With the spring election in British Columbia right around the corner, I wonder, “Will the next government finally eliminate the Property Transfer Tax?”
Don’t hold your breath. Neither the NDP or The Liberals have given any indication that they intend to remove or even reduce it. Both parties agree that with the province running a deficit and trying to balance the budget, the tax is simply good public policy. One might be inclined to believe that promising to at least reduce the tax may garner a few votes, but it’s become so vital to provincial coffers that neither party is willing to even consider it.
As a review, the tax was first introduced in 1987 under the Vander Zalm Social Credit government as a “wealth tax.” It was calculated by charging buyers 1% on the first $200,000 and 2% on the remainder of the cost of the home. At that time only 5% of all the homes in B.C sold for more than $200,000. Last year 87% of the homes in the province sold for more than $200,000.
Today the roughly $800 million in revenue provided by the tax is simply too much for any future provincial government to campaign against.