February 16, 2016

BC Budget 2016 – the impact on you and your clients

The BC government introduced its 2016 budget today. The budget included a number of items intended to affect affordability and availability in the Lower Mainland’s housing market. 

Here’s a summary:

Property Transfer Tax (PTT)

• a New Housing exemption will apply to newly built homes or newly subdivided units priced up to $750,000, saving buyers up to $13,000; and

• a partial exemption will apply on newly built homes priced $750,000 to $800,000.

• a new 3% PTT rate will apply to the portion of a home sale that exceeds $2 million. For homes that sell for below $2 million, the PTT will continue to apply at a rate of 1% on the first $200,000 and 2% on the balance. 

These changes will take effect on February 17, 2016. 

 “While we applaud the government’s efforts to improve affordability for home buyers purchasing new housing, there’s more work to be done, including indexing PTT thresholds to keep pace with changes in home prices over time,” Darcy McLeod, Board president said. 

Data collection

Starting this summer, individuals and corporations buying property must disclose if they are Canadian citizens or permanent residents of Canada and if neither, their home country. These changes will provide information on the volume of foreign investment in BC. 

Your Board supports this change. We advocated for this initiative in a letter to the Finance Minister earlier this year. 

Home Owner Grant

The Home Owner Grant threshold will increase to $1.2 million from $1.1 million for the 2016 tax year.

Affordable housing

The province will invest $355 million to help the BC Housing Management Commission support more than 2,000 affordable housing units for residents with low-to-moderate incomes. 

Watch for more information on today’s budget in next week’s edition of our REALTOR® News.

Additional government resources:

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OTTAWA - New federal rules for Canadian mortgages have now gone into effect.

The changes affect properties that cost more than $500,000 — a small percentage of the overall market.

Buyers can still have a five per cent down payment on the first $500,000 of a home purchase but must now put at least 10 per cent down on the portion above $500,000.

Finance Minister Bill Morneau has said the new measure — effective Monday — aims to ensure buyers have sufficient equity in their homes.

Lenders also face new capital requirements to keep pace with the growing risk of the real estate markets that they bankroll.

And Canada Mortgage and Housing Corp. will change the fees it charges issuers of mortgage-backed securities.

The Finance Department has tightened mortgage rules on several occasions in recent years — along with requiring stricter enforcement and management of loans — to weed out marginal

 

Sourece: Yahoo

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