Vancouver Real Estate Blog

Finance Minister Kevin Falcon Scraps HST And Returns PST

B.C. will scrap the HST and return to the PST on April 1 2013, Finance Minister Kevin Falcon announced on Friday in Victoria.

Until that time new home buyers will be able to take advantage of expanded rebate program and a transitional tax designed to ensure that there is no tax difference whenever they choose to buy their home — provided it costs $850,000 or less.

"The B.C. new housing rebate threshold will be increased to $850,000, meaning more than 90 per cent of newly built homes will now be eligible for a provincial HST rebate of up to $42,500," said a statement issued by the Ministry of Finance on Friday.

"The housing transition rules help ensure when people buy a newly constructed home under the PST, whether built entirely under the HST, entirely under the PST, or partly under HST and partly under the PST, they will all pay a consistent and equitable amount of tax."

The government also rolled out a new grant designed to encourage people to buy vacation homes outside of Metro Vancouver and Victoria.

"In addition...purchasers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012."

Falcon said he expects the new rules will bring certainty to new home buyers and the building industry.

"The relief measures announced today are a boost to home buyers purchasing either a new primary residence or a secondary home. At the same time, they help an important job-creator in all parts of the province."

The move was welcomed by the homebuilding industry on Friday.

More details on how the transition back to the PST will affect other goods and services will be rolled out later this spring.

"For goods and services that will be subject to PST, PST will generally apply where tax becomes payable on or after April 1, 2013."

Quebec's Provincial Real Estate Association Is Appealing The recent Quebec Court Decision That Upholds The Right Of The For-Sale-By-Owner Firm DuProprio

Quebec’s provincial real estate association will appeal a recent Quebec Court decision that upholds the right of the for-sale-by-owner firm DuProprio.com to put For Sale signs outside properties and to advertise in newspapers.

The court rejected the argument that the unlicensed DuProprio is allowed to act like a traditional real estate broker.

In her judgement, Judge Nicole Martin wrote that DuProprio does not identify itself as a real estate broker and that its advertising does not make it seem that it performs the tasks of brokers. Selling a home is not the exclusive domain of real estate brokers and the way an owner decides to sell a home “belongs to him or her and several options are possible,” she wrote.

In a statement, Robert Nadeau, president and CEO of the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ), expressed concern about the ruling, which he called contradictory. The court is acquitting a company “that performed actions that gave the impression it was authorized to perform the functions of real estate brokers,” Nadeau said.

The OACIQ maintains DuProprio acts in a matter similar to that of real estate brokers and by doing so confuses the public, which can be left unprotected if troubles arise in the selling or buying of a home.

The court action was started in 2009 by the OACIQ’s predecessor, the Association des courtiers et agents immobiliers du Québec.

Just before Christmas, Nadeau announced the decision will be appealed. “We have serious reasons to believe that DuProprio committed several infractions of the Loi sur le courtage immobilier (real estate brokerage law) and that’s why we’re appealing this decision,” he says.

Property Transfer Tax Is 25 Years Old

For 25 years, the PTT has been adding to the cost of homes.

Hardest hit are low equity buyers who may not qualify for the

PTT First Time Buyer’ Program exemption. Many may have

spent years saving a downpayment. Faced with a tax that adds

$10,442 to a home with a benchmark price of $622,087, they stay

put.

The Real Estate Board’s response

Since before the PTT was first brought in by the BC Government

in 1987, the Real Estate Board has actively and persistently

campaigned against the tax.

At every opportunity, the Board has hammered home to the

provincial government the message that the PTT makes home

buying unaffordable. For example:

1. Each year the Board prepares a pre-budget submission to the

BC Select Standing Committee on Finance and Government

Services, a committee whose primary purpose is to seek

input about spending and tax priorities for the upcoming provincial

budget. Our submissions focus on the PTT’s harmful

effects on our neighbourhoods and our economy.

2. Each year the Board’s Government Relations Committee

(GRC) and Board representatives such as the president,

meet with MLAs in Victoria to recommend changes to help

mitigate the tax.

