First-time buyers laud changes

A tax break for first-time homebuyers was just what Mike Easton of Burnaby was hoping for.

"I'm happy, really happy," said Easton yesterday.

The 27-year-old painting contractor and his fiancee are in the market for a new home and regularly discuss Vancouver's soaring real- estate prices with friends.

Residential property values jumped 24 per cent on average across B.C. in 2006.

Under yesterday's provincial budget, first-time homebuyers will be exempt from paying the property-transfer tax if they buy a home for less than $375,000. Previously, the threshold was $325,000 in the Lower Mainland and $265,000 in the rest of B.C. The new exemption is provincewide.

If Easton and his fiancee buy a home for under $375,000, they would get a $5,500 break.

"It's great the government has made housing affordability a priority," Easton said. "There's a lot of young people like us that are wanting to get into the market. Anything that brings down the cost of buying a home is a good thing for us."

The provincial government has also increased eligibility for the homeowner grant -- which is based on a property's assessed value -- from $780,000 to $950,000. That move is expected to make an extra 100,000 property owners eligible for the grant. The maximum allowed is $845.

Seniors will be eligible for the grant no matter what the value of their property.

Legislation will also be introduced to allow homeowners to start deferring their property tax at age 55, rather than 60.

Finance Minister Carole Taylor said the government will also set aside $250 million for a housing endowment fund expected to generate $10 million a year.

That money will be used to invest in innovative housing solutions, she said.

Kelly Lerigny, president of the British Columbia Real Estate Association, said her organization lobbied the provincial government to increase the threshold for the property transfer-tax exemption.

"This is an excellent step," Lerigny said. "However, the government must not underestimate the negative impact of this tax -- which will remove approximately $925 million from purchasers' pockets this year -- on housing affordability, and should build on today's announcement through 2009."

Easton said he is pleased the provincial government has addressed the homelessness crisis that afflicts the Lower Mainland, including giving $45 million to convert 750 social-housing units to supportive housing.

George Heyman, president of the B.C. Government Employees Union, said the government's "housing budget" does not address cuts the government made to support for seniors living in their homes and for child care.

"The budget does nothing to invest in our children's future," Heyman said.

(prepared by David Carrigg/Vancouver Province)