First Time Homes Buyers Property Transfer Tax Exemption
When you buy a home in BC, you will have to pay the property transfer tax. The cost of the tax is calculated as 1% on the first $200,000 + 2% up to $2 million + 3% up to 3 million and if residential 5% on the balance over $3 million. This can be quite costly so the government has a tax break for first time home buyers.
To be considered a first time home buyer, at the time the property is registered….. You must meet the following criteria:
Be a Canadian Citizen or permanent resident
Live in B.C in the last 12 month or
Filled income tax return as a B.C resident twice in the last 6 years
Have never owned or had an interest in a principal residence anywhere in the world at any time
Have never received a first time home buyers’ exemption or refund
Full exemption (100%), the property itself must:
Located in BC
Used only as your principal residence
Have a fair market value of $500,000 (as of Feb 22 2017)
Is 0.5 hectares (1.24 acres) or smaller
Partial Exemption criteria: (50%)
Has a fair market value less than 525,000 (as of Feb 22 2017)
Is larger than 0.5 hectares
Has another building on the property other than the principal residence
Once you received the exemption, you must have the following to keep it:
Moved into the home within 92 days of the date the property was registered at land titles (usually the “completion date” on your contract of purchase and sale)
Live in the house as a principal residence for min 1 year
If you move out after 1 year, you can keep a part of the exemption