Property
Transfer Tax
Property transfer tax is different from property tax. You pay property transfer
tax when you purchase or acquire an interest in a property. You pay property
tax on an annual basis for services you receive from your local government.
What is the Tax Rate?
The amount of tax due
depends on the fair market value of the property. If the fair market value is
$200,000, or less, the tax is 1% of the fair market value. If the fair market
value is greater than $200,000, the tax is 1% of the fair market value up to
$200,000, plus 2% on the portion of the fair market value that is greater than
$200,000.
The First Time Home Buyer’s Program
If you are purchasing your
first home, you may qualify for an exemption from property transfer tax, if you
meet the stipulated requirements.
What are the Requirements?
You qualify for the requirements if:
► you are a Canadian citizen or
permanent resident;
► you have lived in British
Columbia for 12 months consecutive months immediately before the date you
register the property, or you have filed 2 income tax returns as a BC resident
during the past 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 homebuyers’ exemption or refund.
The property you purchase
qualifies if:
► the fair market value of the
property is not more than $425,000;
► the land is .5 hectares (1.24
acres) or smaller; and
► the property will only be
used as your principal residence.
If the property does not meet all of these requirements, you still may qualify
for a partial exemption.
How to Apply for the Exemption
You apply for the exemption when you register the property at the land titles
office.
Your lawyer or notary public register the property and applies for the
exemption on your behalf.
The land titles office sends your application to the Ministry of Small Business
and Revenue to verify your eligibility.
Requirements to Keep the Exemption
► you need to occupy the
property within 92 days of registration and continue to use the property as
your principal residence for at least 1 year from that date;
► if the land is vacant, a
principal residence needs to be built on the property within one year of the
registration date, and you need to reside in the property for the remainder of
that year; fair market value of the land plus the building improvements cannot
exceed $425,000;
► at the end of the first year,
the ministry of finance will send you a letter requesting details of the
financial accounts that you have registered against the property for that year;
► it is your responsibility to
ensure that the ministry receives the necessary information; and
► you may still qualify for a
partial exemption if you do not meet all of the above requirements.
If you wish to learn more information, or wish to verify this information, I
encourage you to visit the Government of British Columbia’s website: www.gov.bc.ca or
http://www.sbr.gov.bc.ca