First Time Homebuyer’s Property Transfer Tax Exemption

I find that there is a lot of confusion out there about what the Property Transfer Tax (PTT) is and who has to pay for it. With that in mind, I thought that I would try and clarify a few things.

The PTT is a tax imposed by the Provincial government on all transactions of property. The PTT should not be confused with Property Tax. PTT is a one time tax paid to the Provincial Government by the purchaser of real estate. Property Tax, on the other hand, is a tax paid annually to the local municipality. The PTT is 1% on the first $200,000 and 2% on the balance.

This tax is not imposed on EVERY transaction, however. Under particular circumstanes, First Time Homebuyers are exempt from paying this tax.

How can you qualify for an exemption? Good question…

1. You must be a Canadian citizen or permanent resident of Canada.
2. You must be the purchasing a principal residence.
3. You must not have previously owned an interest in real estate anywhere in the world.
4. You must have resided in the province of B.C. for at least one year (12 consecutive months) immediately prior to the application to register the purchase of the principal residence.
5. The maximum purchase price that will qualify for the exemption in Vancouver is $375,000 (A partial exemption is available for homes between $375,000.00 and $400,000.00).
6. Your down payment cannot exceed 30% of the purchase price (you must borrow at least 70% of the value of the property).
7. You will lose the tax exemption if you pay over $13,000 towards the principal of your mortgage within the first year.
8. The term of your mortgage must be at least one year.
9. The purchaser must occupy the property as their principal residence within 92 days of completion.
10. Other conditions do apply (review them here).

There are some other exemptions (aside from the one for First Time Homebuyers), such as the transfer of a principal residence within a family. You can review the BC Government’s handout on the First Time Homebuyer’s Exemption here.

Another good resource for more information is your lawyer or notary. I can provide you with reputable contact if you do not yet have one of your own.

More Info for Vancouver First Time Home Buyers

Are you a first time home buyer? Finding it hard to get the information that you need to make an informed decision in today’s real estate market? You’ll find the resources that you need tailored for you, the Vancouver First Time Home Buyer here.

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