Seeking Tax Fairness for Homebuyers

Because housing affordability directly impacts the quality of life of British Columbians, BCREA consistently and regularly recommends that the provincial government minimize the negative impact of the Property Transfer Tax (PTT). That’s why BCREA will put the following recommendations forward during the annual provincial budget consultation process, conducted by the Select Standing Committee on Finance and Government Services.

BCREA recommends the provincial government:

  • index the 1% PTT threshold of $525,000 using Statistics Canada's New Housing Price Index, and make adjustments annually, and
  • increase the 1% PTT threshold from $200,000 to $525,000, with 2% applying to the remainder of the fair market value.

The PTT has always been applied in the following way: 1% on the first $200,000 of the fair market value of a property, and 2% on the remainder.

Despite the dynamic nature of the housing market, the structure of the PTT has not changed since its introduction in 1987, when it was described as a “wealth tax.” At that time, the average home price was $101,916, and the 2% portion of the tax was expected to apply to only 5% of sales. In 2012, the 2% portion applied to more than 85% of homes sold in the province.

The PTT places an unfair burden on homebuyers, and is by far the highest provincial property transfer tax in the country. While BCREA understands the government’s objective to balance the budget, adjusting the PTT may well stimulate additional activity in the real estate market, encourage spending related to property transactions and would certainly demonstrate an understanding of the important role of real estate and property owners in the provincial economy.

For more information about BCREA's government relations role and other public policy positions, visit


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Arran McLellan


Housing Market Picking Up Steam
BCREA 2013 Third Quarter Housing Forecast Update

Vancouver, BC – August 22, 2013. The British Columbia Real Estate Association (BCREA) released its 2013 Third Quarter Housing Forecast Update today.

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 3.9 per cent to 70,300 units this year, before increasing a further 6.1 per cent to 74,600 units in 2014. The five-year average is 74,600 unit sales, while the ten-year average is 86,800 unit sales. A record 106,300 MLS® residential sales were recorded in 2005.

"After a marked pull back of consumer demand in 2012, the housing market is now transitioning to more elevated home buying activity,” said Cameron Muir, BCREA Chief Economist. “However, the effect of sluggish employment growth this year is expected to spill over into 2014, limiting housing demand to a 6 per cent increase, with total home sales matching the 5 year average."

"The average MLS® residential price in the province has been revised from remaining unchanged to increasing 3.3 per cent to $531,700 this year. A stronger than expected decline in the inventory of homes for sale has created balanced market conditions in the Lower Mainland, causing home prices to align more closely with overall consumer price inflation,” added Muir. The average MLS® residential price in BC is forecast to increase 2.2 per cent to 543,400 in 2014.

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To view the full BCREA Housing Forecast Update, click here.

For more information, please contact:

Cameron Muir Damian Stathonikos
Chief Economist Director of Communications and Public Affairs
Direct: 604.742.2780 Direct: 604.742.2793
Mobile: 778.229.1884 Mobile: 778.990.1320
Email: Email:

July Home Sales Highest Since 2007

Vancouver, BC – August 14, 2013. The British Columbia Real Estate Association (BCREA) reports that a total of 7,650 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC for July, up 18 per cent from July of 2012. Total sales dollar volume was 32.8 per cent higher than a year ago at $4.09 billion. The average MLS® residential price in the province was $534,360, up 12.5 per cent from July 2012.

"Home sales in the province posted their strongest July since 2007,” said Cameron Muir, BCREA Chief Economist. “After six consecutive months of rising consumer demand, it’s now clear that BC housing markets are recovering from tighter lending regulations introduced last year,” added Muir.

"Rising home sales are unlikely to put any significant upward pressure on home prices,” cautioned Muir, “as the inventory of homes for sale is expected to keep pace with demand.” Many potential home sellers that have been holding off for improved market conditions are expected to put their homes on the market to meet the swelling ranks of home buyers.

Year-to-date, BC residential sales dollar volume was down 2.8 per cent to $22.9 billion, compared to the same period last year. Residential unit sales were down 4 per cent to 42,986 units, while the average MLS® residential price was up 1.3 per cent at $531,928.


