The government has long said it wants to create affordable housing for its citizens and has historically pushed developers and the communities they govern to design or ownership alternatives for it to approve. Those include co-op housing, leasehold land, income verified property and many other forms of “affordable ownership”. To be real, these do nothing but stigmatize property, they don’t allot the same rights and privilege as those with a fee simple interest but rather dilute ownership under the guise of affordability.
The government has never suggested that it lower its own development or building related permit fees - a cost that gets indirectly passed onto the consumer with each project that gets built. A new report by CMHC has concluded that the government is responsible for at least 24% of the average home cost BEFORE you consider property transfer tax or GST. Add those government fees to the equation and it rises to 33%! That’s right, 33% of the cost of your new home is thanks to government fees.
In Vancouver that translates to $180,000 in fees and taxes of a typical new condo. This is significantly more than any other party involved in the transaction. Without a doubt there needs to be some consideration for government fees as none of the work is free and development rules and guidelines need to be adhered to - but how did it become a third of the cost of an average condo in Vancouver? Today we explore the information, the hypocrisy and some solutions that could help reduce the cost to the community.
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Dan Wurtele, PREC, REIA
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Ryan Dash PREC
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