British Columbia Budget Assists Housing Affordability ( Real Estate ) and the Environment
Real Estate in Victoria and British Columbia (BC) in general just got a bit easier to buy. The BC Budget will help first-time home-buyers and current owners. Yesterdays budget will potentially give Victoria Real Estate market a boost and it will improve the affordability and sustainability of homes in Victoria and BC in General. The new measures were introduced in yesterdays provincial budget.
Improvements to Housing Affordability
The increase in the Property Transfer Tax (PTT) exemption threshold is an important step in the right direction to improve housing affordability. PTT is a big burden for buyers and is a significant cost to the purchase of a home.
In the new budget the PTT exemption threshold has been increased to $425,000 from $375,000, making this the third straight provincial budget in which the threshold has been adjusted. British Columbia Real Estate Association (BCREA) has consulted with government about our concerns on housing attainability, and it is encouraging that government has continued to respond to the needs of BC home-buyers.
First-time buyers further benefit from removal of the financing rule, which required them to have at least a 70 per cent mortgage to qualify for the exemption. With the new budget in place, they can now pay down their mortgages by any amount in the first year of ownership without losing entitlement to the exemption.
The PTT is a registration tax an individual must pay when purchasing or acquiring an interest in property. The amount payable depends on a property’s fair market value, and is charged as one (1) per cent on the first $200,000, plus two (2) per cent on the balance of the purchase price.
When is enough, enough? Even with the threshold change, the government will collect more than $1 billion in PTT revenue this fiscal year—a record amount. I would like to know where this money goes?
Green Initiatives Aid Homeowners
Yesterdays budget establishes an assortment of Provincial Sales Tax exemptions on home renovations, retrofits and purchases of energy-efficient appliances for current owners. This should help reduce home energy consumption and the related operating costs over a long term.
Homes that meet a green standard are more energy-efficient and environmentally sustainable. However, they cost four to six per cent more to construct, this is compared to existing housing.
In September of 2007, BCREA recommended to the government to introduce a pilot program that would encourage the purchase of new homes that meet a green standard through a reduced PTT. The Association also recommended Provincial Sales Tax rebates on purchases for renovations to improve energy efficiency and other environmental aspects. These suggestions are available online at www.bcrea.bc.ca/govt/2008ProvPre-Budget.pdf. For more information about BCREA, please visit their website.
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PS. Check out our new website www.PrestigiousPropertiesInVictoria.com and our Prestigious blog at http://prestigiouspropertiesinvictoria.blogspot.com/
Anders Treiberg, Associate Broker, REALTOR®
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