Hefty fees and taxes placed on new housing developments are a significant contributor to Vancouver’s sky-high housing prices.
An new, independent study conducted for the Greater Vancouver Board of Trade’s Housing Forum 2018 found that government taxes and fees account for 26.22% or $220,256 of the total $840,000 cost of a typical new apartment.
The research was carried out by appraisal and tax expert Paul Sullivan from Burgess, Cawley, Sullivan and Associates Ltd., a local commercial real estate appraisal and property tax consulting group.
“When expressing their deep concerns over housing affordability, why haven’t governments taken a long hard look in the mirror?” asks Sullivan.
“Governments at all levels are increasingly addicted to real estate fees and taxes. At a time when all governments are purportedly concerned about housing affordability, all of these increased taxes and fees are just making housing even more expensive.”</>
Sullivan took on redevelopments on Vancouver’s Cambie Street Corridor as a case study, specifically the example of a $30-million, 20,000-sq-ft redevelopment site with a buildable floor space ratio (FSR) density of 2.5 times the size of the lot or 50,000 sq. ft. of floor area. The average unit size is 800 sq. ft., and the average unit value is $960,000.