top of page
  • Melissa Valana


Homeownership is a dream for most Canadians however, for many young adults in the LowerMainland it may remain just that – a dream.

Over the past two years, the housing market in British Columbia has been red hot, driving realestate prices to unprecedented heights, with condo prices now averaging $714,000 in GreaterVancouver.

While home prices have retreated somewhat over the past few months, they stubbornly remain23% higher than pre-pandemic prices.

While a small number of first-time home buyers were able to take advantage of the low interestrates during the pandemic, many were barred from entering the housing market because of theadditional funds required to pay Property Transfer Tax (“PTT”), a provincial government cashgrab which was brought into law by former premier Bill Vander Zalm in 1987. The tax originallyhad an upper limit of 2% on property values over $200,000, but since then that limit hasincreased to 3% on values over $2M and 5% on values over $3M. Said tax now generatesupwards of 3 billion dollars annually for the BC government.

To alleviate the situation of high closing costs for first time buyers, the government created anexemption threshold under which no PTT would be payable.

Currently, the First-time Home Buyer exemption from PTT tax has a threshold limit of $500,000(with a partial exemption up to $525,000). That is not a misprint. It is a mere $500,000. Howmany habitable properties in the Lower Mainland can you find with a price tag of $500,000 orless? Not many! This threshold may be reasonable in the interior and more rural areas of B.C.,but for the Lower Mainland it is not realistic. However, as most people in this province live inthe Lower Mainland and the Greater Victoria area, it makes sense for the government to have alow exemption threshold in the higher property value areas to maximize its tax revenue.

We act on many real estate transactions and in the last two years only three of our clients havebeen able to claim the First-time Home Buyer exemption with these transactions occurringoutside the Lower Mainland or on leasehold strata properties.

During the spring of last year, we sent a letter to David Eby and Selina Robinson (both of whomwere responsible for housing related matters at the time) asking when the B.C. governmentintended to raise the First-time Home Buyer’s exemption threshold. The Office of the Minister ofFinance responded that:

“….raising the First Time Home Buyers’ program exemption would put additional demandpressure on the housing market, raising prices, and providing most of the benefit tothe seller in the way of increased prices. … The First Time Home Buyers’ programexemption threshold is not intended to benefit all first-time home buyers, but ratherprovide support for those entering the market in lower-cost homes.” (italics mine)The last time the First-time Home Buyer exemption threshold was raised was in 2017, howeverwith this government’s illogical reasoning, it may never be raised again for fear of “puttingdemand pressure on the housing market and raising prices.”

With a threshold limit of $500,000 and no efforts being made by the B.C. government to raisethe limit in the Lower Mainland, it is clear that the B.C government has no desire to assist first-time home buyers to get into the market.

Interestingly, while the government continues to assert its “concern” for housing affordability, it remains the primary tax beneficiary of the current exorbitant housing prices in the Lower Mainland. If the government was genuine in is concern for affordability, it would take steps to increase the limit for the First-time Home Buyer’s exemption to at least $750,000.00 (which is the exemption limit for any purchaser acquiring a newly built property from a developer in which they intend to reside). Given that the government isn’t even considering this as an option, it’s alleged aim of creating more housing affordability is no more than empty virtue signaling.

With the rising interest rates, sky high inflation, and ever-increasing taxes, most young couples trying to enter the real estate market are more or less stymied unless they receive help from the Bank of Mom and Dad or happen to receive an inheritance.

Increasing the threshold limit for the PTT exemption to $750,000 on a home purchase would be a significant step towards increasing housing affordability for young adults in B.C. and it may encourage more young people to remain in BC, rather than seeking greener (and less expensive) pastures in other provinces.

Author: Melissa Valana

For questions about PTT, the First-time Home Buyer exemption, or any other matter concerning real estate, please call Melissa Valana or Kenneth Pazder at 604-682-1509.

© 2023 Pazder Law Corporation

DISCLAIMER: This is not legal advice, but merely information for our readers. Always consult alegal professional when making decisions concerning PTT or any other matter concerning thepurchase or sale of real property.



bottom of page