A relatively small share of a $2 billion tax could help battle homelessness and build affordable housing, according to the Township of Langley.
Township mayor Jack Froese was pleased that delegates to the recent Union of B.C. Municipalities (UBCM) convention in Vancouver endorsed the Township proposal to re-direct a percentage of the money generated by the Provincial Property Transfer Tax (PTT).
“Certainly it’s a funding source that can be used,” said Froese.
Introduced in 1987 by Social Credit premier Bill Vander Zalm in a bid to quell speculation in the housing market, the tax is applied whenever someone makes changes to a property’s title.
The PTT rate is one per cent on the first $200,000 of a property’s fair market value, two per cent between $200,000 and up to and including $2 million and three per cent on the portion of fair market value over $2 million.
For example, if the value of a property is $450,000, the PTT would be $7,000.
As well, someone who is considered a foreign entity or taxable trustee transferring a residential property in Metro Vancouver will pay an additional 15 per cent.
As house prices climb, revenue from the tax has risen, and the province is expected to collect just over $2 billion this year, up $1 billion from 2015.
The Township preamble to the UBCM motion noted that between the 2014-15 and 2015-16 fiscal year, revenue from the PTT has risen by 44 per cent and it is expected to increase by more than 50 per cent over the next fiscal year ending in 2107.
Rather than put all the money into general revenue, the Township said, the province could divert 20 per cent a year into a pooled fund to be administered by the UBCM to address homelessness and affordable housing.
The Langley motion noted that homelessness throughout B.C. has “increased exponentially in the past decade and most particularly in recent years, based on anecdotal and empirical information derived from the Regional Homelessness Count across Metro Vancouver and across the province as a whole.”
The result has been “a growing financial and social burden” on local governments who do not have the authority to provide affordable housing and deal with homelessness issues but must “spend inordinate and extraordinary resources” to deal with an ever-worsening problem, the motion said.
A report by the UBCM Resolutions Committee on the Township proposal noted that the membership has consistently endorsed resolutions to have a portion of revenues from the Property Transfer Tax used to address issues of homelessness and housing affordability in 2011, 2008, 2007, 2006 and 2004.
The last attempt at convincing the province to use money from the property tax to create regional housing trust funds to provide subsidized housing was rejected by the then-Liberal provincial government, which replied by saying any “proposed transfer of tax revenue to local governments must be evaluated in the context of the province’s need to fund essential services.”
Tax revenues can fluctuate, the province said, and may not always meet the funding needs of specific programs.
The UBCM was formed in 1905 to provide “a common voice for local government in British Columbia.”
It speaks for 189 local governments and seven First Nations.