Whereas British Columbia has a housing affordability crisis that is impacting every local government in the province, with the BC government recognizing that local governments are on the front lines of the housing crisis and are positioned to help advance the development of new homes and that communities need solutions that work for them; And whereas local governments that wholly own local government housing corporations as their chosen community solution for creating more affordable housing are subject to the provincial Property Transfer Tax PTT on acquired property, including land donated to the corporation from the local government or land leased for more than 30 years; And whereas the Property Transfer Tax Act provides exemptions to local governments, there are no exemptions applicable to a local government housing corporation, even if the corporation is wholly owned by the local government and carrying out local government purposes: Therefore be it resolved that the UBCM call on the provincial government to expand exemptions for Property Transfer Tax to include wholly owned local government housing corporations for the purposes of building affordable housing; And be it further resolved that land transferred, including long-term leases, from a local government to any non-profit for the purposes of affordable housing development be also exempt.
Ministry of Finance The property transfer tax PTT was designed to have limited exemptions and applies differently to a municipal government, which is exempt, then a local government housing corporation, which is not exempt. The distinction between local governments and their corporations is part of the income tax system and the property tax system as well as the PTT. Tax exemptions must be applied broadly and fairly across taxpayers, while direct support or funding can be directed to specific projects based on their alignment with government objectives and priorities. The PTT administrator is not in the best position to assess the specifics of each housing project to ensure the development is in fact used for affordable housing and that the project meets the governments housing goals e.g., not converted to market-housing or other use at a later date. Generally, government support for particular developments is more efficiently provided through direct funding as opposed to through the tax system. Currently, registered charities are exempt from the PTT when they purchase or receive property that will be used for a charitable purpose. To be eligible for these exemptions, an organization must be registered as a charity with the Canada Revenue Agency. Many non-profit organizations cannot meet these requirements because they are not exclusively created for a charitable purpose. Further, non-profits may be organized for reasons other than charitable purposes, provided they do not operate to generate a profit. Providing an exemption to non-profit organizations, which have varied purposes, would set a difficult precedent for government.