B.C. luxury home tax idea would impact Oak Bay

“Luxury home” tax has been floated as a way to reduce pressure on the lower end of the market

  • Oct. 1, 2015 6:00 p.m.

Jennifer Blyth

Oak Bay News

The suggestion of a third tier of the B.C. Property Transfer Tax to target “luxury homes” would impact Oak Bay real estate, says the president of the Victoria Real Estate Board.

The current two-tiered tax is applied when a property changes hands.

Unchanged since implemented 30 years ago, the tax charges one per cent on the first $200,000 of the price and two per cent after that.

So, when a $600,000 home sells, $10,000 flows to the government. Overall, the tax currently adds more than $1 billion a year to provincial coffers.

The idea of a third tier for the sale of “luxury homes” has been floated as a way to reduce pressure on the lower end of the market, although what would classify as luxury has not been defined.

Addressing the recent Union of B.C. Municipalities convention in Vancouver, Finance Minister Mike De Jong suggested proceeds from such a tax could be funneled into incentives to build more rental housing or help first-time home-buyers, helping combat unaffordably high housing costs.

However, what’s defined as “luxury” in one market is average in another, noted VREB’s Guy Crozier.

For example, at a $1 million threshold, some communities would have few properties that would be affected, while in parts of the Lower Mainland and Greater Victoria, including Oak Bay, that could be a standard single-family home.

“I don’t think this would get a lot of support here,” Crozier said.

“We don’t want to see it go up and would like to see it become more of a fair tax.”

While prices in Oak Bay and Greater Victoria as a whole corrected following the 2008-09 economic downturn – which wasn’t experienced in Vancouver the same way – average house prices here are on the upswing again. Sale prices in Oak Bay have increased by about 10 per cent since January, Crozier noted.

“Any type of luxury tax put on a home would hit a large portion of sales in Oak Bay, which would be detrimental to the market.”

De Jong has been cautious about how to go about dispensing relief for high housing prices, noting that aid to entry-level home buyers could simply push prices even higher by increasing demand without greater supply.

After addressing the convention, he told Black Press that rental construction incentives could be one piece of the puzzle.

“Is there a way to also encourage the construction of more and new rental housing – that’s very much a part of this conversation,” he said.

Another option is to increase the threshold before the two per cent tax kicks in, or offer an exemption for first-time home buyers where they don’t pay the tax on the first $475,000, for example.

De Jong asked the gathered mayors and councillors whether relief should be focused on first-time home buyers, and whether it should go toward the purchase of any housing, or be targeted to increase the supply of new housing.

De Jong said most community leaders seem to support the idea of reforming the property transfer tax in a way that helps younger families get into the housing market.

He also reminded municipal politicians that they control zoning and therefore have the power to increase density and the number of homes available, applying downward pressure on prices

– with files from Jeff Nagel, Black Press

 

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Victoria city council unanimously voted Jan. 21 to develop a one-time relief fund for businesses hit by vandalism. (Courtesy of Victoria Police Department)
City offers relief funds for Victoria businesses hit by vandalism

Limited relief fund will come from 2021 contingency budget

James Summer, the City of Victoria’s new youth poet laureate. (Courtesy City of Victoria)
Slam poetry expert introduced as Victoria’s new youth poet laureate

Vic High alum James Summer will serve in the role for 2021

A seller on UsedVictoria.com has listed signed, first editions of the first three Game of Thrones books. (UsedVictoria.com)
Winter is coming: 1st edition, signed Game of Thrones books for sale in Greater Victoria

Three signed Game of Thrones books listed on Used Victoria for $6,000

(Pxhere)
Mill Bay nurse suspended after using Tensor bandage to trap long-term care patient in room

Susan Malloch voluntarily agreed to a three-day suspension of her certificate of registration

Businesses continue to struggle under COVID-19 restrictions as the pandemic reaches the one-year mark. (B.C. government)
Another 564 COVID-19 cases, mass vaccine plan coming Friday

15 more deaths, community cluster declared in Williams Lake

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of Jan. 19

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Darlene Curylo scratched a $3M ticket, BCLC’s largest ever scratch and win prize. (BCLC)
Kelowna woman in shock after winning BCLC’s largest-ever instant-ticket prize

Darlene Curylo couldn’t believe her eyes when she saw the amount of money she’d won from a scratch ticket

While each person has different reasons for becoming homeless, a UBCO study shows they learn through their interactions with different services to perform ‘as homeless’ based on the expectations of service providers. (Contributed)
Kelowna homeless forced to ‘perform’ for resources, says UBCO study

One participant in the study said ‘It is about looking homeless, but not too homeless’

Aquaculture employee from Vancouver Island, Michelle, poses with a comment that she received on social media. Facebook group Women in Canadian Salmon Farming started an online campaign #enoughisenough to highlight the harassment they were facing online after debates about Discovery Islands fish farms intensified on social media. (Submitted photo)
Female aquaculture employees report online bullying, say divisive debate has turned sexist

Vancouver Island’s female aquaculture employees start #enoughisenough to address misogynistic comments aimed at them

Gov. Gen. Julie Payette takes the royal salute from the Guard of Honour as she makes her way deliver the the throne speech, Wednesday, September 23, 2020 in Ottawa. THE CANADIAN PRESS/Fred Chartrand
Gov. Gen. Julie Payette resigns, apologizes for ‘tensions’ at Rideau Hall

Payette, who is the Queen’s representative in Canada, has been the governor general since 2017

Grounded WestJet Boeing 737 Max aircraft are shown at the airline’s facilities in Calgary, Alta., Tuesday, May 7, 2019. WestJet will operate the first commercial Boeing 737 Max flight in Canada today since the aircraft was grounded in 2019 following two deadly crashes. THE CANADIAN PRESS/Jeff McIntosh
Passengers unfazed as WestJet returns Boeing 737 Max to service on Vancouver flight

After a lengthy review process, Transport Canada cleared the plane to return to Canadian airspace

The top part of the fossil burrow, seen from the side, with feathery lines from the disturbance of the soil – thought to be caused by the worm pulling prey into the burrow. (Paleoenvironntal Sediment Laboratory/National Taiwan University)
PHOTOS: SFU researchers find evidence of ‘giant’ predatory worms on ocean floor

Fossils found the prove the existence of an ancient Taiwanese worm as long as two metres

Most Read