Property Transfer Tax is applicable on the purchase or transfer of property in British Columbia. Exemptions may apply for First Time Buyers. Please read the two guides below: Property Transfer Tax - General, and Property Transfer Tax - First Time Buyer to learn more about PTT and to determine whether or not you are eligible for an exemption.
Property Transfer Tax - General
Ministry of Finance Tax Bulletin
ISSUED: January 2000 REVISED: April 2009 Bulletin PTT 001
www.fin.gov.bc.ca/rev.htm
This bulletin has been completely rewritten and replaces the previous version date July 2008.
PO Box 9427 Stn Prov Govt Victoria BC V8W 9V1
Property Transfer Tax Property Transfer Tax Act
Are you purchasing or acquiring an interest in real property? Do you need to know how to calculate property transfer tax? This bulletin provides information to help you understand the property transfer tax (PTT) and how it applies when you acquire an interest in real property. For information on property transfer tax exemptions, please see Bulletin PTT 003, Property Transfer Tax Exemptions.
Table of Contents
What is PTT .......................................................................................1
When You Pay and File a PTT Return ..........................................2
Fair Market Value ............................................................................3
Calculating PTT ................................................................................4
PTT Exemptions ...............................................................................5
What is PTT
PTT is a registration tax that you pay when you acquire a registered interest in property at the Land Title and Survey Authority of British Columbia (land title office). PTT is based on the fair market value of the property that is being transferred whether or not money changes hands, including transfers of property between a corporation and its shareholders, gifts of property and land exchanges.
However, some transfers may qualify for a PTT exemption, such as a transfer of a principal residence to a related individual or a transfer to a surviving joint tenant. For information on exemptions, please see the section below, PTT Exemptions. Please note: PTT is different than the annual property taxes that you pay to your municipality or to the province.
When You Pay and File a PTT Return
PTT is payable by the purchaser/transferee when a taxable transaction is registered at the land title office. You are a purchaser/transferee when you:
„X acquire a registered interest in a property,
„X gain a greater (additional) registered interest in a property, or
„X become a registered holder of a lease, a life estate or a right to purchase that is registered against a property.
A taxable transaction is any transaction registered at the land title office that requires a PTT return to be filed. The following are examples of taxable transactions:
„X transfers of legal title (e.g. the purchase of a home and registration in your name),
„X rights to purchase (agreements for sale),
„X leases and lease modification agreements,
„X life estates,
„X foreclosures,
„X property transfers as a result of corporate reorganizations,
„X estates, forfeitures or quit claims, and
„X Crown grants.
For each taxable transaction registered at the land title office, you complete one of the following three PTT returns.
1. If you are paying PTT, you complete the General Property Transfer Tax Return form (FIN 579G).
2. If you qualify for the First Time Home Buyers¡¦ Program, you complete the First Time Home Buyers' Property Transfer Tax Return form (FIN 269).
3. If you qualify for any other exemption, you complete the Special Property Transfer Tax Return form (FIN 579S).
You or your representative, such as a lawyer or notary public, must complete and file the return at the land title office. Regardless of who completes the return, you, as the purchaser/transferee, must sign the certification portion. Most lawyers and notaries have a supply of the returns. You can also obtain the returns from any land title office, Service BC Centre or from the ministry. If your representative is filing your return, they may complete the transaction and pay PTT using the electronic filing system. For more information on the electronic filing system, please see the land title office website at www.ltsa.ca/electronic-filing-system You can also pay PTT by cash, cheque or money order (payable to the Land Title and Survey Authority of British Columbia). If you do not pay PTT at the time of registration, the land title office may refuse to register the transaction.
Fair Market Value
You pay PTT on the fair market value of the property at the time you register the transfer at the land title office. The fair market value is the price that you, as a willing purchaser, would pay to a willing seller in the open market. An open market is where property is offered for sale so that anyone interested in purchasing the property has an opportunity to make an offer. For example, a seller lists a property with a realtor or advertises it for sale. You purchase and register the property within a few months after the sales contract is signed. In this case, the purchase price you paid for the property is the fair market value.
If you register the property more than a few months after you have signed the sales contract or if the sale was not an open market transaction, you will need to determine if the purchase price is considered the fair market value. For example, you may use the current property valuation provided by BC Assessment or a recent independent appraisal to help you determine the fair market value. For some transactions, the BC Assessment value will not provide you with a current fair market value. This is because the BC Assessment value is based on market conditions at July 1 of the previous year. For example, the 2008 BC Assessment value is based on market values as of July 1, 2007.
Please note: The 2009 BC Assessment values are based on the lower of the 2008 or 2009 value. This means you may need a more recent valuation, such as an independent appraisal, to support the fair market value of the property. The following are examples of when the BC Assessment value is not acceptable and you may need an independent appraisal to support the fair market value.
„X There have been changes to the property since the BC Assessment value was determined, such as trends in the local area, addition of services, partial/new construction or rezoning.
„X The land has been classified as a farm by BC Assessment.
