New housing relief measures introduced by the province recently likely won’t bring any relief to the housing market in the Greater Trail region, says a local real estate agent.
Fred Behrens of Coldwell Banker said the housing relief measures brought in April 1 largely apply to newly constructed homes in the $525,000 to $850,000 range.
He said the incentives announced by the government touch on a wide spectrum of people, from first time buyers, new home construction, existing homeowners who plan to purchase vacation homes, and seniors who want to retrofit their homes.
The measures are to stimulate the economy through new construction and substantial renovations, in most cases primary residences (except vacation homes).
The changes include an increase to the new housing HST rebate threshold to $850,000. That means British Columbians buying a new home as a primary residence are eligible for a rebate of the provincial portion of HST up to $42,500, based on this higher threshold. More than 90 per cent of newly built homes are below this threshold.
“The devil is always in the details, though,” Behrens said. “In our area, there are not that many newly constructed homes being built in (that) range, so it probably won’t have a big effect. But an increase to the upper limit can’t hurt.”
As well, the purchase of a newly built secondary vacation home up to $850,000 — built outside of the greater Vancouver/capital area — has to have all of the HST paid up front. But people need to apply and qualify for the grant directly from the B.C. Ministry of Finance afterwards.
A new B.C. Seniors’ Home Renovation Tax Credit of up to $1,000 annually — giving back 10 per cent of an expenditure — is available to help with the cost of permanent home renovations that provide people aged 65 and over with increased independence.
“It is better than nothing but I don’t think that will be a determining factor for most seniors to make the decision to renovate their home,” said Behrens. “A more significant rebate in the 30 per cent range would make a bigger difference.”
He said people need to spend the money up front before receiving a tax credit.
“Either you have the money or you don’t,” he said.
A bonus of up to $1,000 for first-time buyers of newly built homes was also announced.
This refundable tax credit comes with a lot of stipulations including eligibility, said Behrens. Most first time homebuyers in Greater Trail don’t build new homes because they are not priced at entry-level affordability.
“If the government really wanted to stimulate the new housing starts they might want to reconsider the eligibility standards,” he said.
Behrens felt many of the announced provisions were only transitional while the province prepares to release new PST/GST rules.
For more information on these new measures, please visit: www.gov.bc.ca/fin/ and www.pstinbc.ca.