Well, yesterday Carol Taylor, our Minister of Finance, delivered the government’s annual budget. Expressing concern about housing ‘affordability’, the Minister announced a change related to the Property Transfer Tax system (discussed earlier here).
Regrettably, the change did nothing to reduce the rate of taxation in general. So, if you are not a first time home owner, there was nothing here for you.
But if you are a first time home owner, and if you meet all of the other qualifying conditions, this change could put a smile on your face.
Under the proposed new rules, homes throughout BC which sell for $375,000 or less qualify for the full exemption. How much is that worth? $5,500.
The savings will reduce to zero at the $400,000 price point, and is pro-rated at any price between those two figures.
What does this mean in the context of the Greater Victoria Area home market, from Sidney to Sooke? Well, so far this year, binding sale contracts have been created for 799 residential housing units. Of those, 365 were priced at or below $375,000.
Digging a little deeper, you can see that only 65 of those 365 units were single family homes, and that the bulk of qualifying properties consisted of strata titled units.
So, the practical reality is that if you wish to take advantage of this ‘break’, you’re likely going to be shopping for a condo, not a single family dwelling.
But that’s hardly anything new. It shouldn’t come as a big surprise to anyone with even just a passing familiarity with the Victoria housing market that entry level housing for most first time home buyers is going to be a condo. With the average price of condos in January running around $350,000, and with the six month average running at around $309,999, this new ‘break’ just adds a bit more flexibility for some of the more affluent first time buyers (maybe with mom and dad’s help?) to buy a condo very nice condo in an extremely nice part of the world.
Bye for now,
Duncan Boan
Bye for now,
...Victoria's blogging real estate professional.
