There should be no property transfer tax whatsoever in B.C., but if it must remain, the Kamloops Chamber of Commerce says it wants to see just a one percent flat tax similar to what’s levied in other provinces.
As well — after the province imposed a whopping 15 percent tax on foreign buyers this week to address the Lower Mainland price squeeze — the local chamber is calling on the government to adopt a flat, two percent property purchase tax for all of B.C.
“It's nice to see that the provincial government realizes the PTT needs adjusting and we look forward to working with them to get a result that works well for the entire province, not just Vancouver,” said Brant Hasanen, the chamber’s policy development chairman.
Two years ago, the local chamber submitted its position to the provincial government on the need to charge a higher tax to foreign buyers than to domestic buyers. That certainly wasn’t the main motivation for bringing in the 15 percent foreign tax, but the chamber feels it played some role in focusing attention on the issue.
“I’m comfortable that there is some influence there,” Hasanan said, noting that the chamber has good communication with the province on policy considerations. The issue was brought to the chamber’s attention through its regular roundtables and reaching out to the business community, he said.
Currently, the PTT is charged at one percent for the first $100,000 and two percent on the remainder, but in a province where price is an issue, it’s the highest rate in the country and adds on average about $5,000 to the cost of a home. In Alberta, the tax would be $120. In Saskatchewan, the tax would generate $1,050, and in Ontario, $1,750 on an average home.
“One of the things that’s been brought to our attention many times is the inequity of the property transfer tax. It just makes the buying and selling of real estate more expensive than it needs to be.”
In its 2014 position paper, the chamber recommended:
- Amending the PPT Act to provide for a new primary residence grant;
- Continuing to increase the threshold for the First Time Home Buyers exemption; and
- Introducing a new PPT rate of a minimum of 2 percent of the property purchase price for all property in B.C. bought by non-residents of Canada or corporations controlled by non-residents.
Hasanen said they would like to see the tax ditched, but recognize the province’s need to balance its fiscal plan.
He doesn’t feel 15 percent will be good for business, that it could have the unintended consequence of driving foreign buyers into outlying markets such as Kamloops and Kelowna. A lack of inventory in the Interior could drive up prices here just as foreign buyers are blamed for driving Lower Mainland prices through the roof.