BC government increases tax threshold for first time home buyers
A select group of first time home buyers in BC received a gift from the province in the recent budget announcement. If you purchase your first home in BC and it is under $475,000 (full exemption) or $500,000 (partial exemption) you may be able to avoid paying all or part of the BC Property Transfer Tax (PTT). This tax is calculated at 1% of the first $200,000 and then 2% of the remaining purcahse price above $200,000. This change is expected to only impact about 1700 buyers in BC in 2014.
To receive the full exemption 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
and 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
- be 0.5 hectares (1.24 acres) or smaller
You may be eligible for a partial exemption from the tax if the property:
- has a fair market value between $475,000 and $500,000
- is larger than 0.5 hectares
- has another building on the property other than the principal residence
For all the details go to the province’s site here:
The old threshold was set at $425,000 so this is a moderate increase and will help some buyers out that would have missed out on the exemption. The real estate sector has been lobbying with only moderate success for the BC government to increase this threshold for several years. The government seems to have made the smallest change possible while still being able to make this part of their budget highlights announcement.