What is Property Purchase Tax aka Property Transfer Tax in BC

When buying real estate in British Columbia, the government imposes a Property Purchase Tax based on the greater of the purchase price or the fair market value of the property. The tax is calculated at 1% of the first $200,000 and 2% of the balance of the value/purchase price.

Property Transfer Tax should not be confused with Property Taxes.

What is Fair Market Value?

Fair market value is the price that would be paid by a willing purchaser to a willing seller in the open market on the date of registration. An open market is where the property is offered for sale so that anyone likely to be interested in purchasing it may make an offer. For example, the seller lists the property with a realtor or advertises it for sale. If your tax return is reviewed by this office, you may be asked to provide evidence of how you knew the property was for sale.

In most open market transactions, the purchase price is the fair market value, as long as the transfer is registered within a few months after the sales contract is signed. In other instances, such as where no money changes hands or the transfer did not take place in the open market, the fair market value must be determined by other means, such as an independent appraisal or by reference to the most relevant BC Assessment value.


Property Purchase Tax Exemption

You may qualify for a tax exemption if you, and the property you are purchasing, meet the following guidelines:

Your down payment can not exceed 30% of the purchase price
The maximum purchase price to qualify for the exemption in Vancouver, Victoria, Squamish, Whistler, and the Fraser Valley is $275,000. In all other areas of the province, the maximum qualifying purchase price is $225,000.
You may never have previously owned an interest in your principal residence (anywhere in the world).
If you pay more than $11,000 towards the principal of your mortgage within the first year, or if your outstanding mortgage amount is less than 70% at the end of the first year, you will lose your property purchase tax exemption ($9,000 in some parts of the province).
You must be a Canadian Citizen or Landed Immigrant and have been a resident of British Columbia for at least 12 consecutive months immediately prior to the purchase.
The purchaser must occupy the property as their principal residence within 92 days of completion.

Under certain circumstances, the purchase of raw land or a building lot may qualify.
Other conditions apply.


How to File;

There are three types of Property Transfer Tax returns:

The green General Property Transfer Tax return is completed when NO exemption is being claimed.

The blue First Time Home Buyers' Tax return is completed when the transfer includes a qualified First Time Home Buyer.

The yellow Special Property Transfer Tax return is completed when claiming an exemption other than the First Time Home Buyers' exemption.

Most law firms and notaries have supplies of the tax return forms, or you can get them from any Land Title or Service BC-Government Agent office.

Why did I receive a letter one year after buying my first home?

If your home was purchased and registered on, or after, February 20, 2008, the ministry sends you a form letter one year after you bought the home asking you to confirm that the home is still your principal residence. This letter ensures that you meet the principal residency requirements of the exemption..

If your home was purchased and registered before February 20, 2008, the ministry sends you a form letter asking for details of your mortgage account(s). You need to have your financial institution or mortgage holder complete the mortgage details on the form letter, showing the outstanding balance on February 19, 2008. This is to ensure that you did not pay down your mortgage below the allowable limit before February 20, 2008


Where can I get more information?

You can get additional information by calling the BC Government at (250) 387-0604.