Re: Final Cost of Buying a Home

1. Down Payment: This is any amount greater than 5% of the purchase price of the home. Anything less than a 20% down payment and you will have to get mortgage loan insurance.

2. Deposit: This is due when a contract of Purchase and Sale is written and accepted. This deposit forms part of your down payment with the remainder of the down payment due at closing.


3. Mortgage/Application fee: There can be some fees involved with applications and or mortgage fees, but they are quite rare and will be explained to you before you move forward. And they are usually due to a tough situation where conventional lenders cannot help you.

4. Appraisal Fee: In order to complete a mortgage loan your lender may ask you to do an appraisal and this will usually run between $250-350 + tax, but it can vary according to the location and property type.

5. Mortgage Loan Insurance: If you make less than a 20% down payment, you have a high ratio mortgage.  Mortgage insurance lets you buy a home with a minimum of 5% down.  This insurance protects the lender by ensuring that they are paid out by the insurer if the borrower defaults. This amount is a % and based off the down payment and mortgage amounts.  Expect to pay at least a few thousand dollars if you have a minimum down payment.
NOTE: This is not a fee that is charged up front, standard practice is to add it to the mortgage amount. And you only have to purchase it once for the life of your mortgage.

6. Home Inspection Fee: It is recommended that you have a property inspection for the property as a condition of your Offer to Purcahse. This cost is usually around $500 for a single family home and $350 for a strata condo unit. The inspection looks at all the components of the home and gives you an idea of the condition of the home.


7. Survey (certificate of location): This is done at the buyer’s expense and is sometimes needed as a condition to receive a mortgage. If the survey is more than five years old, you will need to have it updated. If the seller does not provide it the buyer will have to pay. The cost is anywhere from $1000 to $2000 for the survey.


8. Title Insurance:  Your lawyer may suggest that you get title insurance. Title Insurance is an insurance policy for the benefit of the lender only, and it's bought at the solicitor at closing. It costs roughly $200-$300.

9. Property Transfer Tax: This tax is 1% on the first $200,000 and 2% on the balance. First time home buyers are exempt from this tax if the purchase price is less than $425,000. There is a partial exemption on amounts between $425,000 and $450,000, however at $450,000 or above the full tax is payable. 

NOTE: PTT has to be paid in cash at closing - it can't be added into the mortgage unless you make a smaller down payment.

10. Water tests: The potability of the water should be tested if the home is on a well system. This will ensure that the quality and supply is adequate. This costs is usually between $50-$170 and can be negotiated into the Contract of Purchase and Sale.


11. Septic Tank: If the home has a septic tank, it should be professional inspected to make sure the components are in good working condition. The cost is usually $250-$350 and can be negotiated into the Contract to Purchase.


12. Status Certificate (Condo): This certificate outlines the financial and legal state of the strata corporation.  The cost is up to $100.


13. Prepaid Property Taxes and/or Utility Bills: If the seller has paid the property taxes for the year or other costs (such as filling the oil tank), you will need to pay the seller back. This is done at closing time when adjustments take place.


14. Property Insurance: The lender will require that you have contents and property insurance to cover the cost of replacing the home in case of loss. Speak to a home insurance company for costs, they average around $400-$800 depending on the home, location, riders, etc… You will need to have this in place at 12:01am closing day to cover you for loss.


15. Legal fees:  Vary depending on which lawyer/notary you use, as well as what work is required from them. Expect to pay at least $700+ for a home purchase (less for a mortgage renewal or refinance).


16. GST: This is the 5% provincial tax cost plus the 2% transitional tax, which is on the purchase price.  There are refunds of the gst amount up to $350,000 on a new home. The rebate is 36% of the GST on any price up to $350,000 which equates to 1.8% of the purchase price, with a max rebate of $6300 at $350,000. Between $350,000 and $450,000 the rebate decreases to zero, (for every $10,000 increase in price, the rebate is $600 lower).  Over $450,000 there is no rebate. 


MLS® property information is provided under copyright© by the Vancouver Island Real Estate Board and Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification.