The BC provincial government collects a Property Transfer Tax on sales of real estate. The tax is applicaple to both new and resale homes. The tax is calculated at the rate of 1% on the first $200,000. of value plus 2% on the remaining balance. Although the BC Real Estate Association (BCREA) has lobbied hard for changes to and outright abolition of the PTT, the provincial government continues to resist any major changes to this significant and growing source of tax revenue.
PTT Exemptions For First-Time Home Buyers
The First-Time Home Buyers Program (FTHB) was introduced in March 1994, updated in June 2005 and again in February 2008 to provide exemptions to individuals purchasing their first home. First time Buyers can now buy a home priced up to $425,000 and not pay the Property Transfer Tax (PTT). The new rules also provide a proportional tax exemption for home priced up to $450,000.
Changes to Financing Restrictions
First-time home Buyers can now pay down their mortgages by any amount in the first year of ownership without being disqualified from the exemption. Gone are the PTT financing rules that required Buyers to have a minimum 70% mortgage and registered financing to qualify for the exemption.
Program Eligibility Restricted
The program carries a number of restrictions based on the value of the property purchased.
The BC provincial government announced in January 2008 the threshold at which the Home Owner Grant is phased out is increased to $1,050,000 from the previous level of $950,000. In practical terms, over 95% of BC homeowners remain eligible for the full grant.
Properties valued over $1,050,000 will have the grant reduced by $5 for every $1,000 in assessed value in excess of the new threshold. The basic grant is eliminated entirely for properties valued at $1,164,00 and higher.
The Federal government offers a GST/HST rebate program for purchases of New Housing. The program can provide tax relief of up to 36% of the GST paid on the purchase of a New Home. There are a number of restrictions and qualifications that determine eligibility. Click on the link below for details.
Tom Davis | REALTOR®
Personal Real Estate Corporation
Royal LePage Sussex
604 787 1456
This communication is not intended to cause or induce breach of an existing agency agreement