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Some home buyers benefit but not in Richmond

Vancouver Sun / Richmond News, February 19, 2016

If you are a first-time buyer and you are buying an existing home, you are out of luck — you must still pay the transfer taxes on all sales over $475,000.

But if first-time buyers want to buy a newly built house, the thresholds to avoid paying the transfer tax have now been increased to $750,000 (for a full exemption) and $800,000 (partial exemption).

The catch is, there are almost no new single family homes in Richmond under $800,000. It’s impossible to know what homes will cost in the future, but housing assessments for 2015 give us a snapshot of what homes are worth in various regions of the province.

Landcor Data Corp., a Vancouver analytics firm, crunched the numbers to reveal where there are many or just a few existing homes assessed under this price point.

In cities such as Richmond, Burnaby and North Vancouver, a majority of condos and townhouses are priced under $800,000, but only a fraction of detached houses.

In Metro Vancouver, the tax change should mostly help people who want to live in Delta, Surrey or Langley, where all condos and townhouses, and three-quarters of detached houses, are below $800,000.

In New Westminster, nearly all condos and townhouses fall below this threshold, but only half of detached homes.

In Vancouver, virtually none of the detached homes were valued under $800,000, but you could buy half the townhouses and almost all the condos for that amount. The situation was worse in West Vancouver, where no detached homes and only nine per cent of townhouses were below $800,000, and only half the condos fell below this benchmark.

In nearly all rural towns — including Armstrong, Courtenay, Cranbrook and Castlegar — and many semi-rural cities — such as Abbotsford, Chilliwack, Maple Ridge, Hope, Kamloops, Campbell River, Nanaimo and Mission — almost all detached houses, attached houses and condominiums are assessed at under $800,000.

The government will fund the drop in transfer tax revenue by adding a new luxury tax of three per cent to all homes sold for more than $2 million.

Where will this most affect people? Not surprisingly, in Vancouver (23,042 detached houses valued at more than $2 million) and in West Vancouver (7,290 houses).

The next group of cities with the highest percentage of houses over $2 million are: Richmond, North Vancouver, White Rock Belcarra, Whistler, Anmore and Lions Bay.