Three changes are being brought in for April 1, 2024, namely:
- The threshold to be eligible for the first-time homebuyers exemption is increased from a fair market value of $500,000 to $835,000, with the first $500,000 fully exempt; between $500,000 and $835,000 PTT is paid on a portion of the value; and above $860,000 the exemption is eliminated.
- The newly built home exemption for purchasers who buy a newly constructed home as their principal residence will increase from $750,000 to $1.1 million in fair market value. Homes with a fair market value of between $1.1 million and $1.15 million will see a partial PTT exemption which will reduce but not eliminate the PTT; homes above $1.15 million will have to pay the PTT.
- A new PTT exemption will be initiated for purchases of qualified purpose-built rental housing properties provided the building contains at least 4 apartment units, be non-stratified, be used as rentals for at least 10 years, and all residential uses of the building must be for rental purposes. This PTT exemption will apply to transactions for such buildings between January 1, 2025 and December 30, 2030. This new policy will work in conjunction with the Federal Government’s elimination of the 5% GST on newly built rental accommodations, and should hopefully incentivize the construction of newly built rental housing which is sorely lacking in our province.
The overall goal with these changes is to improve housing affordability in general, and to increase the availability of new rental housing.
Where is the real estate market going in 2024?
I get asked this question just about every day. It is of course, impossible to know the answer with any certainty. To answer this question I like rely on the views of expert economists. In a recent press release, the British Columbia Real Estate Association (BCREA) predicted that unit sales in the Okanagan area will increase by 7.5% in 2024, with prices to increase by 1.3% to an average of $760,000 in this region. Brendan Ogmundson, chief economist of BCREA stated, “ In 2023, the housing market faced headwinds due to elevated mortgage rates, but the recent decline in fixed mortgage rates and potential Bank of Canada rate cuts present an optimistic outlook for 2024.” He went on to say, “ “As we navigate through 2024, we expect a delicate balance between rising sales and normalizing inventories, which should lead to a relatively quiet year for prices.”