Understanding Property Transfer Tax in B.C. — And How You Might Avoid Paying It
As a mortgage broker here in beautiful British Columbia, one of the most common surprises I see for first-time homebuyers and even experienced buyers is the Property Transfer Tax (PTT). It’s not a small fee, and it’s important to know how it works—and more importantly—whether you might be eligible for an exemption.
Here’s a breakdown of what you need to know:
What Is Property Transfer Tax?
When you purchase or gain an interest in property in B.C., the provincial government charges a Property Transfer Tax. This is not the same as your annual property tax. Instead, it’s a one-time tax paid when a property’s title is legally transferred to your name.
The Basic PTT Rates in B.C.:
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1% on the first $200,000 of the purchase price
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2% on the portion between $200,000 and $2,000,000
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3% on the portion over $2,000,000
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An additional 2% on the portion over $3,000,000 (if the property is residential)
Example:
For a $750,000 home:
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1% on the first $200,000 = $2,000
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2% on the next $550,000 = $11,000
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Total PTT = $13,000
That’s a significant chunk, especially when you’re already covering your down payment, closing costs, and moving expenses.
Who Might Be Exempt From Paying PTT?
Luckily, there are a few key exemptions, especially for first-time homebuyers and those buying newly built homes. Here’s a summary of the main ones:
1. First Time Home Buyers’ Exemption
If you’re purchasing your first home, you may qualify for a full or partial exemption.
To qualify:
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You must be a Canadian citizen or permanent resident.
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You’ve never owned a principal residence anywhere in the world.
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You’ve lived in B.C. for at least 12 consecutive months immediately before the date of registration, or filed at least 2 income tax returns in B.C. in the last 6 years.
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The home’s fair market value must be $835,000 or less (as of 2024).
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The land must be 0.5 hectares (1.24 acres) or less.
💡 Partial exemption applies for homes between $835,000 and $860,000.
2. Newly Built Home Exemption
Buying a newly built home (including condos and townhouses) may also qualify you for a PTT exemption.
Requirements:
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The home must be brand new or substantially renovated.
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The purchase price must be $1,100,000 or less (as of 2024).
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You must move into the home and live there as your principal residence.
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The home must be 0.5 hectares or smaller.
💡 Partial exemptions apply for homes priced between $1,100,000 and $1,150,000.
3. Other Exemptions
Some other situations where PTT may be waived or reduced:
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Transfer between family members due to inheritance or divorce
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Transfers related to a marriage breakdown
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Certain transfers involving First Nations individuals or band land
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Transfers to a registered charity
How Do You Claim an Exemption?
When you’re closing on a property, your lawyer or notary will prepare the documents to register your title with the Land Title Office. If you’re eligible for an exemption, they’ll file the necessary paperwork at that time.
I always recommend working with a professional who’s familiar with the details—they can ensure you don’t miss out on a potential tax break.
Final Thoughts
Property Transfer Tax is one of those things that can sneak up on buyers if they’re not prepared. As a mortgage broker, part of my job is to make sure you understand all the costs of buying a home—not just your mortgage payment.
If you’re thinking of buying in B.C. and want to find out if you qualify for a PTT exemption, feel free to reach out. I’m always happy to run the numbers with you and help make sure you’re taking advantage of every possible incentive available.
Have questions about your mortgage options or planning to buy your first home in B.C.? Contact me for a free consultation.