Skip to main content

Maureen Bader: B.C. should eliminate property transfer tax, not undermine HST

By Maureen Bader,

Taxpayers in British Columbia are outraged about the harmonized sales tax, and rightly so. It will add a new tax to many items previously exempt from the provincial sales tax, such as restaurant meals and new homes. The HST does, however, have some theoretical benefits. It simplifies the tax system and makes the province a more competitive place for business investment.
Nevertheless, the surprise HST announcement was met by a business lobbying effort demanding relief from the tax. One group that got a break was the new-home building industry. While this may help a few new-home buyers, it undermines the tax simplification benefits of the HST and does little to improve B.C.’s competitiveness. In fact, the government could have bolstered the competitiveness of the province and helped all families struggling to purchase homes by eliminating the property transfer tax instead.

The property transfer tax hits all property sales. It has no economic benefit, taxes mobility, and is a job killer that discourages companies from locating in B.C. The PTT adds two percent to the property price, less $2,000. So, a family struggling to buy a $525,000 home would have to pay an additional $8,500 in PTT.

The PTT was brought in by the Vander Zalm government in 1988 and became such a fantastic cash cow that no government since has eliminated it. Yet, the B.C. government knows the PTT is a bad tax. A motion at the B.C. Liberal convention in 2006 moved that the government abolish the PTT. The resolution was passed with overwhelming support and is part of B.C. Liberal party policy.
But this is where party policy and government policy diverge.
This tax generated almost $1 billion in revenue each year over the past five years on the backs of families struggling to buy homes, searching for a better life in new locations, and on businesses trying to expand. It makes B.C. a less competitive place for business investment.
Not only that, the revenue brought in by the PTT makes the break on the HST for new-home buyers look like chump change.

Since it announced the HST, the government has said it wants to be sure some new-home buyers pay “no more” in tax on new homes than they would have paid before the HST. Then, to show it had been listening to complaints about the HST, the government raised the threshold for the HST rebate on new homes from $400,000 to $525,000, and the maximum rebate from $20,000 to $26,250. This move will only put about $80 million per year back into the pockets of homebuyers, far less than what eliminating the PTT would have.

So the question becomes, why would the government complicate the HST and pander to the building industry by giving them a break instead of just getting rid of the PTT? The government might say it was because it listens to its key support groups. However, the real reason is more likely because government is addicted to the revenue stream the PTT provides.
If the government were truly interested in making B.C. a competitive place for business investment and helping families buy homes, it would eliminate the PTT.

Maureen Bader is the B.C. director of the Canadian Taxpayers Federation.

Comments

Popular posts from this blog

Just Listed at The Delta Whistler Village Suites in Whistler Village! 4308 Main Street, Whistler, B.C. - PRICED TO SELL at $159k!

Located on the Village stroll cobblestone in the heart of Whistler Village! Park your car and walk everywhere! Just steps to both Whistler and Blackcomb Gondola's, prime restaurants, shops, bike & valley trails, night life and more! This unit sold for over $300k in December 2004! Now is the time for you to own in Whistler. Call me and let's get started! Contact a Whistler REALTOR:    Matthew Callaghan -  REALTOR ® Sutton Presidents Club Member ®  - 2011 & 2012 Sutton Group - West Coast Realty O: (604) 935-3380 |   C:  (604)966-8678 Search Whistler's Best Real Estate Listings Here www.MatthewCallaghan.com        

Which Buildings in Whistler are Phase 1 and Which Buildings in Whistler are Phase 2? Phase 1 and Phase 2 Covenants in Whistler.

Whistler Resort Land Properties with Restrictive Covenants Include (but are not limited to): Property Name Covenant Type Adara Hotel Phase 1 Town Centre AlpenGlow Phase 2 Town Centre Aspens On Blackcomb Phase 1 Town Centre Blackcomb Lodge Phase 2 Town Centre Blackcomb Professional Building Phase 1 Town Centre Coast Blackcomb Suites Phase 2 Town Centre Coast Whistler Hotel Phase 2 Town Centre Crystal Lodge Phase 2 Town Centre Delta Whistler Village Suites Phase 2 Town Centre Executive Inn Phase 2 Town Centre Fairmont Chateau Whistler Phase 2 Fitzsimmons Phase 1 Town Centre Four Seasons private residences Phase 1 Town Centre Four Seasons Resort Whistler Phase 2 Glacier Lodge ...

The Four Seasons Resort & Spa in Whistler, Canada - Just Listed - 2 Bath, 1 Bed Luxury Unit - $399k

Enjoy beautiful Whistler valley views and western exposure from this luxury 806 sq ft deluxe, 1 bedroom & 2 bath unit. Own a piece of Whistler luxury at The Four Seasons Resort & Spa , located at the base of Blackcomb Mountain and steps to The Chateau Whistler Golf course . Property features a full service spa, pool, hot tub, ski valet, restaurant, 24 hour front desk, in room dining and world renowned 4 star service. This Phase II property allows 56 days of personal use a year. When your not enjoying the property personally it is generating healthy rental revenues managed by The Four Seasons! Call me for rental revenues and more information.    Matthew Callaghan -  REALTOR ® Sutton Platinum  Club Member ®  2013 Sutton   Presidents Club Member ®  2011 - 2012  Sutton Group - West Coast Realty O: (604) 935-3380 |   C:  (604)966-8678 Search Whistler's Best Real Estate Listings Here www.Mat...