BC Budget 2017: BC's First-Time Home Buyers Get a (Small) Tax Break

Having been sidelined in last year’s Budget, BC's first-time buyers will save some money on Property Transfer Tax – if buying a home priced between $475,000 and $525,000

The BC government is raising the threshold for the first-time buyer Property Transfer Tax exemption to $500,000 from $475,000, finance minister Mike de Jong announced February 21 in the 2017 Budget Announcement. The partial exemption threshold has also increased to $525,000 from $500,000.

The changes will now affect more first-time home buyers by exempting, or partially exempting, those buying between $475K and $525K, and affected buyers will save up to $8,000, which is an increase of $500 from the previous system.

The new threshold will be effective for home purchase registrations made on or after February 22, 2017.

Minister de Jong said, “This will complement other actions we have taken, such as the introduction last year of a newly built home exemption to the Property Transfer Tax [on new homes under $750,000], which has helped more than 5,500 families save an average of $7,600. In Budget 2017 we are going further.”

He added, “When you ask British Columbians about the pressures they face, many will focus on the cost of housing. The problems with housing affordability and availability aren’t easy to resolve, but there are some levers the government can use to help ease things. But… we can’t just focus on getting more people into the market without adding to supply – that’s just going to drive prices higher.

“In the coming year the government will also explore and implement opportunities to partner and invest with local governments, to ensure cities and municipalities have the capacity and incentives… needed to expedite and process approvals and permitting of housing development applications.”

The province will also continue to administer its recently launched $700 million BC HOME Partnership program, which offers first-time home buyers up to $37,500 in down-payment-matching loans, which are interest- and payment-free for the first five years.

In a press release issued moments after the announcement, the Canadian Home Builders’ Association of British Columbia (CHBA BC) welcomed the increase to the first-time buyer exemption threshold. It added that the organization had recommended such an increase in its pre-Budget submission, “to better reflect rising home prices.”

Neil Moody, CEO of CHBA BC, stated, “CHBA BC has advocated for changes to the outdated property transfer tax structure for many years, and this reduction in tax is positive for first-time home buyers in all areas of the province.

“It may seem like a small increase, but it represents that the program is keeping pace with rising home prices. It provides a larger threshold for first-time home buyers to purchase within and receive the tax savings.

” The Urban Development Institute also immediately offered its support to the move. President and CEO Anne McMullin said, “Increasing the Property Transfer Tax exemption threshold to $500,000 from $475,000 for first-time homebuyers’ will enable more locals and families to get onto the first rung of the property ladder.”

She added that the industry group also supports the government’s strong focus on working with local governments in 2017 and beyond to increase housing supply, which also creates more high-paying jobs in the sector.

“I know we keep hammering this point, but flooding the market with more housing options, from rowhomes and townhomes to duplexes and others, will help alleviate the pricing and demand pressures and create healthy, more affordable communities.”

A projected slowdown across the BC housing market is expected to leave the province with $483 million less revenue from its property transfer tax in 2017/18 – a 23.9 per cent drop year-over-year.

Over the following two years, the province projects revenue to fall an average of 3.9 per cent annually to reach $1.4 billion in 2019/20, compared with the more than $2 billion generated last year.

“We don’t expect the real estate market to be percolating along at the level it was last year,” said de Jong.

Certain taxes on real estate, however, are expected to generate greater revenue over the years to come. Once the current fiscal year ends, BC expects it will have earned $100 million in taxes on residential purchases made by foreign buyers in the Metro Vancouver region.

Total revenue from the province’s foreign buyers’ tax – implemented in August of last year – is expected to hit $150 million annually over the next three years: tax generated by $1 billion in residential properties purchased by foreign buyers annually through to 2019/20

Source: 

http://www.rew.ca/news/bc-budget-2017-bc-s-first-time-home-buyers-get-a-small-tax-break-1.10196350

There are markets in Ontario that have been tighter than Toronto this year? It takes how long to save up for a downpayment for a Vancouver home? Find out the answers to these questions and more in this roundup of surprising facts from BuzzBuzzNews’ coverage of the Canadian housing market this year.

