Property transfer tax information for BC residents.
What is the Property Transfer Tax?
1% on the first $200,000 and 2% on the balance
Who qualifies for the exemption?
To qualify for the FTHB exemption, the transferee (purchaser) must be all of the following:
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A Canadian citizen or a permanent resident as determined by Immigration Canada,
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a person who has resided in British Columbia for 12 consecutive months immediately prior to the date of registration of the transfer, or who has filed two income tax returns as a British Columbia resident within the last six years,
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a person who has never, at any time, held a registered interest in a principal residence anywhere in the world (a principal residence is defined as the usual place where an individual resides), and
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a person who has not previously received an FTHB exemption or refund.
What property qualifies for the examption?
The FTHB program provides a
full exemption from property transfer tax only on properties where:
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the improvements on the property become the principal residence (whether or not they are formally classified as residential),
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the land is 0.5 hectares (1.24 acres) or smaller, and
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the value of the land plus improvements falls below the set threshold amount of $425,000. The current threshold amount applies to purchases registered on, or after, February 20, 2008.
Who qualifies for partial exemptions?
Where a property has a fair market value of up to $25,000 more than the threshold amount ($425,000)
, the property is eligible for a partial exemption.
For example, for a property with a fair market value of $445,000, the partial exemption is calculated as follows:
Fair market value of property $445,000
Tax at 1% of the first $200,000 and 2% on the remainder =$6,900
Partial exemption calculation:
6,900 x (425,000 + 25,000 – 445,000)
‐ $1,380
25,000
Tax Payable = $5,520
Partial exemptions from property transfer tax are available in certain circumstances.
Where part of the improvements on the land are used for purposes other than the purchaser’s primary residence, such as where part of the improvement is used for commercial purposes or where there is a separate dwelling or residential improvement on the land, only the portion that is the purchaser’s primary residence is eligible for the exemption.
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