What you need to know:
If you are purchasing a home in BC it is important to understand property transfer tax, and more specifically if you qualify for an exemption. Here is a breakdown of the qualifications:
First-time home buyer qualifications:
- Are a Canadian citizen, or a permanent resident as determined by Immigration Canada,
- 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 registered the property
- Never owned an interest in a principal residence anywhere in the world at any time, (clients could have owned a rental property, but proof would be required to show that they have never lived in the home at any time throughout the ownership)
- Have not received a first-time home buyers’ exemption or refund.
Please note: You cannot re-qualify as a first-time home buyer. This rule is different for other federal programs for first-time home buyers (e.g. Home Buyers’ Plan).
Property Requirements:
- The fair market value of the property is not more than the qualifying value of $500,000 (only if purchasing an existing home), There is a partial rebate between $500,000-525,000. Anything over the client has to pay the tax.
- The land is 0.5 hectares (1.24 acres) or smaller, and the property must be the principal residence
- New built home exemption- You can also qualify for the exemption by purchasing a newly built home with a fair market value of $750,000 or Less, with partial exemption between $750-800K. You still get this exemption even if you haven’t lived in BC for 12 months.
- First-time homebuyers who have not lived in BC for 12 consecutive months do not qualify for the exemption. However, there are ways to ensure eligibility by pushing the completion date.
As always, ask questions and work with someone you trust!
-Chase