Last week, the province increased the threshold for the provincial homeowner grant to $1.65 million, up $50,000 from the year before.
This will keep a lot of homeowners happy, including those in Burnaby. But it likely isn’t the right thing to do.
The grant was introduced in the 1950s as an incentive to encourage homebuyers. But given our current market conditions, it would be hard to argue that government incentives are needed to encourage home ownership. In fact, other branches of the government are actively working to cool the real estate market.
The B.C. NDP, sensing an inherent unfairness in that system, pledged during its 2017 campaign a similar subsidy of up to $400 for people who rent. They’ve yet to make good on that promise, which joins a long list of pledges to be addressed at some vague time in the future.
When the NDP pledged the “renters rebate,” then-Liberal leader Christy Clark criticized the plan, saying it could result in very wealthy renters getting cheques they don’t need or deserve funded by the taxpayers. But with no means test, that’s precisely what the homeowner grant does today.
In fact, then-NDP housing critic David Eby suggested some kind of test – to at least make sure homeowners who get the grant pay taxes in B.C. – would make a lot of sense. It still does – the difference being that now the NDP is in a position to do something about it.
Homeowners vote, and they’ll surely begrudge anyone who takes away an $800-per-year buffer on their municipal taxes.
For that reason alone, don’t expect any big changes to this outdated program soon, no matter who’s holding the purse strings in Victoria.
As policy, having a hands-off approach to the homeowner grant is indefensible. As politics, it’s unbeatable.
