NEW 2016 BC Property Transfer TAX Rules - EXPLAINED

(February 23, 2016 )

THE BC HOME HUNTER GROUP METRO VANCOUVER I FRASER VALLEY I BC YOUR URBAN & SUBURBAN REAL ESTATE EXPERTS 604-767-6736 WE SELL REAL ESTATE - DIFFERENTLY! Whether your a Metro Vancouver, Fraser Valley or BC Home Hunter our BCHH real estate experts know your way home. You’ve noticed we’re different. We specialize in you. #Vancouver #WhiteRock #SouthSurrey #WestVancouver #Langley #MapleRidge #NorthVancouver #Langley #FraserValley #Burnaby #FortLangley #PittMeadows #Delta #Richmond #CoalHarbour #Surrey #Abbotsford #FraserValley #Kerrisdale #Cloverdale #Coquitlam #EastVan #Richmond #PortMoody #Yaletown #CrescentBeach #Clayton #MorganCreek #FraserValleyHomeHunter #VancouverHomeHunter #OceanPark #MorganHeights #GrandviewHeights #LynnValley #Kitsilano #bchomehunter #vancouverhomehunter #fraservalleyhomehunter #northvancouverhomehunter #whiterockhomehunter #langleyhomehunter #fortlangleyhomehunter #westvancouverhomehunter #pittmeadowshomehunter #burnabyhomehunter #coquitlamhomehunter #deltahomehunter #mapleridgehomehunter  #portmoodyhomehunter  #surreyhomehunter #southsurreyhomehunter #morganheightshomehunter #abbotsfordhomehunter #squamishhomehunter #whistlerhomehunter #portcoquitlamhomehunter #yaletownhomehunter #eastvancouverhomehunter #chilliwackhomehunter #okanaganhomehunter #islandhomehunter #canadianhomehunter #canadahomehunter #604life

Here it is folks, the definitive explanation of the BC Property Transfer Tax Changes.

NEW Property Tax Rules - ANSWERS
The following is a BCHH Update on the New PPT Rules!

A quick update below on the recent changes to the latest budget regarding the PTT:

1. How do these changes affect first time buyer exemptions?
First time home buyer exemption limits have NOT changed.

2. If a buyer purchases a home worth $770,000 is there a partial exemption?

All buyers (whether first time buyers or not) no longer pay PTT on purchases of NEW homes up to $750,000

in value; note a buyer must be a Canadian citizen or a permanent resident; there is a partial exemption

for homes between $750,000.00 and $800,000.00;

3. How does the 3% tax get applied?
PTT has changed so that there is now a 3% tax on amounts over $2,000,000.00. The 3% tax is ONLY paid

on the amount over $2,000,000.00, not the full price.

4. When are these changes effective?
These changes are effective on all deals closing now and going forward.

5. How is the government going to monitor the 1 year occupancy detail?
As with the FTHB exemption, the Ministry will send a letter to the purchaser at the end of the year to

confirm compliance.

6. If your a first time buyer and purchase a $550,000 used

(not new) property, do you still pay

Property Purchase Tax?
YES, the $475,000 limit remains the same for first time home

buyer’s first property purchase. The first

time home buyer's exemption values remain as they were.

7. How do these recent changes apply for sales/contracts already

in place that have not completed yet?
The new amendments to the Property Transfer Tax Act deal

only with the registration date and not the date

of the contract.

8. For the New Housing Exemption of $750,000, is there any portion over $750,000 subject to 1%, or does it

start at 2% on the portion over $750,000 – much like the first time home buyer exemption?
A partial exemption is available where the fair market value is over $750,000 but less than $800,000. If

the price is $800,000 or more, Property Transfer Tax is payable on the entire price. So if the price is

$801,000, Property Transfer Tax applies on the entire amount, not just the last $1,000.

9. Does this apply to commercial property purchases?
YES it does! This is significant, as many commercial/industrial/office buildings are valued quite high. There

is a 3% tax on the value over $2,000,000.00 on these buildings.

10. Is the exemption based on the pre-GST or net purchase price, or the purchase price including GST?
Your real estate lawyer will back out the GST from the price so that Property Transfer Tax is calculated

on the net price, which must be under $750,000 for the full exemption.

11. Can a Buyer qualify for the First Time Home Buyer Exemption or the New Housing Exemption even if

they move here from another province?
The First Time Home Buyer Exemption applies if the Buyer is either a Canadian citizen or

permanent resident AND have lived in B.C. for 12 consecutive months immediately before the date they

take ownership of the property, or they have filed at least 2 income tax returns as a B.C. resident in the

last 6 years. For the New Housing Exemption the Buyer must be an individual and either a Canadian

citizen or permanent resident.

THE BC HOME HUNTER GROUP Thank you for your #MorganCreek, #SouthSurrey referral Ash! #WhiteRock #Langley #Vancouver

Note the difference, for the First Time Home Buyer Exemption

there is a residency in B.C. requirement

but not for the New Housing Exemption.

12. Does the New Housing Property Transfer Tax Exemption

apply to all real estate purchases whether they

are principal residence or investment?
These exemptions ONLY apply to principal residence; full

Property Transfer Tax applies to investment properties.

13. How does this "equal to or smaller than.5 hectare" rule work with attached properties?
The attached property must be equal to or less than .5 hectacres; this is not usually an issue with

attached properties.

14. On a property over $2,000,000, is the Property Transfer Tax 1% on the first $200,000 and the remaining

is now 3% instead of 2%?
NO, it is 1% on the first $200,000, 2% on values over $200,000 up to $2,000,000, and 3% on any value

over $2,000,000. The change applies when the sale reaches $2,000,000 it will be 3% on the value

over $2,000,000.

15. (Example) If I am selling a newly constructed work/live townhouse in the lower mainland. Retail space is on

the main floor, they are separate strata's but sold as one unit. Assuming the buyer is living in the

property do you know if they will get the Property Transfer Tax waived even though the main floor

is retail space?

If they are strata's the Property Transfer Tax is based on individual units and their values. There will be

an exemption for the townhouse that is a principal residence, but not on the retail portion.

12. Is the below calculation correct with the new rules?
Yes! See the following example:
PTT amount x ($800,000 - purchase price)
$50,000 (the dif. between $800K and $750) = X

Then:
PTT amount - X = Partial exemption amount

So the following would apply on a $759,900 Sale Price:
$13,198 x ($800,000 - $759,900)
$50,000 = $10,584.40 (savings)

$13,198 - $10,584.40 = $2,613.60 partial exemption amount

Our team of real estate experts at The BC Home Hunter Group hope we have answered at least some of

the pressing and immediate questions you might have regading these significant tax changes. If you or anyone you know are considering the purchase or sale of your home or any B.C. real estate don't hesitate to call or text Mandeep, Robert, Kritisha or Vesna anytime 604-767-6736.

blog comments powered by Disqus

NEW 2016 BC Property Transfer TAX Rules - EXPLAINED

Categories

Archives