B.C. posts $730 million surplus, housing revenues continue to fill coffers

VICTORIA — British Columbia’s thriving real estate market has helped the provincial government post a budget surplus of more than double the original forecast, Finance Minister Mike de Jong said Thursday.

The final public accounting for the fiscal year that ended March 31 reveals a surplus budget of $730 million and economic growth of three per cent, well above the Canadian average, he said. De Jong had forecast a surplus of $284 million in last February’s budget.

Revenues increased by $1.5 billion over the year, due primarily to increases in federal contributions and personal income and corporate taxes, but the largest percentage increase was in property transfer taxes, which the government charges on residential and commercial real estate deals, the minister said.

“This is clearly a significant part of the budget and has generated significant revenue, but the economy is performing well almost across the fold,” de Jong said.

The public accounts show property transfer tax revenues grew by $468 million over last year, a jump of 43.9 per cent. The report stated the province received $1.5 billion in property transfer tax revenues in 2015-2016, up from $1 billion in 2015-15.

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De Jong indicated property transfer tax revenues have continued to increase since last March and a further financial update will be made in September.

“It’s clear that property transfer tax revenues are up,” he said during a news conference. “It is clear from the report I have just given you, I have indicated that the trend is continuing.”

The Liberals have recalled the legislature next week to deal with housing and real estate troubles that have been plaguing some parts of the province.

B.C. politicians will debate legislation that would allow the city of Vancouver to impose a vacancy tax in an effort to increase the availability of rental properties. Vancouver’s vacancy rate is below one per cent and the average price for detached homes is above $2 million and rising in some neighbourhoods.

De Jong said the property transfer tax revenues are providing the government with increased spending options, but he didn’t make any program announcements.

“I do think we need to be cautious about making assumptions that these levels of returns will continue in perpetuity,” he said. “I don’t think they will.”

De Jong said he believes building more homes as opposed to taxing existing properties is the way through the current crunch.

“Let us not make the mistake of assuming governments are going to tax our way out of the challenges for people owning a home,” he said. “Let’s give them something to buy.”

British Columbia’s real estate market is of enormous economic value to the province, with the Finance Ministry reporting the total value of commercial and residential real estate sold in 2015-2016 at $93.67 billion.

Dirk Meissner, The Canadian Press