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Warren12
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BC Budget - No PTT for new homes under $750k

Wed Feb 17, 2016 10:12 am

This was an interesting announcement from the BC Liberals, and it further muddies the water around PTT.

As I understand it:

- All homes under $475k are exempt from PTT for First Time Buyers. But this exemption "gradually" goes away to $500k where PTT is at regular rates.
- New homes under $750k are now exempt from PTT for All Buyers
- All homes over $2M now have an additional 1% of PTT

Why they couldn't just change the system to a progressive taxation level regardless of home type or buyer status is beyond me. Now we have this overly complicated regime that kicks on and off at somewhat random price levels.

Side question: If somebody has signed a contract for a presale that hasn't completed yet under $750k, would they get PTT waived assuming it completes after today, which is when these rules go into effect?
 
whattodo
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Re: BC Budget - No PTT for new homes under $750k

Wed Feb 17, 2016 11:14 am

I would think its the completion date (when you take possession) that matters??

lots of info here:
http://www2.gov.bc.ca/gov/content/taxes ... on#qualify

What really sucks is the prorated reduction is only between 750K and 800k. So, if you buy a place for 749K you save 100% of PTT = $14,000. If you buy a place for 801K you pay the full property transfer tax of $15,000. Doesn't seem reasonable to me!
 
westar99
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Re: BC Budget - No PTT for new homes under $750k

Wed Feb 17, 2016 11:24 am

Good points Warren.

I take your point about Progressive Taxation.

Unfortunately in Greater Vancouver, Progressive Taxation based on Income really is an impossible concept to utilize.

We have a crazy economy where housewives and students on poverty level incomes (who pay next to nothing in income tax) own and live in $5,000,000 Kerrisdale mansions while $200,000+ a year doctors and lawyers (who pay high amounts of income taxes) struggle to buy condos or (former) modest shacks in working class parts of town. Let's not even get started about the middle or working classes.

It's not a healthy situation and something that simple progressive taxation won't fix.

I do agree the budget measures will do next to nothing. They should have instituted a non resident property tax surcharge (which could be offset against income tax paid to BC and Canada) and used the proceeds for (i) affordable housing and/or (ii) public transit improvements so the middle class can buy further out and commute more easily into work.
 
tdma800
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Re: BC Budget - No PTT for new homes under $750k

Wed Feb 17, 2016 1:24 pm

The budget will do a lot. More tax on higher end homes, and first time buyers pay less tax. Shouldn't matter to anyone if someone wants to buy a home and live in it or not as it keeps property taxes for everyone else lower.
 
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Warren12
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Re: BC Budget - No PTT for new homes under $750k

Wed Feb 17, 2016 2:24 pm

I would think its the completion date (when you take possession) that matters??

lots of info here:
http://www2.gov.bc.ca/gov/content/taxes ... on#qualify

What really sucks is the prorated reduction is only between 750K and 800k. So, if you buy a place for 749K you save 100% of PTT = $14,000. If you buy a place for 801K you pay the full property transfer tax of $15,000. Doesn't seem reasonable to me!
Thanks for the link, yes it appears the date of title registration is the key.

As for the $750-800k, yes that is the same narrow window as the $475-500k for First Time buyer exemption. It's arbitrary and silly.

There is some progressive aspect to the PTT, it's only 1% on the first $200k, then 2% beyond (to $2M), and so on. But the brackets don't make a lot of sense. Ditto with the MSP frankly, but that's a totally different issue.
 
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Warren12
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Re: BC Budget - No PTT for new homes under $750k

Wed Feb 17, 2016 2:28 pm

Good points Warren.

I take your point about Progressive Taxation.

Unfortunately in Greater Vancouver, Progressive Taxation based on Income really is an impossible concept to utilize.

We have a crazy economy where housewives and students on poverty level incomes (who pay next to nothing in income tax) own and live in $5,000,000 Kerrisdale mansions while $200,000+ a year doctors and lawyers (who pay high amounts of income taxes) struggle to buy condos or (former) modest shacks in working class parts of town. Let's not even get started about the middle or working classes.

It's not a healthy situation and something that simple progressive taxation won't fix.
Sorry maybe I should have given more detail on what I would consider progressive. Progressive as it links to home value, not income levels. If you are buying a $2M home you should be paying 10x the PTT of somebody buying a $500k home for example. I would say ditto for property taxes. I can't say I have too much sympathy for seniors who are now sitting on $3M of property they paid $100k for and now they are complaining about the tax bill. It's like a lottery winner complaining about paying tax. :roll:

Anyway, that isn't likely to happen. But there are clear and obvious ways for the government to extract its pound of flesh from the ridiculous SFH market in Vancouver, they just seem unwilling to do so.
 
tdma800
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Re: BC Budget - No PTT for new homes under $750k

Wed Feb 17, 2016 2:31 pm

When the fuss about the powerballs came about in January many in Canada complained it would be taxable whereas the lottomax wouldn't.

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