How Much Is Property Transfer Tax in BC?
If you’re buying a home in British Columbia, one of the important costs to understand is the property transfer tax (PTT). This tax applies to most residential properties and is based on the property’s fair market value at the time of purchase. In this guide, we’ll cover everything you need to know about property transfer tax rates, exemptions, additional taxes, and how to estimate your total costs.
Understanding Property Transfer Tax and Fair Market Value
The property transfer tax in BC is calculated as a percentage of the fair market value of the property you’re purchasing. The fair market value is generally the price you pay, or the appraised value if the transaction is non-arm’s length.
The general property transfer tax rates in BC are:
- 1% on the first $200,000 of the property’s fair market value
- 2% on the portion between $200,000 and $2,000,000
- 3% on the portion over $2,000,000
- An additional 2% on residential properties over $3,000,000
It’s important to note the property transfer tax is payable to the land title office when you register the property under your name.
Additional Property Transfer Tax for Foreign Buyers
In addition to the general PTT, the province charges an additional property transfer tax of 20% on residential property transfers to foreign buyers and foreign entities. This tax was introduced to cool the housing market and applies on top of the regular tax.
To avoid surprises, if you are a Canadian citizen or permanent resident, you are exempt from this extra tax. However, if you’re a foreign buyer, this additional tax can significantly impact your purchase cost.
Land Transfer Tax vs Property Transfer Tax
While the terms land transfer tax and property transfer tax are often used interchangeably, BC officially uses “property transfer tax.” Some provinces, like Ontario, use “land transfer tax” to describe a similar charge.
If you are considering a move between provinces, it’s essential to understand these regional differences and how they might affect your budget.
Home Buyers Exemption and First Time Home Buyer Benefits
First-time buyers and some first time home buyers may qualify for a home buyers exemption or partial exemption from property transfer tax, which can save thousands.
Eligibility requirements typically include:
- The property must be your principal residence
- You must be a Canadian citizen or permanent resident
- You have not owned a home in the past two years
If you qualify, you could receive a full exemption on properties up to $500,000 and a partial exemption on properties between $500,000 and $525,000.
You may also be eligible for a land transfer tax rebate offered by regional districts like Metro Vancouver or the Capital Regional District.
Common Exemptions from Property Transfer Tax
Besides the home buyers exemption, other common exemptions include:
- Transfers between spouses or to a common law partner
- Certain family exemptions when transferring property between relatives
- Purchases of purpose built rental properties
- Some transfers involving taxable trustees or for commercial purposes
Make sure to discuss exemptions with your legal advisor to see if you qualify.
How Property Transfer Tax Affects Your Purchase Price
The purchase price or fair market value of the home directly affects how much transfer tax you pay. For example, a home priced at $800,000 would incur:
- 1% on first $200,000 = $2,000
- 2% on next $600,000 = $12,000
- Total PTT = $14,000
This tax is an upfront cost to budget for along with your down payment, legal fees, and title insurance.
Planning Your Budget: Use Our Calculators
The property transfer tax can be a significant upfront expense, but planning ahead helps. Use our helpful tools to understand how this tax fits into your overall housing costs:
- Use the Rent vs Buy Calculator to evaluate whether buying a home, including PTT, makes sense for your finances.
- Use the Home Cost Calculator to estimate your total monthly costs, including mortgage payments, taxes, and other expenses.
Property Transfer Tax in British Columbia Regional Districts
Regional districts in BC such as the Fraser Valley Regional District, Metro Vancouver Regional District, and Capital Regional District may offer specific rebates or exemptions on PTT, especially for first time home buyers or primary residences.
Knowing which rebates apply in your area can help you save money.
FAQs About Property Transfer Tax in BC
Q: How much is property transfer tax in BC?
A: The PTT is 1% on the first $200,000, 2% on $200,000 to $2 million, 3% over $2 million, plus an additional 2% over $3 million for residential properties.
Q: Are there exemptions for first time home buyers?
A: Yes, first-time buyers may qualify for a full or partial exemption on homes up to $525,000.
Q: What is the additional property transfer tax for foreign buyers?
A: Foreign buyers pay an extra 20% tax on residential properties, on top of the regular PTT.
Q: Is property transfer tax refundable?
A: There are limited refunds or rebates, such as the first-time home buyers’ exemption and regional rebates. Otherwise, the tax is generally non-refundable.
Q: When do I have to pay property transfer tax?
A: The tax is paid at the time the property is registered with the land title office.
Understanding how much is property transfer tax in BC and its impact on your purchase price helps you plan effectively and avoid surprises. To get a better sense of affordability, don’t forget to try our Rent vs Buy Calculator and Home Cost Calculator — both designed to help you budget your home purchase including all relevant costs.