Homebuyers in Metro Vancouver may be opting to leaving the region rather than face the combination of high home prices and the high taxes that come with those homes.
That’s according to a new report from Re/Max Canada, which concludes the tax burden weighs heaviest on buyers in areas such as the City of Vancouver, where the average price for a detached home was $1,942,400 as of January.
“Given today’s housing market realities, it comes as no surprise that buyers are willing to travel across the country to achieve home ownership,” said Re/Max Canada president Christopher Alexander in the report.
“In addition to affordable housing values and extensive job opportunities, Alberta is well known for its position on taxation, with no provincial sales tax and zero land transfer tax on residential real estate. Cash-rich buyers from provinces such as Ontario and British Columbia are aware that the sale of their property in Toronto or Vancouver will stretch that much further in Alberta or Atlantic Canada’s major centres.”
There were 12,552 people who came to B.C. from other provinces in the first three quarters of last year, compared to 17,186 who left B.C. during that time. This resulted in a loss of 4,634 people, according to Statistics Canada.
“Years ago, the trend had been to move to the Okanagan to take advantage of lower prices, but in recent years, strong migration levels have accelerated housing values in cities such as Kelowna, Kamloops and Penticton,” said the report.
Navigating taxes, fees and levies is the “cost of the doing business” as a homebuyer in Vancouver.
The report highlights that the first-time buyer’s rebate is “inadequate” in Vancouver’s high-cost market, referencing the provincial program aimed at reducing or eliminating the amount of property transfer tax new homebuyers pay.
“Few first-time buyers qualify at the current $525,000 threshold. Properties up to $499,999 are eligible for a full tax exemption while properties priced from $500,000 to $524,999 are eligible for partial repayment. There are currently 43 properties listed for sale under $525,000 in the City of Vancouver,” said the report.
More than one in four Canadians (28 per cent) said the land transfer tax has impacted their decision to participate in the housing market, according to a survey conducted by Leger on behalf of the real estate company in mid-2023.
In addition, 40 per cent of gen Z and 35 per cent of millennials surveyed said that the land transfer tax has played a role in their “pursuit of home ownership.”
