Property Transfer Tax

What is it? Property transfer tax is a provincial tax payable when someone purchases or gains interest in a property in BC. After any transfer of property, a property transfer tax return must be filed by either the individual or by a legal professional and then paid. The property transfer tax is calculated based on the property’s fair market value on the day it was registered with the Land Title Office.

How to calculate it

The property transfer tax consists of three rates when determining how much is owed:

1. The General property transfer tax.

2. Additional rate on residential property over $3,000,000.

3. Additional property transfer tax.

The general property transfer tax is applicable to all transactions, with a rate of 1% of the fair market value on the first $200,000; 2% of the fair market value between $200,000 and $2,000,000; and 3% of the fair market value for properties greater than $2,000,000. For properties with a fair market value greater than $3,000,000, an additional 2% in tax is applicable to the property’s value exceeding this threshold. For foreign nationals, foreign corporations or taxable trustees, an additional property transfer tax for any residential portion of property purchased must also be added.

Exemptions

Many exemptions exist for property owners to qualify for reduced rates and full exemptions. There are some common exemptions worth noting:

1. The first time home buyers’ program is available to Canadian citizens or permanent residents who meet a number of requirements. Those eligible are exempt on the first $500,000 of the property purchase price for property transfer tax if the property is used as the purchaser’s principal resident, has a fair market of $835,000 or less, is 0.5 hectares or smaller, and contains only residential improvements.

2. Purchases of new qualifying purpose-built rental buildings may also be exempt from the additional 2% property transfer tax on the remaining balance for property valued above $3,000,000.

3. Purchases of newly built homes may qualify for a property tax exemption.

4. Transfer of property among family members such as transfers of principal residences, recreational residences and transfers resulting from a marriage breakdown may be exempt from property transfer taxes.

5. For other exemptions and specific information for qualifications, please click here.