3. Year-round, the Board’s GRC meets with MLAs at public

functions and in their constituency offices in communities

throughout the Lower Mainland to again describe the harmful

effects of the tax and to recommend changes.

What has worked?

We have seen some progress.

• From 1987-1994, the Board asked the government to introduce

a rebate program for first-time buyers. In 1994, the gov

ernment

introduced the First Time Home Buyers’ Program.

First-time buyers can claim a PTT exemption provided they

meet eligibility requirements.

• In 2005, we asked the government to simplify eligibility

requirements so that more first-time buyers would qualify

for the rebate. The government implemented changes in the

Budget 2006

 

• In 2006 we asked the government to raise the first-time

buyer exemption price threshold to $375,000 from $325,000.

The government did this in

Budget 2007

.

• In 2007, we asked the government to raise the first-time

buyer exemption price threshold to $425,000 and to give

breaks to home buyers going green. The government raised

the price threshold to $425,000 and offered sales tax exemp

tions

for ENERGYSTAR qualified appliances, windows,

doors, skylights, home heating equipment and other energy

efficient

home upgrades.

What hasn’t worked?

Each time we’ve asked the government to remove the PTT, the

government has said no. This is because the tax generates sig

nificant

revenue which rather than being earmarked for housing,

goes into general revenue. We don’t see this simply as revenue.

We see it as excessive taxation against a targeted group which

results in an unnecessary, unaffordable closing cost to home buyers.

In 2011-12, the tax is forecast to cost BC home buyers $910

million. Since the tax was implemented in 1987, it has cost home

buyers $11.9 billion.

Continued on page two

Did you know?

While overall government tax revenues increased at an annual

compound rate of 4.2% since the 1999/2000 fiscal year, PTT

revenues ballooned at a rate of 21% per year. During the same

period, the contribution of the PTT to total tax revenue has

increased to 5.2% from 1.8%.

Source: Cameron Muir, Chief Economist, BC Real Estate Association

When REALTORS® ask potential home buyers what one expense can mean the difference between signing a

contract to buy a home and sitting on the fence, they’ll likely say the same thing: it’s the taxes. The tax that makes

homes more unaffordable in an already expensive market is the Property Transfer Tax (PTT).

 

.

 

Strata Property Amendment Act 2009 (Bill 8) - Province of British Columbia would like to hear from you

Provincial strata property legislation has been undergoing an overhaul for the past few years.

In 2009, the Strata Property Amendment Act, 2009 (Bill 8), received Royal Assent, bringing with it changes to age restrictions, disclosure of conflicts of interest, hearings, access to strata corporate records, votes for resolutions, notices by email, rental restrictions, special levies and more.

The provincial government is now drafting strata regulations for audited financial statements, depreciation reports and changes to Form B.

The government would like to hear what you think, via a survey hosted by BC Stats (to assure confidentiality).

You have until 4:30 p.m. on Monday, March 7, 2011 to complete the survey at
https://securesurveys.gov.bc.ca/welcomeALL.pl?SURVEYNAME=stratasurvey1

You can also submit your comments on survey-related topics by March 7, 2011 by email to housing.policy@gov.bc.ca or by mail to:

Housing Policy Branch, attention Veronica Barlee
Ministry of Public Safety and Solicitor General
PO Box 9844, Stn Prov Govt
Victoria, BC V8W 9T2

For information, visit the BC Housing Policy, Strata Properties website at
http://housing.gov.bc.ca/housing/strata.htm.

Taxes - How Much Do They Add To The Purchase Of A New Home???

The Property Transfer Tax (PTT) adds $15,884 to the average price of a detached home in Greater Vancouver (estimated at $894,210). While there is a rebate for qualifying first-time buyers, the home must be priced below $425,000 and there is a proportional exemption for homes priced up to $450,000.

The Harmonized Sales Tax on a new home adds 12%, with 7% of that amount being due to harmonization. There is a rebate of up to $26,250 for qualifying homes.

