When you purchase a home in British Columbia you are charged what’s called Property Transfer Tax. This is a tax charged on a percentage of the purchase price. If you are a first time Home Buyer, meaning you have never owned a home anywhere in the world, you may qualify to reduce or eliminate the Property Transfer Tax.
If you are purchasing a property with another party that does not qualify then you will only be eligible to save on your percentage of ownership. Meaning if you purchase a property as Tenants-in-Common, as opposed to Joint Tenants (which is 50% and 50%), with Party B and your ownership percentage is 75%, then you would be eligible for an exemption on your 75% ownership percentage.
If you qualify for the PTT exemption, this savings can be obtained at the time of registration, meaning your closing date.
To qualify, you must be a Canadian Citizen or Permanent Resident, lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years, and have never owned a principal residence anywhere in the world.
The Property Must:
- Be located in B.C.
- Be used as your principal residence;
- Have a fair market value of $500,000 or less if registered after February 22, 2017;
Partial Exemption Criteria:
- Fair Market value is less than $525,000.00 if registered after February 22, 2017;
- The property is larger than 0.5 hectares
- Has another building on the property other than the principal residence;
It is critical to remember that the Provincial Government can reassess you even after you receive the exemption on your closing date. To keep the exemption, you must make certain that you move into the home within 92 days of the registration date and that you occupy the property as your principal residence for the remainder of the first year.