Buyer’s looking to purchase or gain property in B.C. must be aware of the Property Transfer Tax.
Property transfer tax exemptions – Province of British Columbia (gov.bc.ca)
What is a Property Transfer Tax (PTT)?
A buyer or their legal professional must file a PTT return and the Buyer must pay property transfer tax. In most cases, the PTT would be completed by a legal professional.
PTT is based on the fair market value of the property (land + improvements) on the day it is registered with the Land Title Office. In some cases, a Buyer can qualify for an exemption.
- Fair market value: The price paid by a willing purchaser to a willing seller for a property in the open market on the date of registration.
General PTT
The general PTT rate is:
- 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
Residential Property over $3M CAD
If the property has residential property worth over $3M CAD, a further 2% tax will be applied to the residential property value greater than $3M CAD.
- Mixed class (such as residential and commercial) properties are subject to a further 2% tax on only the residential portion of the property.
- Land classed as farm only that is used for an owner or farmer’s dwelling, will have only 0.5 hectares treated as residential property.
Additional PTT for Non-Canadians
** Foreign Buyer’s please seek further advice from a legal professional. RE: Prohibition on the Purchase of Residential Property by Non-Canadians Act. **
If the buyer is a foreign national, foreign corporation or taxable trustee, they must also pay the additional PTT on the fair market value of the residential portion of the property if the property is within a specified area of B.C.
- A buyer’s proportionate share is the percentage of interest that you’re registering on title with the Land Title Office
- (ex. 50% owner pays additional PTT on 50% of the residential properties fair market value).
If the property transfer is within the following areas, the tax rate is 20% on the fair market value of your proportionate share:
- Capital Regional District
- Fraser Valley Regional District
- Metro Vancouver Regional District
- Regional District of Central Okanagan
- Regional District of Nanaimo
Visit this link for more info on additional PTT:
Exemptions
When you purchase or gain an interest in a property, there are many ways you may qualify to reduce the amount of tax you need to pay.
Some examples of available programs that may qualify you for an exemption would be:
- First Time Home Buyers Program
- Purpose-Built Rental Exemption
- Newly-Built Home Exemption
- Family Exemptions
- Etc.
Learn more by visiting this link:
Property transfer tax exemptions – Province of British Columbia (gov.bc.ca)
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Speaking to a professional about Property Transfer Tax is essential. Please always verify the accuracy of this information through your own due diligence. Nicole McWilliams will assume no responsibility or liability for the accuracy of the information within.
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