With a federal election approaching and municipal development cost charges up for review, the building industry is taking a hard look at taxes and fees that go into constructing a new home.
The Canadian Home Builders’ Association hired MNP to study the money collected from all three levels of government on a new build.
It found that in Kamloops, about $50,000 is collected in total on an average home. The assessed value of that average home could not be provided.
Canadian Home Builders’ Association Central Interior president Kelly Reid said that as governments continue to discuss housing affordability, it is important to understand how much tax is being paid. Increased taxes and fees on new builds, he said, impact the entire market.
“It pushes up used homes, as well,” Reid said. “As the supply of houses is required, if it pushes the new houses up, the resale market is also affected by it.
“I think it’s just some awareness around it and also when we’re talking to the three different levels of government, we want to make sure that we don’t continue to see increases to taxation and fees on a new home.”
New homes are charged myriad taxes and fees, including government sales tax, provincial sales tax and property transfer fees, with all three levels of government taking a piece of the pie.
The CHBA-MNP study revealed the majority ($29,700) of the $50,000 in revenues on that average newly constructed Kamloops single-family home went to federal coffers.
The province, meanwhile, picked up $12,000 and the city collected $8,700. However, the study determined additional municipal fees can be incurred to rezone, subdivide and site service, tacking on up to an extra $16,000 in municipal fees, depending on the build and requirements.
“All three levels of government are talking about trying to deal with housing affordability and the price of houses, so we don’t want to see them increase fees on houses because that, of course, goes against housing affordability,” Reid said.
This year, the city will be reviewing development cost charges, with meetings expected in the fall.