- by Jeff Nagel - Surrey North Delta Leader
- posted Feb 19, 2015 at 10:00 AM— updated Feb 19, 2015 at 11:14 AM
Premier Christy Clark says she wants to eliminate B.C.'s Property Transfer Tax over the long term but the province can't yet afford to forgo the billion dollars a year it generates.
The premier was asked about the provincial tax on real estate transactions at an appearance Wednesday before the Surrey Board of Trade.
"When we really start making a dent on our debt we really want to start knocking down the Property Transfer Tax, because it's a drag on our economy," Clark told the business audience. "We're not quite in a position to be able to do that yet but It is absolutely part of our long-term plan to get rid of it."
The PTT consists of one per cent charged on the first $200,000 of a property's value and two per cent after that. For a $600,000 house, it means $10,000 is due every time it changes hands.
The province collected $1.04 billion in PTT in the 2014 fiscal year but projects that will drop to $928 million this year due to an expected decrease in property sales.
Questioned later, Clark declined to give a timeline for the idea and downplayed the comments.
"I wouldn't characterize it as a promise," she said. "It's something that we'd like to do. A promise is something we believe we can do. We don't know that we can do it yet. It's a billion dollars in revenue for government."
Clark said she would like to at least cut the tax to improve home affordability, but said the money would have to be made up elsewhere.
The PTT raises significantly more than the government gets from either forestry ($757 million), natural gas royalties ($542 million) or tobacco taxes ($770 million.)
It's not the first time Clark has dangled populist suggestions of tax or fee relief far down the road. During the 2013 election campaign, she said Port Mann Bridge tolls could be eliminated ahead of schedule once a windfall from LNG begins to arrive.
Realtors during that campaign urged the province to at least increase the threshold at which the two per cent portion of the PTT kicks in to reduce the amount of tax charged on average to higher end homes in Metro Vancouver.
Rising property values have made many more homes subject to the two per cent portion because the $200,000 threshold has never been increased since the PTT was created 28 years ago. There are some exemptions for family transfers and first-time home buyers.
The government's PTT take has fluctuated with the pace of real estate sales, but has more than tripled from $302 million in 2001.