Chart from the April 20 B.C. budget shows sharp dip in real estate sales early in the COVID-19 pandemic and the even steeper climb since late 2020. (B.C. government)

Chart from the April 20 B.C. budget shows sharp dip in real estate sales early in the COVID-19 pandemic and the even steeper climb since late 2020. (B.C. government)

Hot B.C. housing market drives property transfer tax gains

B.C. budget boosts tobacco, sweet drinks, carbon taxes

B.C.’s recovery from the COVID-19 recession of 2020 showed up most dramatically in a $5.5 billion improvement in the provincial deficit reported in the province’s latest budget, after it had been forecast to be $13.6 billion last fall in the depths of the pandemic.

While natural resource income recovered and lumber prices soared, B.C. reaped its most significant gains from strong income taxes and a surge in real estate that neither the province nor its private sector advisory board saw coming.

“This $5.5 billion improvement is mainly thanks to higher revenues, but also somewhat lower spending and improved operating results in government organizations, including ICBC,” Finance Minister Selina Robinson said in her budget presentation April 20.

The budget estimates that property taxes to the province are $2.3 billion for the year ended March 31, rising to nearly $3 billion for 2021-22. Property transfer tax took in $2 billion last fiscal year and is forecast to decline slightly to $1.97 billion in the current year, as the finance ministry forecasts a “moderation in market activity in 2022.”

Monthly home sales reached record levels in late 2020 and have continued to grow in 2021, with high-wage employment “resilient” in the pandemic, low interest rates and demand for larger homes by remote workers, budget documents say.

Real estate sales rose in every B.C. region in 2020, with Greater Vancouver sales up 75 per cent, Okanagan Mainline almost doubling at 94.6 per cent, Fraser Valley up 110 per cent and Greater Victoria sales up 60 per cent.

“Meanwhile, the average home sale price in B.C. increased by 11.6 per cent in 2020 compared to 2019,” the budget documents say. “Strong average sale price growth was observed in most markets in the province. Year-to-date to February 2021, prices were up by 16.5 per cent compared to the same period a year earlier.”

ICBC net revenue is estimated at $709 million for the year just passed, dropping to $154 million next year as major reforms in injury payouts are to take effect.

Provincial tobacco taxes continue to soar effective July 1, rising from 29.5 cents to 32.5 cents on a single cigarette. Provincial sales tax also applies to vaping products as of April 1.

RELATED: B.C. deficits add up to $19 billion in three-year budget

RELATED: B.C. budget offers COVID-19 aid to tourism, hospitality

An exemption of B.C.’s seven per cent sales tax for sweetened carbonated drinks ended April 1, and the province also required foreign streaming services such as Netflix and Disney+ to pay sales tax along with domestic services like CraveTV.

B.C.’s carbon tax increased to 9.96 cents on a litre of gasoline as of April 1, with another increase scheduled for April 2022. In Metro Vancouver, gasoline taxes are now 36.96 cents per litre, including TransLink, motor fuel tax and carbon tax.

Natural gas royalties are forecast to pick up quickly, from $191 million to $286 million this year and $315 million in 2022-23 as B.C.’s first large-scale LNG export project nears completion. Forest revenues and the mineral tax on coal mines are rising, with a 14 per cent increase estimated for this year. That is expected to fall 6.1 per cent in 2022-23, based mostly on lumber prices declining from current high levels.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

2021 B.C. BudgetBC politics

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Accused drug trafficker to plead to federal, provincial charges in June

Matthew Straume said he’d missed his last court date because he was ill

A woman wears a face mask and shield to curb the spread of COVID-19 while walking in North Vancouver, B.C., on Wednesday, January 6, 2021. THE CANADIAN PRESS/Darryl Dyck
57 new cases of COVID-19 in Interior Health region

Thirty people in the region are in hospital, 16 of whom are in intensive care

Rossland City Council issued a press release critical of Mayor Kathy Moore's travel to the U.S.
Rossland council addresses issue of mayor’s travel to U.S.

Prior to her trip, some councillors and staff expressed deep concerns about her plans

Photo: Laurie Tritschler
Grand Forks sex crimes trial adjourned until summer

The trial was set to begin at the city courthouse Wednesday, May 5

Photo: Kathleen Saylors
Grand Forks city council votes down motion to support Penticton in paramountcy battle

Coun. Neil Krog insisted Penticton’s issue with Victoria is about city bylaws, not homelessness

Four homes in Johnson Flats were at serious risk of falling into a neighbourhood section of the Kettle River, according to capital project manager Justin Dinsdale. Photo: Laurie Tritschler
Grand Forks shields riverside homes against erosion

Crews have built a modified dike along a section of the Kettle River in Johnson Flats

B.C.’s provincial health officer, Dr. Bonnie Henry. THE CANADIAN PRESS/Jonathan Hayward
Dip in COVID-19 cases with 572 newly announced in B.C.

No new deaths have been reported but hospitalized patients are up to 481, with 161 being treated in intensive care

Solar panels on a parking garage at the University of B.C. will be used to separate water into oxygen and hydrogen, the latter captured to supply a vehicle filling station. (UBC video)
UBC parkade project to use solar energy for hydrogen vehicles

Demonstration project gets $5.6M in low-carbon fuel credits

FILE – A student arrives at school as teachers dressed in red participate in a solidarity march to raise awareness about cases of COVID-19 at Ecole Woodward Hill Elementary School, in Surrey, B.C., on Tuesday, February 23, 2021. THE CANADIAN PRESS/Darryl Dyck
B.C. ‘should be able to’ offer 1st dose of COVID vaccine to kids 12+ by end of June: Henry

Health Canada authorized the vaccine for younger teens this morning

A woman in the Harrison Mills area was attacked by a cougar on Tuesday, May 4. B.C. Conservation Officers killed two male cougars in the area; the attack was determined to be predatory in nature. (File photo)
2 cougars killed following attack on woman in Agassiz area

Attack victim remains in hospital in stable condition

A woman wears a face mask and shield to curb the spread of COVID-19 while walking in North Vancouver, B.C., on Wednesday, January 6, 2021. THE CANADIAN PRESS/Darryl Dyck
B.C. CDC updates info, acknowledging small respiratory droplets can spread COVID-19

Large droplets, not aerosols had been fixture of public health messaging for many months

A picture of Shirley Ann Soosay was rendered from a postmortem photographer and circulated on social media. (DDP graphic)
B.C. genealogist key to naming murder victim in decades-old California cold case

In July 1980, Shirley Ann Soosay was raped and stabbed to death

Mary Kitagawa was born on Salt Spring Island and was seven years old when she was interned along with 22,000 B.C. residents in 1942. (B.C. government video)
B.C. funds health services for survivors of Japanese internment

Seniors describe legacy of World War II displacement

Most Read