No exemptions on homes priced from $800,000+.

Example 3 – New or resale home price: $1,000,000
1% PTT on first $200,000 = $2,000
2% PTT on remainder of $800,000 = $16,000
Total PTT: $18,000

Example 4 – New or resale homes price at $7,700,000

Before February 16, 2016
1% PTT on first $200,000 = $2,000
2% PTT on remainder of $7,500,000 = $150,000
Total PTT: $152,000

After February 16, 2016
1% PTT on first $200,000 = $2,000
2% PTT on $1,800,000 = $36,000
3% PTT on amount between $2,000,000; and $7,700,000 (which is $5,700,000) = $171,000
PTT: $209,000

Home Owner Grant
The Home Owner Grant threshold is increased to $1.2 million from $1.1 million for the 2016 tax year

Affordable housing
A $355 million fund to the BC Housing Management Commission (over five years) to support more than 2,000 new units of affordable housing for residents with low-to-moderate incomes.

Rental housing
Continuing partnerships with municipalities and community groups to create more affordable housing. For example, the Community Partnerships Initiatives Program provides advice and low interest financing to non-profits to help them develop affordable housing, contributing to more than 3,300 new units of affordable housing.

Home Renovation Tax Credit for persons with disabilities
This program will be expanded to include persons with disabilities. This tax credit provides up to $1,000 annually to help with the cost of specified home renovations to improve accessibility, helping seniors and persons with disabilities be more functional or mobile at home.

Data collection
Starting this summer, individuals and corporations buying property must disclose if they are Canadian citizens or permanent residents of Canada and if neither, their home country. These changes will provide information on the volume of foreign investment in BC. (The Real Estate Board of Greater Vancouver supported this initiative in a letter to the Finance Minister).

Keeping communities safe
$55 million in emergency preparedness and prevention initiatives in 2016, such as upgrades to dikes and flood protection.

The province has missed an opportunity to raise the existing threshold levels to provide broader PTT relief for those who can’t afford a newly constructed home and who are not first time home buyers, according to BC Real Estate Association.

By not indexing the threshold levels, the province ensures that in an environment of rising home prices an increasing number of homes will fall within the new three per cent threshold, resulting in a higher tax burden on more home buyers.

Read the Housing Affordability Backgrounder. Read the Budget Speech. (Opens 24-page pdf)

Source: Real Estate Board of Greater Vancouver