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Homeowner threshold could move with house prices

Last Updated Jan 10, 2017 at 2:10 pm PST

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Summary

One group says the move won't be enough to get more people into the market

Provincial government raises threshold from $1.2 million to $1.6 million

VANCOUVER (NEWS 1130) – Increasing the homeowner grant threshold to include homes worth up to $1.6 million doesn’t address the speculation driving our market, argues an affordable housing advocate with the group Housing Action for Local Taxpayers.

As expected the provincial government announced changes to the homeowner grant. The finance minister saying the threshold increase will help keep property taxes affordable.

“This is a 33 per cent increase over last year,” says Mike de Jong. “We are doing our part to help keep housing costs affordable for families. Local governments can also work to keep property taxes at a manageable level for residents by controlling their spending and reigning in the amount of revenue they need to operate.”

However, you should be prepared for the grant threshold to change again next year and it could actually be reduced. That’s the word from the finance minister who adds it depends on what happens in the market. “I think the process will be very similar to what you see in past year. Historically, between 90 and 94 per cent of homes have qualified for the homeowner grant and I don’t see that range changing. So, we’ll see what the values show.”

He was also asked why each region isn’t looked at individually to set rates, to which he responded, “this is a provincial program.”

The provincial government says it’s projected to spend $821 million on these grants in 2017-18, compared to about $809 million in 2016-17.

Ensuring more locals who are struggling to make ends meet, even if they do own property, get the $570 isn’t a problem for Justin Fung with HALT.

“It certainly helps people in working class environments whose homes have suddenly gone up 30 or 40 per cent in the past year,” explains Fung. “I think it’s the right thing to do for current homeowners who would be put in a pretty tough position, but I think you have to look at why we’re doing this and why do we need to set the homeowner grant at $1.6 million when you clearly have an issue of foreign money having driven or fuelled a lot of the growth in home prices. On one hand it’s great for people who already own their homes. On the other hand, this is yet another tax break for people who ultimately own an asset that’s gone up pretty significantly over the past year.”

He wants more done to curb foreign speculation. “The home prices are out of tune, out of whack with income levels here in Vancouver,” adds Fung. “Whether that’s higher paying jobs in Vancouver, or home prices actually coming down. HALT’s view has always been that it’s been the speculative nature of real estate in the Lower Mainland that has really caused a lot of the issues that we’ve seen here, and a lot of that speculation being fuelled by foreign money.

As for what he’d do, Fung likes the proposal from several local academics who have pushed for an annual surcharge on property owners who don’t pay Canadian income tax.