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Inspiration from Steveston Village

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I am regularly asked about the property transfer tax, so I thought I would post here as an information source rather than continually pointing people to other resource pages.  The tax, like all taxes, is a government money grab that, since 1994, has basically become an accepted part of buying real estate.  It applies to all fair-market price purchases, except a one-time exemption to first-time home buyers who meet a particular set of criteria.

 

The rate of the PTT is 1% on the first $200,000 of a purchase, plus 2% on everything above $200K.  That’s it – simple and easy, but to provide an example:

 

if fair market value of property is $500,000
tax payable is: 1% of $200,000 = $2,000
plus 2% of $300,000 = $6,000
for total tax payable of $8,000
 

An exemption to the tax can be applied for and is available to those buying their first home, with the following parameters:

  • you are a Canadian Citizen, or a permanent resident as determined by Immigration Canada,
  • you have lived in British Columbia for 12 consecutive months immediately before the date you register the property, or you have filed 2 income tax returns as a British Columbia resident during the 6 years before the date you register the property,
  • you have never owned an interest in a principal residence anywhere in the world at anytime,
  • you have never received a first time home buyers’ exemption or refund.

The property you purchase qualifies if:

  • the fair market value of the property is not more than the current threshold of $425,000,
  • the land is 0.5 hectares (1.24 acres) or smaller, and
  • the property will only be used as your principal residence.

Though the threshold is right now $425,000, there has been suggestion that it might soon be increased to $500,000.

 

Information on applying for the exemption can be found here: http://www.sbr.gov.bc.ca/documents_library/brochures/FirstTimeHomeBuyer.pdf.

 

In addition to this common exemption, there are a number of other situations where the tax would not apply.  These are all fairly uncommon or highly specific, so I will direct you here: http://www.sbr.gov.bc.ca/individuals/property_taxes/property_transfer_tax/exemptions

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