When you acquire or gain an interest in property registered at the Land Title Office, you or your legal professional are required to file a property transfer tax return and pay property transfer tax, unless you qualify for an exemption. Here's what you need to know about property transfer tax:
* 1% of the fair market value up to and including $200,000
* 2% of the fair market value greater than $200,000 and up to and including $2,000,000
* 3% of the fair market value greater than $2,000,000
Additionally, if the property's residential portion exceeds $3,000,000, a further 2% tax applies to the residential property value above $3,000,000.
For properties with mixed-class (e.g., residential and commercial), the further 2% tax is applied only to the residential portion.
Foreign nationals, foreign corporations, or taxable trustees must pay additional property transfer tax on the fair market value of the residential portion of the property if it is within the specified areas of British Columbia. Please refer to the Foreign Buyers Tax section.
The First Time Home Buyers' Program is designed to alleviate or eliminate the property transfer tax burden when purchasing your first home. Here's what you need to know:
To qualify for the program, you must meet the following criteria at the time of property registration:
* Be a Canadian citizen or permanent resident.
Have either:
* Lived in B.C. for at least one year immediately before the registration date.
* Filed at least two income tax returns as a B.C. resident in the last six taxation years immediately preceding the registration date.
* Have never owned a registered interest in a property that was your principal residence anywhere globally.
* Have never received a first time home buyers' exemption or refund.
The property must meet the following conditions:
* Solely serve as your principal residence.
* Have a fair market value of $835,000 or less (effective April 1, 2024).
* Be 0.5 hectares (1.24 acres) or smaller and contain only residential improvements.
If all criteria are met, you'll be exempt from property transfer tax on the first $500,000 of the property's purchase price.
You may qualify for a partial exemption if the property:
* Has a fair market value between $835,000 and $860,000 (effective April 1, 2024).
* Is larger than 0.5 hectares or has additional buildings besides the principal residence.
For purchases before April 1, 2024, to receive the full exemption, the fair market value must be $500,000 or less. For a partial exemption, it must be between $500,000 and $525,000. The new exemption increase is great news for homebuyers.
Foreign entities and taxable trustees are ineligible for the exemption. However, if you become a Canadian citizen or permanent resident within one year of registration, you can apply for a property transfer tax refund. Call 236-478-1593 for assistance.
The newly built home exemption aims to reduce or eliminate property transfer tax for qualifying purchases of principal residences.
* Full Exemption Threshold: Increased to $1,100,000 from $750,000.
* Partial Exemption: Available for properties slightly above the threshold, phasing out at $1,150,000 for qualifying purchasers.
1. Registration Date: Transfer must be registered at the Land Title Office after February 16, 2016.
2. First Registration with Completed Improvement: The property must be newly registered with its first completed improvement.
3. Applicant Status: Must be a Canadian citizen or permanent resident.
* Located in B.C.
* Used solely as the principal residence.
* Fair market value ≤ $1,100,000 (≤ $750,000 if registered before April 1, 2024).
* Land size ≤ 0.5 hectares (1.24 acres).
* Property with fair market value between $1,100,000 and $1,150,000 (between $750,000 and $800,000 if registered before April 1, 2024).
* Land size exceeding 0.5 hectares.
* Presence of additional buildings on the property besides the principal residence.
* Qualifying for the exemption may entitle applicants to either a full or partial refund of the property transfer tax paid.
* Individuals not initially eligible due to citizenship status may apply for a refund if they become Canadian citizens or permanent residents within 12 months of property registration.
* Foreign entities and taxable trustees are not eligible for the exemption.
