I'm a First Time Home Buyer in Vancouver, Do I Pay For Property Transfer Tax?

First time Vancouver home buyers and property transfer taxBritish Columbia’s first time home buyers’ program helps reducing or eliminating the property transfer tax payable on a first time home purchase. The qualify buyers may be eligible for a full or partial exception from property transfer tax.

What qualification is required to be exempt from Property Transfer Tax (PTT)?
The following is required when registering the property:
- The real estate purchaser has never owned a “principal Residence” anywhere in the world. (Principal residence is a place that a person makes their home)
- The real estate purchaser has never received a first time home buyers program exemption.
- The real estate purchaser must be a Canadian Citizen or Permanent resident.
- The real estate purchaser has lived in BC province for twelve consecutive months prior to purchase.
- The property must be in British Columbia
- The property must have a fair market value of $500,000 when registered after February 22, 2017 and must be smaller than 1.24 acres or 54,014.4 Square Foot.

The real estate first time home purchaser, may qualify for partial exemption if the property fair market value exceeds $500,000 and is larger than 1,24 acres.

It is important to keep up to date with this government program as it may increase its threshold of the property’s fair market value.

How is the PTT amount calculated or in other words what is the Tax rate?
Tax Rates
The property transfer tax rate is:
• 1% on the first $200,000,
• 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000,
• 3% on the portion of the fair market value greater than $2,000,000, and
• If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000 (effective February 21, 2018).
If the property is classified as residential and farm, or is residential mixed class (such as residential and commercial), you pay the further 2% tax on only the residential portion of the property.

What is Fair Market Value?
Fair Market value is a total price paid for a property in an open market by a ready and willing real estate purchaser to a ready and willing home seller.

It is important to know there are many other exemptions exist in the province program that can help reduce or remove the PTT, such as newly built home, Family transfer, joint tenant transfer and many other ones.
When it comes to taxes, it is best to consult an accountant who is familiar with property and real estate tax regulations.