In the provincial and federal budgets of February 2008, two major issues affecting the real estate industry were announced.
First-time home buyers can now take advantage of the Property Transfer Tax (PTT) exemption up to a threshold purchase price of $425,000 instead of the old ceiling of $375,000. On purchases between $425,000 and $450,000, a proportional exemption may be claimed if you meet certain criteria. Furthermore, first-time buyers can now pay down their mortgages by any amount in the first year of ownership without being disqualified from the exemption. Gone are the PTT financing rules that required buyers to have at least a 70% mortgage and registered financing to qualify for the exemption.
Current home owners can take advantage of incentives to make their homes more energy efficient through conservation retrofits and PST rebates to those who upgrade to ENERGY STAR qualified appliances. Also, the threshold for the phase-out of the Home Owner Grant increased to $1,050,000 of assessed value from $950,000, ensuring that more than 95% of home owners remain eligible for the full home owner grant.
As far as market forcasts for this year, Cameron Muir, BCREA Chief Economist says that home sales likely won't post any records this year. However, the number of transactions is expected to be above the ten-year average. Home prices still face upward pressure, but that pressure is waning. After six years of a bull real estate market, a return to more balance between demand and supply may be the best scenario for the long term.