PTT and First Time Home Buyer's Fact Sheet
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.
The amount of the Property Transfer Tax is 1% on the first $200,000.00 of the property’s fair market value and 2% on 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). If the fair market value of the property is $250,000.00, the tax payable would be $3,000.00 (1% on the first $200,000.00 = $2,000.00 and 2% on the remaining $50,000.00 = $1,000.00).
“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).
There are a number of exemptions available to avoid this tax, the most common being for “First Time Home Buyers"
To qualify as a First Time Home Buyer, 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 $475,000.00. A partial exemption is available for homes between $475,000.00 and $500,000.00 (see formula below);
- 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.
Source: Copyright Â© 2008 by The Spagnuolo Group of Real Estate Law Firms.