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Ravi Punia

Team 3000 Realty Ltd.
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How Much Does the Property Transfer Tax Cost in B.C. ?

In a previous blog post, we looked at what the property transfer tax is in B.C.  This provincial tax is a heavy burden and significant closing cost.  This is especially true in expensive Fraser Valley real estate markets like North Delta, Surrey, Langley, Abbotsford and Mission.


I thought it might be useful to provide some specific examples and put some numbers to just how much the property transfer tax can add to the purchase of a home in B.C. 


Using statistics current as of February 2022, here are some illustrations below:



As you can see, the property transfer tax in B.C. can add tens of thousands of dollars to the cost of buying a home in Metro Vancouver and the Fraser Valley.


As always, you should consult with a legal professional to calculate the exact amount of property transfer tax you might owe on the aquisition of a home in the Fraser Valley or Metro Vancouver.  The above examples were for illustrative purposes only and each buyer's situation is unique.


The provincial government has a handy calculator that you might want to check out, to estimate property transfer tax payable.


If you are in the the market to buy a house, townhouse or condo and looking for a real estate agent, please contact me today.  I can help you navigate all aspects of purchasing a home, including understanding your closing costs.



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Posted in buying, education, legal, property taxes
What is the Property Transfer Tax in B.C. ?


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."


Furthermore, the government explains what the tax is based on:

"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."

 
There are three rates to consider when calculating your total property transfer tax amount:
 

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.



Summary

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.


Please contact me today to discuss any matter related to buying a home.



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