Land and Improvements
You pay PTT on the fair market value of the property, which includes land and any improvements to the land. This is because land means any interest in land, including any right, title, estate or tenure, with all buildings and houses. The following are examples of common improvements to land that are included in the fair market value of the property:
„X houses,
„X manufactured or modular homes,
„X garages,
„X sheds or other outbuildings,
„X paving, such as a driveway,
„X utilities, such as sewer, and
„X timber.
Calculating PTT
You pay PTT on the fair market value of the property at the rates listed below.
Fair Market Value
Tax Rate
$200,000 or less
1% of the fair market value
Over $200,000
1% of the fair market value up to $200,000, plus 2% on the portion of the fair market value greater than $200,000
Example 1 ¡V Fair Market Value $150,000 1% on $200,000 or less = $150,000 X 1% = $1,500 The PTT payable is $1,500 Example 2 ¡V Fair Market Value $350,000 1% on $200,000 or less = $200,000 X 1% = $2,000 Plus 2% on portion greater than $200,000 = ($350,000 - $200,000) X 2% = $150,000 X 2% = $3,000 The PTT payable is $2,000 + $3,000 = $5,000
PTT Exemptions
There are a number of exemptions from PTT. Please see the following bulletins for information on the more commonly claimed exemptions:
„X Bulletin PTT 003, Property Transfer Tax Exemptions
„X Bulletin PTT 004, First Time Home Buyers¡¦ Program
„X Bulletin PTT 005, Exemptions for the Transfer of a Principal Residence
„X Bulletin PTT 006, Exemptions for Transfers in the Course of Subdivision
„X Bulletin PTT 007, Exemptions for the Transfer of a Recreational Residence
For more information on PTT and other exemptions, please see the bulletins on our website at www.sbr.gov.bc.ca/business/Property_Taxes/Property_Transfer_Tax /bulletins_notices.htm
Need more info?
Property transfer tax website: www.sbr.gov.bc.ca/individuals/Property_Taxes /Property_Transfer_Tax/ptt.htm Telephone (Victoria): 250 387-0604 Service BC (In Vancouver): 604 660-2421
The information in this bulletin is for your convenience and guidance and is not a replacement for the legislation. The Property Transfer Tax Act and Regulations are on our website at Service BC (Elsewhere in BC): 1 800 663-7867 E-mail: PTTENQ@gov.bc.ca
www.sbr.gov.bc.ca/individuals/Property_Taxes/Property_Transfer_Tax /legislation.htm References: Property Transfer Tax Act, Sections 1, 2, 3, 13, 13.1 and 13.2, and Regulations 1 and 2.
Property Transfer Tax - First Time Buyer
Ministry of FinanceTax Bulletin
ISSUED: March 1994 REVISED: August 2011 Bulletin PTT 004
www.fin.gov.bc.ca/rev.htm
This bulletin has been completely rewritten and replaces the previous version dated October 2009.
PO Box 9427 Stn Prov Govt Victoria BC V8W 9V1
First Time Home Buyers¡¦ Program Property Transfer Tax Act
Do you need to know if you are eligible for the property transfer tax exemption for first time home buyers? Do you understand the requirements to remain eligible for this tax exemption after you purchase and register your property?
This bulletin provides specific tax information to help first time home buyers understand the eligibility requirements for the First Time Home Buyers¡¦ Program.
For general property transfer tax information, such as the types of transactions that are taxable, the rate of tax, what returns must be completed, and who must complete the return and pay the tax, please see Bulletin PTT 001, Property Transfer Tax.
Table of Contents
Eligibility Requirements for the
First Time Home Buyers¡¦ Program................................................1
How do I Apply for the Exemption
or a Refund? ......................................................................................3
Requirements During the First Year
the Property is Owned.................................................................... 4
Eligibility Requirements for the First Time Home Buyers¡¦ Program
The First Time Home Buyers¡¦ (FTHB) Program provides a property transfer tax exemption at the time title to property is transferred to an eligible first time home buyer. If you are purchasing your first home, you may qualify for this exemption if you are a first time home buyer and your property meets certain requirements. These requirements are outlined below.
First Time Home Buyer Qualifications
You qualify as a first time home buyer if:
„X you are a Canadian citizen, or a permanent resident as defined by the Immigration and Refugee Protection Act (Canada),
„X you have lived in British Columbia for 12 consecutive months immediately before the date you register the property, or you have filed 2 income tax returns as a British Columbia resident during the 6 years before the date you register the property,
„X you have never owned an interest in a principal residence anywhere in the world at any time (a principal residence is the usual place where an individual lives), and
„X you have never received a first time home buyers¡¦ exemption or refund.
Please note: You cannot re-qualify as a first time home buyer. This rule may be different from other federal programs for first time home buyers (e.g. the Canada Revenue Agency Home Buyers¡¦ Plan).
