A commentary by a Victoria resident.
Due to rising interest rates, which the Bank of Canada says is designed to make things in Canada cheaper (twisted logic where it makes things more expensive so no one can buy them, thus lowering inflation), I am being financially encouraged to sell my house and try to buy a condominium apartment because I can no longer afford to pay my loan, have a life, and keep the property and the suite it contains in a manner that it deserves.
The process of doing so has exposed me to a set of contradictory and confusing actions by government.
Firstly, the provincial government has denied me the right to bring my rental suite rent up to near-market rates, since I have for years been able to rent to students at below market rates.
This is now an untenable situation; my costs have risen dramatically and my income is substantially the same. But I cannot raise the rent charged.
The new owner will no doubt need to charge market rates, which are substantially higher than what I would charge. Ergo, Premier David Eby has legislated high rents for students.
Secondly, the Property Transfer Tax which I will have to pay on my next home will be around $18,000.
For the life of me, I cannot reconcile the government’s loud and constant railing against the lack of affordable housing with this punitive acquisition tax being shouldered by the purchasers of any home.
The ceiling for rebate is so low as to be totally useless, meaning there is no rebate at all in Greater Victoria, 91原创, or Kelowna.
Among other indignities, this tax positively encourages people to not sell their homes and acquire another in B.C. Ergo, low market inventory.
Thirdly, if I were to buy, or attempt to buy, a new home (because the older homes in well-established areas of the Capital Regional District are too expensive), I would have to pay five per cent GST to the feds, who are also wondering how they can make housing more affordable.
Gee! I wonder how they could manage that? You get a rebate if the purchase price is $350,000 or less. Anyone here see a house for $350K?
Please note that all these taxes and fees must come from the same shallow pool of cash that the purchasers have to pay in addition to the down payment and cannot be amortized in a mortgage.
The ability of young millennials to purchase their home, starting with a modest condominium, in Victoria is crucial to the economic and social health of our city.
We need them to be able to buy a home and stay and work here. Governments at all three levels have actively frustrated the attainment of this goal by imposing ruinous taxes (some of which are simply windfall tax grabs like the PTT and GST). Moneys that disappear into this cavernous void are never seen again in a value for dollar sense.
So, what does this mean? On a condominium of, say, $600,000, you require a down payment of $35,000 plus about $2,000 in legal and closing costs.
Not impossible for a young couple. However, we now add the purchase taxes: $10,000 in Property Transfer Tax and $30,000 in GST if it is a new building, and this young couple now has to raise $77,000 in cash, not $37,000.
All this comes from money saved for the down payment.
New housing stock will take years, if not decades, to materialize, given the long (government) approval times, scarce skilled labour, materiel shortages, and so on. But, Eby could, with the stroke of a pen, make it easier for millennials to purchase a home; simply cancel the Property Purchase Tax. Similarly, Prime Minister Justin Trudeau could do the same thing by eliminating the GST on all housing.
But, they won’t.
If you are looking for someone to blame for the high cost of housing in this land, look no further than your governments.
Far more than any other source of the problem, they are the ones responsible for this housing unaffordability crisis.
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