1. Canadian homes made more in a year on average than the people living in them as of June Your home may be just sitting there all day, but on average it’s pulling in more than you are, at least as of June 2016. By the end of that month, the average price of a Canadian dwelling had risen $50,619 in 12 months to a whopping $503,301, noted BMO Chief Economist Douglas Porter. “Average weekly [Canadian] earnings among all industries, including overtime, over the past year were $953.16. That translates into annual pay of $49,565,” wrote Porter. At this rate, “a house” may become a common answer to the childhood question, “What do you want to be when you grow up?”

2. The GTA-wide average price for a detached home surpassed $1 million in September The Greater Toronto Area is a big place. It’s more than 7,124 square kilometres, in fact. The average detached home price stretching across this large swath of southern Ontario is pretty hefty, too. Standalone homes in the 416 area code, which includes downtown Toronto, have been going for an average of more than $1 million since February 2016 — with one exception, July 2015. But the whole GTA in all its sprawling glory only surpassed that level last month, when detached homes in the entire region sold for an average price of $1,013,788, according to the Toronto Real Estate Board’s stats for September.

3. Other Ontario markets have been tighter than Toronto this year Think Toronto real estate’s on fire? These Ontario housing markets were even tighter in April: Niagara Region and Hamilton-Burlington. In April, both markets had higher sales to new listings ratios — calculated by dividing sales with new listings for a month and expressed as percentage — than Hogtown. Niagara’s ratio was a towering 85.1 per cent while Hamilton-Burlington’s hit an impressive 81.6 per cent. Meantime, Toronto’s was 74.8 per cent. Typically, ratios between 40 and 60 per cent are considered balanced, while anything veers into seller’s market territory.

4. 13.2 per cent of Canadian real estate professionals think China’s leader is a North Korean dictator or communist revolutionary Given all the discourse on foreign buyers — and particular investors from China — and their possible role in driving up home prices in Canada’s hottest housing markets, you’d think realtors might be learning more about them. A study suggests many aren’t. Some 13.2 per cent of Canuck real estate professionals selected either Kim Jong-un, chairman of the Workers’ Party of Korea (read: dictator) or Chinese communist revolutionary Mao Zedong, who died more than 40 years ago, as the current Chinese leader when quizzed by Juwai, a website that helps homebuyers in China view international properties. Respondents also had some trouble identifying the Chinese flag.

5. It takes median-income earners in Vancouver roughly a decade to save for a downpayment on a home In the first quarter of this year, National Bank, Canada’s sixth largest bank, studied how long it would take median-earning Vancouver households to sock away enough cash for a minimum downpayment on a home there. The study, which assumes households will save 10 per cent of its pre-tax income, found it would take median-earning households 106.8 months — more than nine years.

6. But internationally, downtown condos were relatively cheaper in Vancouver (and Toronto) than in many other global cities Vancouver and Toronto aren’t shining examples of housing affordability, yet when looking at a number of other major cities worldwide, they compare favourably. National Bank released another report in July, this time comparing local incomes to 90-square-metre condo prices in 18 large global markets. Vancouver, where these condos were 11.3 times the average family income, was the fifth-most affordable. Toronto, where they were 9.4 times average family earnings, placed third.

7. Canadians amassed $200 billion in wealth from residential real estate in a single year From April 2015 to the end of March this year, the Canadians collectively earned wealth to the tune of $200 billion from high-flying home prices, says Adrienne Warren, a Scotiabank economist. For comparison, in the year 2000, the housing market generated $70 billion in wealth.

8. Most Toronto home sales were to first-time buyers in 2015 Earlier this year, the Toronto Real Estate Board released its 2016 GTA housing market forecast and 2015 review, including results from an Ipsos Reid poll that shed light on who, exactly, was buying homes in the area in 2015. The Ipsos Home Owners Survey, which drew responses from 1,000 GTA residents 18 and older who said they’d purchased a home in the past 12 months (as of November), suggests 53 per cent of GTA homebuyers were doing so for their first time ever in 2015.

Source: 

http://news.buzzbuzzhome.com/2016/10/8-eye-popping-facts-canadian-real-estate.html