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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 $550,000
tax payable is: 1% of $200,000 = $2,000
plus 2% of $50,000 = $7,000
for total tax payable of $9,000

 

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

Comments

kelico on Aug 27, 2011 12:33 PM
Since my move to BC, I've been victim to the extortion tactics used by the govt. here on a few instances.. one, of course, being the PTT. The same service in AB for transferring title is anywhere from 150.00 to 500.00. depending on your legal provider. Where does the BC Govt, get the authority to rip people off like this? How is it that no one has been lynched for even suggesting such a ridiculous money grab. ICBC is, of course, the other extortioniztion..
After paying an extra 10,000.00 for a house (just for being lucky enough to be in BC), the financial strain is leaving us at whits end.
thank you for accepting our generous gift so graciously.. and for DOUBLING my insurance as well. If I had a dollar for every time someone has said "BC stands for bring cash".. I would actually have a bank account to speak of.
IT IS INSANE HERE!!!!
where does the revenue go? seriously.. where?

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