Property Transfer Tax In General:
1% of first $200,000 of purchase price or “fair market value”
2% of the balance
Property purchased for $265,000
1% of $200,000 $2,000
2% of $65,000 $1,300
Total tax payable: $3,300
First Time Home Buyers may qualify for exemption if:
o The purchase price (including net HST) is below $425,000 in the Lower Mainland and below $265,00 for the rest of BC. (see below).
o Each purchaser applying for exemption is a permanent resident of Canada or a Canadian citizen. Each purchaser must have resided in Canada for at least one year immediately prior to registration date
o Each purchaser has never owned an interest in a principal residence anywhere in the world.
o The amount borrowed must be at least 70% of the fair market value of the property. The amount borrowed does not include funds borrowed from relatives.
o During the first 12 months, the mortgage cannot be reduced by more than the greater of $13,000 (Greater Vancouver & Fraser Valley) and the amount that would reduce the mortgage to 70% of the fair market value.
o The mortgage term must be at least one year. If not, the full Property Transfer Tax is payable at the time of purchase and the rebate may be applied for after residing in the residence for 12 months.
o The purchaser must occupy the property within 92 days from the date of registration of the transfer in the Land Titles Office.
o The purchaser must reside in the property for a period of at least one year from the date of transfer.
o If one of the purchasers does not qualify for exemption and the other does, the amount of exemption will depend on the percentage of ownership registered. For example; Joe qualifies and owns 60% of the property, Sam does not qualify for the exemption and owns 40% of the property. They would qualify for 60% of the tax exemption.
Example of Calculating Pro-rated Exemption ($325,000 - $350,000)
There is no exemption when the market value exceeds $350,000
If the market value is between $325,000 and $350,000 the proportionate exemption is calculated as
Example where the market value is $331,500:
PTT Exemption = ($325,000 + $25,000-$331,500)
The pro-rata exemption is calculated as 74% of $4630 = $3462.20
The purchaser now pays $1203.80 in PTT