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Budget 2026: A Triple Threat to BC’s Real Estate Sector

As the owner of 88West Realty, a leading property management and sales firm in BC, I’m deeply concerned about the proposed Budget 2026 measures. These changes impose significant new pressures on our industry, threatening affordability and investment. Here’s why this is a critical issue from multiple angles:

1.      Impact on Property Management: Eroding Thin Margins

Property management sector operates on slim margins. Between skyrocketing property taxes, surging maintenance costs, and mortgage payments that no longer service the debt, landlords are frequently facing negative monthly rental income. We have fought to keep our management fees low to support these our clients, but the new 7% PST expansion is the breaking point.

  • 12% Combined Tax Burden: Layering 7% PST on top of 5% GST creates a 12% tax on services – a direct hit to viability, often passed to tenants already facing affordability challenges.
  • Administrative Complexity: Commission for mixed-use properties (e.g., 40% retail, 60% residential), we must prorate taxes precisely. This adds costly “soft” administrative burdens without generating revenue.
  • Chilling Investment further: Higher taxes deter real estate investors, reducing rental housing supply for tenants in need.
  • Developer Squeeze: Increased PST on construction inputs raises costs, exacerbating the housing shortage.
 

2. Double Hit for Business Owners and Tenants

As both a service provider and a commercial tenant, I feel this personally:

  • Extra 7% PST on management fees passed through by landlords.
  • PST applied to accounting/bookkeeping services needed to comply with these very taxes – taxing the tax preparation itself.
 

3. Surging “Soft Costs” in Development

Applying PST to 30% of architecture/engineering fees and 7% on commercial commissions piles on hidden costs, making new housing projects less feasible.

The Bigger Picture: Taxing the processes of building, managing, and maintaining homes drives up costs across the board. We can’t address the housing crisis by making it more expensive to sustain our existing stock. BC needs fiscal policies that support growth, not layers of taxation that burden homeowners, renters, and small businesses.

So, is shifting the budget deficit burden to taxpayers a genuine fix?