Reduce or Eliminate Property Transfer Tax (BC Only)

First Time Home Buyer's Program for BC

When you purchase or gain an interest in property that is registered at the Land Title Office, you are responsible for paying property transfer tax. The tax is charged at a rate of 1% for the first $200,000 and 2% for the portion of the fair market value that is greater than $200,000.

 

The First Time Home Buyers' Program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax. 

If one or more of the purchasers don’t qualify, only the percentage of interest that the first time home buyer(s) have in the property is eligible.

For example, if you qualify and purchase a property with a fair market value of $400,000 with a person that doesn’t qualify you would still qualify. If you owned a 60% interest in the property, 60% of the tax amount would be eligible for the exemption.

 

 

 

Do I Qualify?

 

To qualify for a full exemption, at the time the property is registered you must:

  • be a Canadian citizen or permanent resident

  • have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years

  • have never owned an interest in a principal residence anywhere in the world at any time 

  • have never received a first time home buyers' exemption or refund

 

The property must:

  • be located in B.C.

  • only be used as your principal residence

  • have a fair market value of:

    • $475,000 or less if registered on or before February 21, 2017, or

    • $500,000 or less if registered on or after February 22, 2017

  • be 0.5 hectares (1.24 acres) or smaller

 

You may qualify for a partial exemption from the tax if the property:

  • has a fair market value less than:

    • $500,000 if registered on or before February 21, 2017, or

    • $525,000 if registered on or after February 22, 2017

  • is larger than 0.5 hectares

  • has another building on the property other than the principal residence

 

 

 

How do I Apply?

 

To apply for the First Time Home Buyers' Program you need to complete the First Time Home Buyers' Property Transfer Tax Return when you or your legal professional register the property transfer.

 

After you have applied you must meet additional requirements during the first year you own the

property to keep the tax exemption.  If you don’t qualify because you are not a Canadian citizen or permanent resident, but you become one within 12 months of when the property is registered, you may apply for a refund of the tax.

 

 

 

IMPORTANT! - To Keep the Tax Exemption

 

To keep the tax exemption you must have:

  • moved into your home within 92 days of the date the property was registered

  • continued to occupy the property as your principal residence for the remainder of the first year

 

You may keep part of the exemption if you moved out before the end of the first year.

If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you still qualify to keep the tax exemption.

 

 

 

What if I am building my First Home?

 

If you registered a vacant lot and built your own home, to keep the tax exemption:

  • the fair market value of the land when you registered the property plus the cost to build your home must be:

    • $500,000 or less if registered on or before February 21, 2017, or

    • $525,000 or less if registered on or after February 22, 2017

  • you must have built and moved into your home within 1 year of the date the property was registered

  • you must have continued to occupy the property as your principal residence for the remainder of the first year

 

You may keep part of the exemption if you moved out before the end of the first year.

If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you still qualify to keep the tax exemption.

 

Where can I get more information about the First Time Home Buyer's Program? 

The CRA encourages taxpayers to check its Web site often—all new forms, policies, and guidelines are posted there as soon as they become available.

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Krystal  250.219.3861
Kaela  250.219.3862
Email  info@themortgageduo.ca
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