When buying a home in BC, the buyer automatically pays the provincial Property Transfer Tax (PTT).
The tax is payable on the fair market value of the home or other property.
This is different from the property tax. You pay property tax on an annual basis for services you receive from your local government.
How much is it?
The tax is charged at a rate of 1% on the first $200,000 of the fair market value of the property, and 2% on the rest.
For example, if the fair market value of the property is $150,000, the tax is 1% of $150,000 or $1,500.
If the property’s fair market value is $250,000, the tax is 1% of $200,000 ($2,000) plus 2% of the remaining $50,000 ($1,000) for a total tax of $3,000.
Qualifying first-time buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% of the remainder of the purchase price of a home priced up to $425,000. There is a proportional exemption for homes priced up to $450,000.
For more information, please click here.
To help home buyers understand the tax and how to calculate your payment, the Ministry of Finance now provides plain language documents on all aspects of the PTT, from explaining what the tax is to calculating an exemption and filing a PTT return.
For more information, please click here.Source: Real Estate Board of Greater Vancouver.