Tuesday’s B.C. Budget reveal saw an adjustment to the province’s first-time home buyers program.
The B.C. Home Owner Mortgage and Equity Partnership program offers a 25-year loan that’s interest-free and payment-free for the first five years.
Up until now, buyers could save up to $7,500 on a $475,000 home, but now they’ll be eligible to save as much as $8,000 of the property transfer tax on a home valued up to $500,000.
A UBC business school professor thinks the provincial government’s move won’t solve Vancouver’s housing problem.
Tom Davidoff says a lot of land is restricted to single-family houses and the provincial government needs to tell municipalities to change zoning restrictions.
“We’re supply constrained around Vancouver. So when you throw money at people to buy a home, that encourages them to pay more for the home. And with multiple bidders on every home, you get higher prices. So you’re essentially handing homeowners cash paid for by taxpayers.”
Davidoff says a tax cut and offering more money to low-income people would serve as better options in Metro Vancouver’s housing crunch.
“If you give somebody the market price in cash, they presumably prefer to live somewhere maybe a worse commute away but have more money for things like groceries and clothes.”
The B.C. Liberals have previously announced they’re supporting the development of 5,300 units of affordable and supportive housing.