Provincial Government New Taxes And How They Affect The Surrey Real Estate Market
Effective, February 21, 2018, the richest BC homeowners are being hit with an additional transfer tax. This property transfer tax is aimed at properties worth $3 million or more this increase is from 3% to 5% in 2019. In addition to this tax hike the BC Government is also increasing the provincial school tax for these luxury homeowners. Really it is about time for regulations like this as some of the most expensive neighbourhoods in the lower mainland are claiming some of the lowest incomes. Since this has to be the furthest from the truth and the world tax laws have so many loops holes something had to be done to collect on these speculators
B.C. Finance Minister Carole James announced February 20th the province has expandied the foreign buyer tax into the Fraser Valley, Nanaimo, and Okanagan areas.
Demand
The new speculation tax targets foreign and domestic speculators who do not pay income tax in B.C. including those who leave their homes vacant. The speculation tax will begin at 0.5 per cent of assessed property value in 2018 and rise to 2 per cent in 2019.
The province also hopes to stave off speculation by closing practice of “shadow ownership”. The speculators that could have helped push the real estate prices up will now have to go through more tax loopholes. The process of information regarding condo presales and beneficial ownership has had major implications on costs to the condo market. In fact the Federal government has had to go to the developers and formally as for the information on who has purchased and flipped these presales. Were not sure to what length the Federal Government has fgone to raise money or how many auditors have been hired to find the people that have profited from such practices. But you can be sure that if there is money to be found that they will continue to go after this information to collect millions in taxes.
“B.C.’s real estate market should not be used as a stock market,” Carol James said. “It should provide safe and secure homes for families, renters, students and seniors. That’s why we’re cracking down on speculators who distort our market.”
A new database system is set up to track pre-sale condo assignments. Ensureing that those who are intending to flip properties pay the required taxes each time the condo changes hands, because sometimes title had not even been accurately accounted for.
Requiring additional information regarding beneficial ownership and separate, specific land registry intends to do away with offshore companies and trusts that park capital in B.C.’s housing market while obscuring their identity.
Supply
The provincial government has promised over $6.6 billion in affordable housing funding over the next 10 years. This will go towards creating over 114,000 affordable homes for purchase and over 14,000 rental units. If the “Affordable” units are not based in central areas this will not really help with the affordability market for renters if they have to travel great lengths to commute for work.
A $450-million student housing program will allow post-secondary institutions to borrow directly from the province. This is also great if the process for building approvals can be sped up, or this will take so many years for inventory to hit the market. $734 million aimed at building supportive housing for women and children fleeing violence.
The budget also includes 2,500 new supportive housing units for homeless British Columbians and 1,750 units of social housing for B.C.’s indigenous people.
Renters
Young people, low-income citizens and seniors will receive more rental assistance, by way of a $116-million increase to the Shelter Aid for Elderly Renters (SAFER) and Rental Assistance Program (RAP) benefits. On average, seniors will receive an extra $930 per year through SAFER, while low-income families will receive $800 more annual through RAP.
