Realtors lobby for tax changes

The real estate industry is facing an uphill battle trying to convince cash-strapped senior governments of tax reforms to make homes more affordable.

Executive members of real estate associations — including Dick Pemberton and Brian Ledoux from Kamloops — met recently with political representatives in Victoria and Ottawa.

They made a case in Victoria for either eliminating the property transfer tax (PTT) or having it indexed for inflation.

B.C.’s PTT is the highest in Canada. The tax was introduced in 1988 as a luxury tax under then-premier Bill Vander Zalm yet it was never indexed, said Dick Pemberton, president of Kamloops and District Real Estate Association.

Since then rising values have thrown its original structure out of balance, creating a significant barrier to affordability.

“We’re hoping for incremental change, but it won’t be quick,” Pemberton said.

The PTT has always been levied on a two-tiered basis, with one percent charged on the first $200,000 of market value and two per cent charged on the balance of the purchase price. In 1988, only five per cent of the homes sold were in the higher-tax category. Now that figure stands at 88 per cent of homes sold.

The B.C. Real Estate Association is also asking that the HST rebate threshold of $525,000 be indexed for inflation.

In Ottawa Pemberton and his counterparts from across the country sought to have the amount first-time buyers are permitted to withdraw from their RRSPs indexed to inflation.

They also asked federal representatives again to allow deferral of the capital gains tax when a property is sold and the proceeds are reinvested within one year. As it stands, the tax is a disincentive to reinvestment, the realtors argued.

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