A landmark federal government study has found that government- imposed costs (GICs) add about $90,000 onto the cost of a new detached house in Metro Vancouver and the Fraser Valley. Vancouver was ranked as having the highest government imposed costs within 21 Canadian municipalities surveyed, with an average of $99,124 tacked onto each new Vancouver house sold.
The study, done by Canada Mortgage and Housing Corporation, tallied the cost of municipal development cost charges, permit application fees, land transfer taxes, and the GST (the study was done in 2009 before the introduction of the harmonized sales tax.) It also included land dedications - where builders are required to pay cash or donate land for municipal parks or green space - new home warranty fees and inspection fees, among other charges that are required for new home developments.
Nationally, the study found that government-imposed costs averaged $47,643 to a new house price, or 13.4 per cent of the selling price for a "modest new house."
However, the costs accelerate in British Columbia. Vancouver had the highest level of overall GICs, followed closely by Surrey, at $95,941. Toronto ranked third at $93,319. Of the five Canadian cities with GICs of more than $60,000, three were in B.C., including Burnaby where a modest new house carries $82,811 in government-imposed costs.
As a percentage, GICs added 12.6 per cent to a new Vancouver house that sold for $790,000, 19 per cent to a new Surrey house that sold for $506,000, and 12 per cent to a new Burnaby house that sold last year for $688,000, the survey found. As a comparison, Calgary new houses carry only $30,000 in GICs, representing 8.3 per cent of the average selling price.
The government-imposed costs also effect Metro Vancouver's new condominium prices. In Vancouver, these charges add an average of $35,508 to a modest new condo priced at $399,000, while they nail $35,638 to a new Burnaby condominium, CMHC reports.