The total: taken together, total taxes on a new home in Vancouver amount to $123,189 – which brings the cost of that $894,210 home to $1,017,399.

However the government does provide rebates and exemptions to property buyers and owners.

Privacy Guidelines for Strata Corporations and Strata Agents

Privacy guidelines for Strata Agents and Strata Corporations is vast. Topics include guidelines for handling complaints from owners, privacy issues regarding video surveillance, entry door control systems and even employees and contractors who work on the property.

To read more about privacy guidelines for Strata Corporations and Strata Agents follow this link:

www.oipc.bc.ca/pdfs/private/Guidelines_StrataCorp(2009).pdf

Privacy Guidelines for Landlords and Tenants

Privacy guidelines cover a huge range of frequently asked questions, including what information a landlord can collect from a prospective tenant on the initial application and ongoing privacy issues that may develop during the course of a tenancy agreement, such as the use of video surveillance in apartments.

Follow this link for the guidelines:

www.oipc.bc.ca/pdfs/private/PrivacyGuidelinesforLandlordsandTenantsFINAL.pdf

 

Canadian and British Columbia's Labour Force Rate

Employment in Canada remained flat in September compared to August and is another indication of slowing economic growth. Gains in full-time employment were offset by losses in part-time employment. Part-time employment declined by 44,000, while an increase of 37,000 full-time jobs was recorded. However, over the past 12 months part-time employment has grown by a faster pace, +4.6% (+146,000), than full-time employment, +1.5% (+203,000).The unemployment rate edged down 0.1 percentage points to 8.0%, as fewer people, particularly youth, participated in the labour market.

Employment in British Columbia also remained unchanged in September, with a decline of 3,400 full-time jobs being offset by gains in part-time employment. However, BC employment is up 2.0% (45,600) from September 2009. BC is 3,200 jobs shy of the peak employment level of 2,323,500 recorded in July 2008. The unemployment rate in BC edged higher to 7.5% from 7.3% in August as a result of a 0.2% increase in the labour force. Looking forward, more tepid economic growth will mean slower job growth in the province throughout the second quarter of 2011. 

United States non-farm payroll employment decline by 95,000 in September compared to August. This decline was largely the result of a loss of 159,000 government jobs, primarily part-time Census workers. Private sector payroll employment increased a modest 64,000 in September. The US unemploymnet rate remained unchanged at 9.6% or 14.8 million. 

“Copyright British Columbia Real Estate Association. Reprinted with permission.”

The new Condominiun Manual - Third edition

Mike Mangan has published the third edition of the Condominium Manual. This is a guide to Strata Law in British Columbia written in plain language for everyone to understand. This 3rd edition encompasses all the legal, legislative and court cases since 2004 up to and including the amendments to the Strata Property Act in December 2009.

To order your own manual from the British Columbia Real Estate Association see the following link:

www.bcrea.bc.ca/publications/publications.htm.

Deferring taxes Property Taxes

The BC Government helps property owners who are unable to pay annual property taxes and are at risk of losing their homes. After deducting the Home Owner Grant, home owners can postpone paying all or part of the unpaid balance of their residential property taxes if they qualify for one of three low-interest tax deferment assistance programs.

Property Tax Deferment Program for seniors: property owners aged 55+, a surviving spouse or a person with a disability who are Canadian citizens or permanent residents under the Immigration Act (Canada) may qualify if they maintain a minimum equity of 25% of the current assessed value as determined by BC Assessment, if they have lived in BC for one year, if they occupy their home as a principal residence, and maintain a fire insurance policy on their home.

Financial Hardship Property Tax Deferment Program: low-income property owners with least 15% equity in their home who are Canadian citizens or permanent residents and have lived in BC for at least one year and occupy the home as a principal residence, may qualify.

Property Tax Deferment Program for Families with Children: qualifying home owners financially supporting a dependent child under age 18, who have at least 15% equity in their home, are Canadian citizens or permanent residents and have lived in BC for at least one year and occupy the home as a principal residence, may qualify.