A recent Black Press editorial on the many taxes paid by home buyers prompted an interesting response.

A former realtor called to tell me that her granddaughter bought her first home, and it was within the limits to qualify for the first-time buyer exemption from the provincial property purchase tax.

However, she had to pay the tax.

The reason – she put $100,000 down on the home – too much as far as the bureaucrats running the program were concerned. At the time she purchased the home, there were a number of financing requirements in place, and those who actually saved some money before buying a home were penalized by having to pay the tax.

The provincial government has since changed that requirement. As of Feb. 20 of this year, there are no longer any financing requirements. The only requirement is that those buying the home are genuine first-time buyers, Canadian citizens or permanent residents, and have lived in B.C. for 12 months. They cannot have owned a home anywhere in the world, and they must occupy the home they are buying for at least one year.

The change in financing requirements is a welcome step in the right direction. The old requirements were merely encouraging first-time buyers to take on more debt.

However, the exemption limits for first-time buyers remain too low. Buyers are only exempt from the property purchase tax if the home they buy costs $425,000 or less. The taxes are huge when the home is over that price.

An example in a provincial government bulletin on the tax notes that buyers can receive a partial exemption for homes over $425,000. The property purchase tax on a home that sells for $445,000, for example, is $6,900.

The “exemption” on this home, which sells for only $20,000 over the upper limit, is $1,380. Thus someone who pays the extra $20,000 for the home will also pay another $5,520 in property purchase tax – more than one-quarter of the additional purchase price.

The exemption example shown in the bulletin is a clear example of just how much of a financial hit this tax is to home buyers – first-time or not.

Yet the provincial government has no intention of eliminating it, or even reducing it. The tax is one per cent on the first $200,000 and two per cent on the remainder.

Recently, Finance Minister Colin Hansen was bemoaning the fact that a reduced number of home sales in B.C. this year was cutting into government revenue, because not as many people are paying this tax.

Let’s call the property purchase tax what it really is – a cash cow that the province has no interest in getting rid of. It is quite happy to collect an obscene amount of taxes from people on the biggest purchase that most of them will ever make, and if they decide to move a few times over the course of their adult lives, it will collect even more from them.

I believe that all home sales at or below the price of an average home, say $500,000 or so at present, should be totally exempt from this tax.

Frank Bucholtz is the editor of the Langley Times.