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The 2024 Budget unveiled by the BC Government introduces significant changes aimed at addressing housing affordability and availability issues in the province.  Here’s a breakdown of the key updates: Client First Mortgage Solutions Housing Budget

Property Transfer Tax (PTT) Framework Enhancements.

First-Time Homebuyer (FTHB) Exemption:

  • Currently the FTHB full exemption applies to properties with a Fair Market Value(FMV) of less than $500,000 with a partial exemption for properties with a FMV of $500,000 to $525,000.
  • As of 1st April 2024, the FTHB exemption will apply to properties in a different way.  For properties with a FMV of less than $835,000, PTT is not payable on the first $500,000, but payable on the difference between the FMV and $500,000.  For example, if the FMV of the property is $700,000, PTT paid would be 2% of $200,000 ($700,000 less $500,000).  Not paying PTT on the first $500,000 saves the purchaser a total of $8,000.
  • It appears that a property will qualify for the FTHB or Newly Built Home Buyers exemption so long as the fair market value of the property does not exceed $835,000 and $1,100,000, effective April 1, 2024.

Increase the FMV Threshold for the Newly Built Home Exemption

Effective April 1st, 2024, the FMV threshold to claim the Newly Built Home Exemption, will be increased from $750,000 to $1,100,000.  A partial exemption is also available for properties with a FMV just above the threshold.  The phase out range is $50,000 above the threshold, so properties with a FMV of greater than $1,150,000 will not be able to claim the Newly Built Home Exemption.

Purpose-Built Rental Exemption 

The 2023 Budget included a limited exemption for purpose built rental buildings, that may limit the tax payable on values over $3,000,000.  Budget 2024 builds on this exemption and provides an exemption from the PTT on purchases of new qualifying purpose-built rental buildings.

BC Home Flipping Tax

  • A new Tax targeting home flipping activity and short-term speculation, will basically begin on January  1, 2025.  This tax will apply on the sale of residential property held by an owner for less than 2 years, with the seller being taxed up to 20% of the income from the sales.  To specify, properties sold within 1 year, are taxed at 20%, and will decline to zero between 366 and 730 days.  Exemptions may apply in certain circumstances.

Bc Build initiative

$198 million in funding supports the development of affordable housing for middle-income families, utilizing underused land and offering low-cost financing.

Throne Speech Highlights

  • Commitment to delivering more middle-class homes swiftly, aiding working families and supporting small businesses.
  • Plans for legislation prioritizing investments in crucial services and increasing housing delivery
  • $2 billion financing from the Government of Canada bolsters the BC Builds initiative, aiming to expedite housing delivery and ensure affordability.

These measures underscore the government’s dedication to tackling housing challenges, promising relief for First Time Homebuyers, renters and middle-income households.  As these policies take effect, they are expected to contribute significantly to addressing the housing needs of BC communities.

For more information on Housing Measures

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