Investors are wary of high prices of real estate in British Colombia that are caused by expensive property tax and big fees charged by realtors.
The B.C. government is locked in a dilemma of irony. On one hand, it has high hopes of becoming one of the world's greenest and most livable cities while on the other it is trying to fight off the image that only the wealthy and retired individuals can seek to own a home in the country. According to Business in Vancouver, the B.C. government has finally realized that something needs to be done with the property transfer tax or PTT which is outdated and needs to be adjusted to help first-time and low-end buyers while still keeping its collection pace with a staggering $1.1 billion for this year alone.
Spearheading the campaign to tinker with PTT is the BC Real Estate Association or BCREA. The number one contention for the much needed change is the fact that the tax in effect is still based on the original provision which dates back to 1987. At that time, homes in the Vancouver area were priced lower than $200,000 with a 1 percent PTT rate. The current pricing range in Metro Vancouver does not get lower than $200,000 which means sellers have to shell out around 2 percent.
Meanwhile, in a report by the Financial Post, Canada Mortgage and Housing Corp. or CMHC has cast a gloomy forecast on the future of the housing market in the country in the next two years. The report they released show a trend that will lead to a lackluster price growth in Canada's real estate market. Bob Dugan, chief economist of CMHC said, "In 2015, increased housing market activity in provinces like Ontario and British Columbia - provinces that have benefitted from declining energy prices, a lower Canadian dollar and continued low mortgage rates - offset slowdowns in oil-producing provinces like Alberta."
