How Much is Property Transfer Tax in BC?

house for saleHousing prices are at all-time highs, and the trend doesn’t appear to be slowing down soon. However, the sticker price, as high as it is, does not represent the total price of purchasing a home. 
To have a realistic view of the costs, whether we're talking about Invermere real estate or property in another part of the country, it is important for prospective buyers to factor in all of the other costs and taxes associated with a home purchase. This includes the additional property transfer tax. 

What is the BC Property Transfer Tax?

Whenever you buy a property in British Columbia, it needs to be registered at the Land Title Office, something that can be done by the property owner themselves, or a lawyer working on their behalf. Once they have submitted a property transfer tax return, a property transfer tax (PTT) must be paid. 
In other provinces, the PTT is referred to as the “land transfer tax.” The property transfer tax paid will depend on the value of your home, whether you’re interested in Radium Hot Springs homes for sale, Windermere homes for sale, or somewhere else in the province

What is the property transfer tax based on?

The property transfer tax - not to be confused with annual property taxes - is based on the fair market value of the property on the day it was registered with the Land Title Office. New property owners must pay a 1% tax on the first $200,000 in value, and 2% on any value above $200,000 and below $2,000,000. 

Property transfer tax example

Assuming full ownership, if you buy a house for a total purchase price of $1,000,000, you will need to pay:
  • 1% of $200,000 ($2,000) + 2% of the remaining $800,000 ($16,000)
  • $2,000 + $16,000 = $18,000 

Any value over $2,000,000 is taxable at 3%. 

What if I share the home purchase with someone else?

If, for example, a husband and wife purchase a home together and both have 50% ownership, each will owe 50% of the tax. 

Are there any property transfer tax exemptions?

house for sale
There are a few circumstances that allow you to qualify for an exemption and reduce your tax bill, and you may be eligible for a property transfer tax exemption in the following cases.

First time home buyers program

The First Time Home Buyers Program is available to those that meet minimum criteria. To qualify, you must be a Canadian citizen or permanent resident, and you must have lived in BC for at least a year OR have filed BC tax returns twice in the last six years. In addition, you must have never owned a registered interest in a property that was your principal residence anywhere in the past, and must not have taken advantage of the program in the past. 
The property must also have a fair market value of no more than $500,000, be 0.5 hectares (or 1.24 acres) or less, and only be used as your principal residence. Property owners that don’t meet all the criteria can qualify for a partial exemption if the property is worth less than $525,000 but sits on more than 0.5 hectares of land and has another building on it other than the principal residence.

Newly built home exemption

If you’ve just purchased a newly built home, you may qualify for an exemption to the property transfer tax. BC residents can consult this guide for more information

Other exemptions

There are a number of land transfer tax exemptions available to Canadians and permanent residents that can reduce their total property transfer tax burden. Please consult this page for a complete list and more detailed information. 

How can I estimate my upcoming tax bill?

To estimate the total amount of your expected BC property transfer tax bill, you can use a property transfer tax calculator here, on the BC government website. 

Do foreign buyers have to pay the same tax?

To discourage speculation in the housing markets and keep rising housing prices for Canadians under control, the government instituted a 15% PTT in 2017 for all foreign buyers. The PTT increased to 20% in 2018, and all properties registered after February of 2018 must pay the new PTT price. However, foreign nationals who have work permits from the BC Provincial Nominee Program are exempt from this additional tax.

When must I pay the PTT?

When the real estate purchase is officially completed, the buyer incurs the property transfer tax. The seller doesn’t need to pay anything. 

Do I have to pay the PTT if I inherited the property?

When there is no monetary exchange, like in the case of an inheritance, the amount of PTT will not be calculable based on the fair market value, since no price was attached to the acquisition of the property. 
However, once an appraisal report created by a third-party appraiser is completed, the PTT (or some portion of it) must be paid. That said, inheritances are subject to some of the PTT exemptions mentioned above, and can be reviewed here.

What happens if I don’t pay the property transfer tax?

If you fail to pay the taxes you owe, or if you intentionally entered incorrect information to artificially lower your tax bill, you can be penalized. Penalties can be severe, including having to pay double the original taxable amount, an additional interest penalty, and even face a fine of up to $100,000 plus two years in prison. 
Bottom line: pay your taxes, it’s not worth it to try to pull something sneaky!