Property Requirements
You qualify for a full exemption if:
„X the fair market value of the property (land plus improvements) is not more than the qualifying value of $425,000 (only if purchasing an existing home),
„X the land is 0.5 hectares (1.24 acres) or smaller, and
„X the property will only be used as your principal residence.
Please note: If there is more than one purchaser and not all purchasers qualify for the exemption, only the percentage interest acquired by the first time home buyer(s) is eligible.
Partial Exemptions
You qualify for a partial exemption if:
„X the property has a fair market value of up to $25,000 more than the qualifying value of $425,000 (only if purchasing an existing home),
„X the land is larger than 0.5 hectares (only 0.5 hectares of the land are eligible), or
„X a portion of the improvements on the land is used for commercial purposes or there is a separate dwelling on your land (only the principle residence portion is eligible).
For examples of how partial property transfer tax exemptions are calculated, please see the First Time Home Buyers¡¦ Program ¡V Example Calculations.
How do I Apply for the Exemption or Refund?
You apply for the exemption by submitting a First Time Home Buyers¡¦ Property Transfer Tax Return (FIN 269) and other required land title documents when you register your property at the land title office. Generally, a lawyer or notary public registers your property and applies for the exemption on your behalf. The land title office then sends your application to the ministry to verify your eligibility.
Lawyer or Notary Public
If you are a lawyer or a notary public, you can either file a paper version of the First Time Home Buyers¡¦ Property Transfer Tax Return (FIN 269) at the land title office or file an electronic version. To order a paper supply of the FTHB property transfer tax return, please e-mail PTTENQ@gov.bc.ca You can file the electronic version if you have been approved to file electronic documents at the Land Title and Survey Authority (LTSA). For more information on electronic filing, please see the LTSA website.
For assistance with filing the electronic version of the tax return, please see the Instruction Guide for Completion of General, Special and Electronic Property Transfer Tax Returns (FIN 579 Guide), or contact the ministry. When filing the electronic version of the return, you must also ensure that a paper copy of the return has been signed by the homebuyer and is retained by your firm.
Individual Homebuyer
If you apply for the exemption yourself, you can view a sample of the First Time Home Buyers¡¦ Property Transfer Tax Return (FIN 269) on the ministry¡¦s website. Most law firms and notaries have supplies of the tax return, or you can obtain one from any land title office or Service BC Centre. You file the completed tax return together with the appropriate land title forms at a land title office. You must ensure that you sign the FTHB property transfer tax return before submitting it.
For assistance with completing the FTHB tax return, please contact the ministry.
Refunds
You may apply for a refund of the tax if:
„X you met all the requirements to qualify for the exemption (see above), but you did not apply for the exemption at the time of registration, or
„X you became a Canadian citizen or a permanent resident within 12 months of the registration date and, on the registration date, you met all the other qualifications for the exemption.
You must apply for a refund within 18 months of the date your property transfer is registered at the land title office. To obtain a refund application form, please contact
the ministry.
Penalty for False Declaration
To ensure you are eligible, your application for the exemption or refund is reviewed to verify eligibility.
If you are claiming an exemption or refund, you may be charged an amount equal to double the tax (the tax you owe plus a penalty equal to the exemption or refund you claimed) if you falsely declare:
„X that you have never owned an interest in a principal residence anywhere in the world at any time, or
„X that you have never received a BC first time home buyers¡¦ tax exemption or refund.
Requirements During the First Year the Property is Owned
The ministry will send you a letter at the end of the first year you own the property to confirm that you meet the requirements for occupancy and property value (if building a new home), as set out below.
Occupancy
If you purchase an existing home, you must move into the home within 92 days of the date you register title to the property.
If you purchase vacant land, you must build and move into your new home within 1 year of the date you register title to the land.
You must continue to use the property as your principal residence for the remainder of the first year. You may retain part of the exemption if you move before the end of the first year.
First Time Home Buyers¡¦ Program Page 5 of 5
Exceptions
Two exceptions to the occupancy requirement are:
1. if your death occurs before the end of the first year you own the property, or
2. if your property is transferred as a result of a separation agreement or a court order under the Family Relations Act.
Property Value (only if building a new home)
If you are building a new home, the fair market value of the land (as of the date you register the property), plus the cost to build the home, cannot exceed $450,000.
Need more info?
Property transfer tax website: www.sbr.gov.bc.ca/individuals/Property_Taxes /Property_Transfer_Tax/ptt.htm
Telephone (Vancouver): 604 660-2421
Telephone (Victoria): 250 387-0604
Toll free in British Columbia: 1 800 663-7867 (request a transfer to 250 387-0604)
Fax: 250 953-3094
E-mail: PTTENQ@gov.bc.ca
The information in this bulletin is for your convenience and guidance and is
not a replacement for the legislation. The Property Transfer Tax Act and Regulations
are on our website at www.sbr.gov.bc.ca/individuals/Property_Taxes
/Property_Transfer_Tax/legislation.htm
References: Property Transfer Tax Act, Sections 4, 5¡V13, 13.1, 13.2, 17, 18, and Regulations 1 and 2