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Nearly 39% of resident Vancouver home owners can’t get BC home owner grant

September 26, 2014

Before we go and build all new municipal tax structures to discourage absentee home owners,I decided to have a look at British Columbia’s existing tax credit for live-in home owners. It has a solid foundation but it’s way too small.

I just don’t know enough about these things to say whether it’s worth renovating or if it should just be replaced.

Touting a new tax surcharge absent a better idea

The media is full of absentee property owners even if the thousands of Vancouver homes and condos they own sit empty.

This is largely thanks to COPE Mayoral candidate Meena Wong, who has proposed adding a surcharge onto the Vancouver property taxes paid by absentee homeowners.

According to candidate Wong, absentee owners could either avoid the surcharge by renting out their unlived-in investment properties or they could pay the surcharge and thereby help the city fund new affordable housing.

After I blogged a critique of the absentee owner surcharge, a commenter described the provincial home owner grant as an existing mechanism designed to encourage people to live in the property they own.

I would favour a tax or surcharge that was province-wide rather than see municipalities create a patchwork of different surcharges.

What about this home owner grant?

British Columbia home owners can claim the home owner grant for their principal residence each year. The basic grant for home owners under the age of 65 is $570 and goes up to $770 if you live in a northern or rural area of B.C.

For 2014, the basic grant is reduced at a rate of $5.00 for each $1,000 of assessed value over $1,100,000. And the basic grant is eliminated when the assessed value reaches $1,214,000.

There is a higher grant amount available to seniors, veterans, people with disabilities or people living with people with disabilities.

The higher grant is eliminated when the assessed value reaches $1,269,000.

The CBC reported that in January of this year detached homes in Vancouver were selling on average for $929,700.

I was curious, given how close that was to the home owner grant cutoffs, just how many homes might not be covered in Vancouver’s overheated real estate market.

Whole HOG? Vancouver can barely go 61 percent HOG

This morning a DBMS wrangler at BC Assessment was nice enough to take the time and help me figure out how many Vancouver homes might fall outside the threshold of the provincial homeowner grant.

On the 2014 assessment rolls he found 80,233 Class 01 residential and single family dwellings in the City of Vancouver, aka “Jurisdiction 200”. He cautioned that the total might miss a few duplex type properties.

Of those 80,233 homes, nearly 40 percent were too valuable for the owners to qualify for a homeowner grant.

  •  30,990 or 38.6 percent of the total are assessed at or over the $1,214,000 cutoff for the basic grant.
  • 29,266 or 36.4 percent of the total are assessed at or over $1,269,000 cutoff for the extra grant.

I don’t know if the cutoff is regularly adjusted or if it has been fixed since the HOG was introduced but I think the cutoff is too close to the median assessed value. I think it means the HOG doesn’t apply to enough properties in the Vancouver real estate market to have any significant effect on absentee ownership.

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