Property Transfer Tax
Effective as of April 9, 2024
Property Transfer Tax (PTT) is a payable tax to the British Columbia’s Province.
When you purchase a property or become a property owner in BC, you will have to pay PTT in addition to the purchase price. Important: do note that PTT is not the same as the annual “Property Tax.” For PTT, the percentage of the tax that you pay is based on the % shared ownership or shared interest you have. For example, if a married couple purchases a home and are both registered on title with 50% ownership, then each person owes 50% of the PTT.
How to Calculate PTT:
1% on the first $200,000 market value
2% on the market value over $200,000 up to $2,000,000
3% on the market value over $2,000,000
If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000.
Assume the property has a market value of $1,500,000 this is how you would calculate:
1% on the first $200,000 = $2,000
Plus the 2% on balance of $1,300,000 = $26,000
The PTT of a $1,500,000 home would be: $2,000 + $26,000 = $28,000
Property Transfer Tax Exemption - to qualify for PTT exemption, you might need to check with an Accountant to see if you are qualified.
FIRST TIME HOME BUYER’S PROGRAM
has a fair market value of $835,000 or less (effective April 1, 2024)
Be 0.5 hectares (1.24 acres) or smaller
Be a Canadian citizen or permanent resident
Contain only residential improvements
Have either: Lived in B.C. for at least a year immediately before the date you register the property
Filed at least 2 income tax returns as a B.C. resident in the last 6 taxation years immediately before the registration date
Have never owned a registered interest in a property that was your principal residence anywhere in the world at any time
Have never received a first time home buyers' exemption or refund
Must only be used as your principal residence
Note: if one or more of the purchasers don’t qualify, only the percentage of interest that the first time home buyer(s) have in the property is eligible. For example, if you acquired 60% interest in the property and another person acquired 40% interest but only you meet the qualifications, only your 60% would receive the exemption.
You may qualify for a partial exemption from the tax if the property:
Has a fair market value more than $835,000 but less than $860,000 (effective April 1, 2024)
Is larger than 0.5 hectares
Has another building on the property other than the principal residence
→ Read more info here to see if you qualify for other exemptions.
Tips from Our Team to You:
Always be prepared to have some extra cash on hand when purchasing a home (PTT, new home GST, closing legal fees, repair deficiencies, renovation, etc.)
If you qualify for the PTT exemption but you are purchasing the home with someone else, check to see if they are also qualified. Otherwise the PTT exemption will only be applied to you and base on your % of ownership
If you are unsure whether you qualify for the exemption or not, we recommend you to seek to expert (Notary or Lawyer that specializes in closing Real Estate transactions or BC Government Services)
If you qualify for the program, but didn't apply when you registered your home, you may apply for a refund from the first anniversary to 18 months after the registration date. Click here to learn more about refund (again, always seek expert if you are unsure about it!)
To learn more, we recommend speaking with a Legal Advisor or Accountant!
Got Questions? Let’s Connect!
Written by Ck Real Estate Team
