Property Transfer Tax is a land registration tax imposed by the Province of BC. It must be paid any time a property changes hands at any Land Title Office in British Columbia. Property Transfer Tax is payable on the fair market value of the property being transferred.
Usually, fair market value is the purchase price. In other instances, such as where no money changes hands or the transfer did not take place in the open market, the fair market value must be determined by other means, such as an independent appraisal or by reference to the most relevant BC Assessment value.
The amount of Property Transfer Tax payable on a purchase is calculated as follows: • 1% of the fair market value up to $200,000, • plus 2% on the balance
Example Purchase Price = $450,000 Property Transfer Tax Calculation 1% of 1st $200,000 = $2,000 + 2% of the balance ($250,000) = $5,000 Total Tax Payable = $7,000
Exemptions for First Time Home Buyers Introduced in 1994, the First Time Home Buyers' Program is designed to help British Columbians purchase their first home. Under the program, eligible purchasers can claim an exemption from Property Transfer Tax if the fair market value of the home is less than the threshold amount.
PurchaserYou qualify for the exemption if: • 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
PropertyThe 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.
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