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The Canadian Home Builders ’
Association is a non-profit organization
dedicated to education, professionalism, consumer Question: Please explain the Property Transfer Tax Answer: PROPERTY TRANSFER TAX IS DOUBLE TAXATION. The Canadian Home Builders' Association has been a long-time advocate of housing affordability. Often some of the solutions encouraging affordability involve simple matters of common sense.
For example, British Columbia's Property Transfer Tax (PPT) is a classic example of double taxing consumers, which defies common sense.
When a builder purchases a lot on which to build a house, the Property Transfer Tax of 1% is paid on the first $200,000 of the value of the property, and 2% on the remaining value.
For example, a builder will pay PTT of $4,000 on a lot costing $300,000. When the builder builds and sells a home on that lot, all of the costs associated with the development, including the PTT are part of the final purchase price, say $600,000.
The consumer will pay $10,000 in PTT, part of which includes the $4,000 PTT originally paid on the lot. This is double taxation, pure and simple.
The government will have collected $14,000 from two land transfers, in a short period, on the same piece of property, despite the fact that the property has always been intended for sale to a single homebuyer.
The consumer will have paid all of that $14,000 in the purchase price, and the second PTT assessment.
Common sense says the PTT should be applied only when the end purchaser buys the property. BC’s present PTT system fuels the spiraling cost of housing.
The government's argument is they need the $800 million in PTT revenue to pay for health, education and social services. Yet, why aren't those services paid for by all taxpayers, rather than double taxing home purchasers?
There is no justification for double taxing homebuyers, especially when the BC government is experiencing record revenue from the industry, and where housing affordability has become a critical issue throughout BC.
Organizations including the Canadian Home Builders’ Association, BC Chamber of Commerce and the BC Real Estate Association have voiced their objections to the PTT.
However, double-taxed homebuyers must also voice their objections to their MLA’s.
Discussions around housing affordability ring hollow until issues of common sense are addressed. The PTT is a good place to start.
For more information on CHBA-Victoria go to www.chbavictoria.com, www.careawards.com , or email info@chbavictoria.com . Look for "Ask a Home Building Professional" every Wednesday in the Times Colonist. |
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CHBA Victoria #1-3690 Carey Road, Victoria, BC,
V8Z 4C2 |
