Early in the federal election campaign, Prime Minister Stephen Harper announced that his Conservatives would like to give first-time homeowners a break. He proposed a $5,000 tax credit that would translate into the saving of about $750 for those buying a home for the first time.

It sounds good. Home ownership is increasingly out of reach for many people, particularly in areas such as the Lower Mainland, which has the highest housing prices in the country.

But if people are truly to be able to afford homes, all levels of government have to reduce their propensity to reach for taxpayers’ wallets.

Municipal governments assess development cost charges whenever there is a change in land use. These charges vary but are often more than $25,000 per housing unit. They are ultimately paid by home buyers as the costs are passed on by developers.

The provincial government charges a tax on every property transfer; it’s 1% on the first $200,000 and 2% above that. There is a one-time exemption for first-time buyers for homes worth $425,000 or less but in all other cases, the tax must be paid.

The federal government, however, despite the Harper initiative announced last month, is the biggest culprit. Buyers of all new homes, first-time or not, pay 5% GST on those homes. For a home in Coquitlam that sells for $600,000, that’s an extra $30,000.

The Harper government did bring the GST down from 7%, so it has taken a step in the right direction.

There is a reduction in GST on new houses below a certain price threshold but it does not apply to most B.C. markets. In effect, buyers here are discriminated against because housing prices are high — which means they could use the tax break even more.

The GST that the first-time buyer pays may possibly be recovered when the home is sold if prices keep going up. In the current market, GST will not be recovered, as prices are soft.

Contrast this level of taxation — probably close to $70,000 on a Lower Mainland single-family home — with what was available to first-time home buyers in B.C. almost 40 years ago.

The Social Credit government of W.A.C. Bennett offered buyers a $5,000 second mortgage at below-market interest rates or an outright grant of $1,000. As many people know, $1,000 in 1970 is worth about $10,000 today. This $1,000 grant came when the average home in Langley sold for $15,000 to $25,000.

By contrast, governments today give with one hand but they take a lot more away with the other.

Frank Bucholtz is editor of

The Langley Times, a Black Press

sister paper of The Tri-City News.