What is it?
It’s easy to look at the purchase price of your prospective new home and forget about all the closing costs like home insurance, appraisal and legal fees, and taxes. As a homebuyer, when you purchase a property you will also be paying a tax on the sale or transfer of ownership of any residential real estate in BC. This tax is known as Property Transfer Tax (PTT) and is paid any time a property changes hands at the Land Title and Survey Authority.
Is this tax a Property Tax?
No! Property Tax is an annual tax paid for each property you own. This tax is made up of both municipal and provincial parts so the rate varies per municipality. PPT has a unified rate throughout the province that is determined based on the fair market value of the property at the date of registration with the Land Title Office.
Who pays the Transfer Tax
All buyers are required to pay PTT on the completion date when the seller receives the money and the title to the property is transferred to the buyer. This is a one time payment that allows the transaction to be registered. There are however, a few exemptions to the tax. Do you qualify?
One of the most important exemptions is for first time home buyers. Designed to help British Columbians enter the market and purchase their first home, the province introduced the First Time Home Buyers’ Program (FTHB). If you qualify, it reduces or eliminates the PTT on your first home.
The cost of PTT in BC
The amount of tax is calculated based on the fair market value of the land and building on the date of registration. If you are a Canadian citizen or permanent resident (and have no exemptions), the rate of PPT is as follows:
- 1% on the first $200,000
- 2% on the fair market value greater than $200,000 and up to and including $2,000,000
- 3% on the balance greater than $2,000,000
- A further 2% on the portion of the value greater than $3,000,000 if the property is residential
If you are a foreign national, you are required to pay additional property tax if the residential property transfers within specified parts of the province.
What is Fair Market Value?
Simply put, it is the purchasing price being paid by a purchaser to a seller for property. However, there are certain cases where money doesn’t change hands (inheritance, gift, etc.) so the fair market value in these cases would be based on BC property assessment as it is needed for tax purposes.
How do I calculate the PTT?
To help you estimate the PTT that will be owed on your property, you can use the Tax Calculator provided by the BCREA. Although it should not be considered a substitute for professional accounting or legal advice, it will give you an idea of the numbers to expect.