Published On: Wednesday, 07 August 2019
Governments Lose Millions As Okanagan Homes Sales Fall
CHBA Central Okanagan Launches Public Awareness Campaign On Housing Affordability
KELOWNA – The Canadian Home Builders’ Associations of the Central Okanagan and the Federal CHBA in advance of the upcoming federal election have launched a public awareness campaign on Housing Affordability.
The CHBA has launched a new website aimed at voters concerned about homeownership. The site, www.affordability.ca, summaries factors impacting affordability and informs voters and media on the issues. As party platforms become available, policies that affect housing will be summarized and explained through the affordability lens. CHBA is planning a multi-faceted federal election campaign to drive traffic to the website to inform voters, candidates, and media about the issues.
“Housing Affordability is an issue we hear about often and it’s a top concern of all Canadians,” says Cassidy deVeer, president, Canadian Home Builders Association Central Okanagan (CHBA-CO). “When buyers hear their homes include more than $94,000 in tax you get their attention quickly.”
A recent report, commissioned by the BC Chapter of the CHBA, completed in 2019 and not released publicly until now, reveals that one new house built and sold in the Central Okanagan raises more than 94,000 in revenues split by three Governments. *
The report, “Estimating the Benefits to Government of New Home Construction” produced by charter accountancy and business advisory firm MNP, studied how the building of a new home is affected by development fees and charges in nine communities across BC. The report also details the tax revenue raised on the construction of a townhome and is available here.
The report looked at both fees and taxes directly levied on the construction and sale of new homes and additional revenues generated through income taxes and taxes on the construction materials. Additional revenues were income tax paid by those employed in building homes and Provincial sales taxes generated from the purchase of materials. This report did not take into account the current Energy Step Code charges.
Note: Table 7 (from the MNP report) summarizes revenues from construction of a single-family home for each level of government. Total government revenues from construction of a single-family home range from approximately $42,000 in Cranbrook to over $150,000 in Surrey. Provincial revenues account for approximately 25 percent of total revenues in most communities. Municipal revenues vary widely and account for between 13 percent of total revenues and 32 percent of total government revenues. Federal revenue from GST accounts for between approximately 40 percent and 60 percent of total government revenues.
deVeer continues, “When discussing housing affordability, its important people know how much of the cost of a home is tax. Obviously, Governments need revenue and we are certainly not advocating there shouldn’t be any tax but tackling housing affordability will require Government and Industry to work together.”
“There is a ripple effect when sales and new homes are postponed or cancelled. It’s not just the home builders but all those who service and supply the industry. A flooring supplier representative told me yesterday that his residential sales are way down. Based on this report, we can see there is a direct impact on government revenues as well.”
The Okanagan Mainline Real Estate Board reported in July that year to date sales in the Central Okanagan for the period ending June 2019 there were 2357 homes sold compared to 2772 homes sold during the same period.
Across the Province, The British Columbia Real Estate Association (BCREA) reported that a total of 6,960 residential unit sales were recorded in June, a decline of 11.8 per cent from the same month last year. The average MLS residential price in the province was $687,584, a decline of 4 per cent from June 2018. Total sales dollar volume was $4.8 billion, a 15.3 per cent decline from the same month last year.