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What is it?
The Property Transfer Tax is a tax payable to the Provincial Government by purchasers of real estate. The tax applies to all types of real estate, whether residential, commercial or industrial.
How is it calculated?
The amount of the Property Transfer Tax is 1% on the first $200,000.00 of the property’s fair market value, 2% on the amount between $200,000 and $2,000,000, and 3% of the remaining fair market value.
For example, if the fair market value of the property is:
$200,000.00, the tax payable would be $2,000.00 (1% of $200,000.00).
$800,000, the tax payable would be $14,000 (1% on the first $200,000.00 = $2,000.00 and 2% on the remaining $600,000.00 = $12,000.00)
$2,400,000, the tax payable would be $50,000 (1% on the first $200,000.00 = $2,000.00, 2% on $1,800,000) = $36,000, 3% on $400,000 = $12,000)
What is Fair Market Value?
“Fair Market Value” is best described as the price that would be paid for a property on the open market (which is usually the actual purchase price paid for the property).
What is the “Additional Property Transfer Tax”, or what is sometimes called the “Foreign Buyers Tax”?
This is a 15% tax that is payable by anyone other than a Canadian citizen, permanent resident or a person registered under the Provincial Nominee Program. Note that for those buyers who are registered under the B.C. Provincial Nominee Program, they must be registered before the date of transfer, and only the first purchase is exempt. Any subsequent purchases are taxable.
This tax applies to all properties in the Greater Vancouver Regional District.
How does a buyer qualify for the First Time Home Buyers Exemption?
To qualify as a First Time Home Buyer and avoid paying the PTT, the following criteria must be met:
- Purchaser must never have owned an interest in a principal residence anywhere in the world at any time;
- Purchaser must be a citizen of or a permanent resident of Canada;
- Purchaser must have resided in B.C. for 12 consecutive months immediately before the date they become the registered owner, or the Purchaser has filed two income tax returns as a British Columbia resident within the prior 6 years of becoming the owner;
- To obtain full exemption, the purchase price must not exceed $500,000.00. A partial exemption is available for homes between $500,000.00 and $525,000.00;
- Purchaser must move into the property within ninety-two days after registration of the purchase of the property and reside in the property for at least one year;
- Pro rata exemption where property exceeds .5 hectares or a portion of the property is not residential (i.e. commercial lofts) – purchase price of entire property must not exceed the price limitations.
How does a buyer qualify for the Newly Built Home Exemption?
To qualify for the Newly Built Home Exemption and avoid paying the PTT, the following criteria must be met:
- The property must be newly built, as defined in the legislation
- The Buyer must be an individual (may not be in a company name, trust, etc.)
- The Buyer must be a Canadian citizen or permanent resident
- The property must used as the principal residence of the Buyer, who must move into the property within ninety-two days after registration of the purchase of the property and reside in the property for at least one year;
- To obtain a full exemption, the purchase price must not exceed $750,000.00. A partial exemption is available for homes between $750,000.00 and $800,000.00;
- The property must be 1.24 acres or smaller.
Are there other exemptions?
Yes, such as a transfer of a principal residence between family members. For details on this and other exemptions, go to http://www.rev.gov.bc.ca/RPT/ and pick the “Property Transfer Tax” button located on the right hand side on this screen.
Property Transfer Tax should not be confused with Property Tax. The Property Transfer Tax is a one time tax paid to the Provincial Government by purchasers of real estate. The Property Tax is the tax paid on an annual basis to the local City/Municipality.
Please remember that the Property Transfer Tax Act may frequently change along with the exemptions for payment of this Tax. While we try to keep our website up to date as much as possible, please do not rely upon the information without talking to one of our lawyers.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice regarding your own situation.
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