BC Budget Announcement: First Time Home Buyer Property Transfer Tax Full Exemption Raised to $500,000
FIRST TIME HOME BUYERS PROPERTY TRANSFER TAX EXEMPTION
Property Transfer Tax should not be confused with Property Tax. The Property Transfer Tax is a one time tax paid to the Provincial Government by purchasers of real estate. The Property Tax is the tax paid on an annual basis to the local City/Municipality. “First Time Home Buyers” who qualify, may be exempt from the British Columbia Property Transfer Tax. This tax is normally 1% of the first $200,000.00 of market value and 2% of any amount above $200,000.00. The following are some guidelines to determine if you are eligible for the first time home buyers exemption.
Please consider if you meet the following criteria:
* You are purchasing a residential property within the province of British Columbia which has a fair market value that does not exceed $500,000.00. Between purchase prices of $500,000.00 and $525,000.00 there is a partial exemption available.
* You must occupy the property as a principal residence within 92 days of the completion date of the purchase and for a minimum of one year following that date.
* You must be a citizen or a permanent resident of Canada and must have resided in British Columbia for a period of at 12 consecutive months immediately prior the application to register the purchase of the principal residence or filed at least 2 income tax returns as a B.C. resident in the last 6 years .
* You must not have previously owned an interest in a principal residence anywhere in the world at any previous time.
* Your mortgage or borrowings which are registered against the property must have a term of at least one year following the completion date of the purchase. In the event the mortgage has a term of less than one year or is a demand mortgage, you must pay the Property Transfer Tax at the time of purchase and apply for a refund.(Please be certain to make the application prior to the first anniversary of the completion date of the purchase).
* The property you are purchasing must be classified as residential, by the British Columbia Assessment Authority, and the land portion must not exceed 1.24 acres (0.5 hectares in area).
* In the event only one of the purchasers qualify, a partial exemption from Property Transfer Tax may be possible. Also, in the event the property is larger than 1.24 acres, a partial exemption may be available.