Homebuyers in the Fraser Valley real estate market (and all of British Columbia), need to be aware of the Property Transfer Tax (PTT). It forms a significant portion of the closing costs, when buying a home or property in the province.
The B.C. government describes the tax as:
"When you purchase or gain an interest in property that is registered at the Land Title Office, you or your legal professional must file a property transfer tax return and you must pay property transfer tax, unless you qualify for an exemption.
In most cases, property transfers are completed by a legal professional."
"The property transfer tax is based on the fair market value of the property (land and improvements) on the day it was registered with the Land Title Office, unless you qualify for an exemption or purchase a pre-sold strata unit.
Property transfer tax should not be confused with annual property taxes. Annual property taxes are paid yearly to your municipal or rural tax office for each property you have a registered interest in to fund services in your area."
1) General Property Transfer Tax
The general property transfer tax applies for all taxable transactions. The general property transfer tax rate is:
1% of the fair market value up to and including $200,000
2% of the fair market value greater than $200,000 and up to and including $2,000,000
3% of the fair market value greater than $2,000,000
2) Further 2% on Residential Property Over $3,000,000
If the property has residential property worth over $3,000,000, a further 2% tax will be applied to the residential property value greater than $3,000,000.
If the property is mixed class (such as residential and commercial), you pay the further 2% tax on only the residential portion of the property.
3) Additional Property Transfer Tax
If you’re a foreign national, foreign corporation or taxable trustee, you must also pay the additional property transfer tax on the fair market value of the residential portion of the property if the property is within a specified area of B.C.
As you can see, the property transfer tax in B.C. adds a significant cost to the purchase of a home or property. This is especially true in Metro Vancouver and Fraser Valley real estate markets, where home prices are very expensive.
As a homebuyer, I can assist you in calculating and figuring out just how much this burdensome tax might cost you. I specialize in working with homebuyers in the Fraser Valley and Metro Vancouver markets to find houses, townhouses and condos that fit their budgets.