On February 21, 2017, the BC Government released Budget 2017, their fifth consecutive balanced budget. Significant cuts to MSP premiums and to the PST on electricity were announced, as well as further Property Transfer Tax relief for first-time homebuyers. The budget document includes summaries of the measures taken in 2016 and early 2017.
The following summary provides details on measures related to housing and BCREA’s public policy priorities.
Market Housing Affordability
Property Transfer Tax (PTT)
First-time buyer exemption – Effective February 22, 2017, the PTT exemption for new homes increases to $500,000 from $475,000. The partial exemption continues and now applies to homes valued between $500,000 and $525,000. BCREA has prepared the attached news release on this announcement, which will be distributed to the media on Wednesday morning. Foreign buyers’ tax – When questioned by the media about whether the tax would be applied beyond the Greater Vancouver Regional District, Minister de Jong indicated that no decisions had been made on that front, but that the southern Vancouver Island/ Victoria was the area of most interest.
Spending – The updated financial forecast for 2016/17 indicates that $293 million in PTT revenue is being dedicated to housing priority initiatives and other housing, rental or shelter programs.
Revenue – PTT revenue is forecast to decline 23.9% in 2017/18 due to expected slowing housing market activity. Revenue from the 15% foreign buyers’ tax is forecast at $100 million in 2016/17 and $150 million in each of the next three years.
| Tax revenue | Updated Forecast 2016/17 | Budget Estimate 2017/18 |
| Property Transfer Tax | 2,025,000,000 | 1,542,000,000 |
Housing Supply
In the coming year, the government intends to implement measures to expedite housing development application, approval and permitting processes.
Home Owner Grant
As announced on January 10, 2017, the threshold for the phase-out of the home owner grant is increased to $1,600,000 from $1,200,000 for the 2017 tax year. For properties valued above the threshold, the grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold.
Rental Housing
An additional $159 million is included to maintain assistance levels for low-income families and seniors, to help make rent more affordable in private market rental units.
Real Estate Services Act
The government has increased funding for the Office of the Superintendent of Real Estate to $9.7 million from $4.2 million over the next three years. This increase is funded by increased fees paid by real estate licensees, which take effect on April 1.
Invasive Species/Species at Risk
Budget 2017 provides $27 million over three years for a comprehensive caribou recovery program, which relates to the federal Species at Risk Act. In addition, $10 million is available in 2017/18 to support enhanced efforts to control and contain high-risk invasive plant species across the province and replace Crown-owned range fencing.
Water
The 2017/18 provincial component of the Clean Water and Wastewater Fund amounts to $40 million. This program is a federal-provincial partnership to invest in the rehabilitation of water, wastewater and stormwater infrastructure, the planning and design of future facilities, and upgrades to existing systems.
Flood protection
In 2016/17, spending for emergency prevention and preparedness increased by $78 million—some of which was paid out for Disaster Financial Assistance.
Click here for further details on Budget 2017.
Click here for BCREA’s news release and response to the Budget.