THE PROPERTY TRANSFER TAX
In British Columbia the government charges a tax on all property transfers. The tax is payable by the purchaser of that property. The tax is simply 1% of the first $200,000 of value and 2% on the balance. This is payable to the Provincial Government on completion date.
There are few exemptions to this tax. For instance there is an exemption when transferring property from a parent to a child, as long as it remains a principal residence. The most common exemption is for the first time buyer. In the Lower Mainland if the purchase price is below $525,000 then the first time buyer can be exempt from some or all of the tax providing certain criteria are met.
FIRST TIME BUYER EXEMPTION DETAILS:
- To be eligible for the full exemption the purchase price must not exceed $500,000 (in the Lower Mainland). Between $500,001 and $525,000 the amount of the exemption declines on a sliding scale to where it is zero at the $450,000 value.
- Each purchaser applying for the exemption must not have previously owned an interest in real estate anywhere in the world.
- If there are two purchasers, each owning 50% of the property and one has owned property previously, then 50% of the P.T. Tax is exempt as long as other criteria are met. Between $500,001 and $525,000 the full tax is payable and then a rebate for half the exemption is refunded later.
- The property must be a principal residence and owner occupied within 92 days of purchase.
- The purchaser must be a Canadian citizen or permanent resident of Canada and must have resided in the Province of BC for at least 12 months immediately prior to the purchase transfer date or paid income tax in BC for 2 of the last 5 years.
This list is not exhaustive and is presented as a guide for the situations met by most buyers. This list does not replace the need to read the actual legislation or consult your lawyer pertaining to your particular situation. If there is a conflict between the information presented here and the legislation, the legislation prevails.