What exactly Premier Christy Clark will announce tomorrow is still a mystery, but according to a Tweet this evening, something is in the works to “help first time homebuyers.”
But with the market still tight, UBC Economist Tom Davidoff says any tax credit for first-time buyers is a mistake.
“If you have a unit with two or three first-time buyers bidding on the same unit, this will just cause one to out-spend the other by the amount of the subsidy – so more benefit to the condo seller than the buyer.”
Davidoff says giving would-be first-time buyers more incentive to get into the market, isn’t the answer.
“The answer is tax reform and help getting more supply consistently to the market,” he says.
“Generally speaking, when you have too much demand chasing not enough supply, adding fuel to the demand fire is not the best way to proceed.”
Christy Clark’s counterpart in Ontario Kathleen Wynne recently announced a first-time home buyers land transfer tax rebate of up to $4,000 – a move Davidoff also called a mistake.