One market has reduced land transfer taxes for first-time homebuyers, but just how much of an impact will it have?
It’s been a whirlwind few months for real estate in British Columbia, but the latest news will likely be viewed as a small victory by real estate agents.
Effective Wednesday, the threshold for BC’s Property Transfer Tax exemption for first-time homebuyers has been increased to include homes up to $500,000 from $475,000.
However, just how many will benefit was called into question by TD Bank.
“This will potentially help to save first time buyers up to $8,000 on the purchase of their first home, but its impact will be diluted by the 7% rise in home prices over the last year,” the bank said following the release of BC’s 2017 budget.
The news was lauded by one real estate association, which also had some feedback for the ongoing revolution of the exemption.
“BCREA appreciates this government’s attention to the needs of first-time homebuyers,” the British Columbia Real Estate Association said. “To keep pace with the dynamic real estate market and ensure that homebuyers aren’t left behind, the Association strongly believes that this threshold—and all others related to the Property Transfer Tax—should be indexed, with adjustments made annually.”
It was the lone housing-related announcement in the budget.
For its part, BCREA actually made recommendations to the government that the exemption be increased to include homes up to $750,000.
“That number would align with the exemption for newly-built homes and with the BC HOME Partnership program,” it said. This measure would have expanded consumer choices, because the First Time Home Buyers’ Program exemption applies to all homes, rather than only newly-built homes, which are often out of reach of first-time buyers.”
Indeed, with the average British Columbia home costing $621,093, many first-time buyers will still be required to front the extra tax.
Have your say: Was this announcement sufficient in addressing issues facing first-time buyers? Let us know in the comments below.