Carol Palfrey Associate Broker " The Eastside is my Neighbourhood "

1 (604) 818-7422
Carol Palfrey Associate Broker
Cell:1 (604) 818-7422
Office :1 (604) 263-1911

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PTT AND FIRST TIME BUYER'S INFORMATION

 

Use our Property Transfer Tax Calculator. Click here

 

What is it?

The Property Transfer Tax is a tax payable to the Provincial Government by purchasers of real estate. The tax applies to all types of real estate, whether residential, commercial or industrial.

 

How is it calculated?

The amount of the Property Transfer Tax is 1% on the first $200,000.00 of the property’s fair market value, 2% on the amount between $200,000 and $2,000,000, and 3% of the remaining fair market value.

 

For example, if the fair market value of the property is:

$200,000.00, the tax payable would be $2,000.00 (1% of $200,000.00).

$800,000, the tax payable would be $14,000 (1% on the first $200,000.00 = $2,000.00 and 2% on the remaining $600,000.00 = $12,000.00)

$2,400,000, the tax payable would be $50,000 (1% on the first $200,000.00 = $2,000.00, 2% on $1,800,000) = $36,000, 3% on $400,000 = $12,000)

 

 What is Fair Market Value?

“Fair Market Value” is best described as the price that would be paid for a property on the open market (which is usually the actual purchase price paid for the property).

 

How does a buyer qualify for the First Time Home Buyers Exemption?

To qualify as a First Time Home Buyer and avoid paying the PTT, the following criteria must be met:

  • Purchaser must never have owned an interest in a principal residence anywhere in the world at any time;
  • Purchaser must be a citizen of or a permanent resident of Canada;
  • Purchaser must have resided in B.C. for 12 consecutive months immediately before the date they become the registered owner, or the Purchaser has filed two income tax returns as a British Columbia resident within the prior 6 years of becoming the owner;
  • To obtain full exemption, the purchase price must not exceed $475,000.00. A partial exemption is available for homes between $475,000.00 and $500,000.00;
  • Purchaser must move into the property within ninety-two days after registration of the purchase of the property and reside in the property for at least one year;
  • Pro rata exemption where property exceeds .5 hectares or a portion of the property is not residential (i.e. commercial lofts) – purchase price of entire property must not exceed the price limitations.

 

How does a buyer qualify for the Newly Built Home Exemption?

To qualify for the Newly Built Home Exemption and avoid paying the PTT, the following criteria must be met:

  • The property must be newly built, as defined in the legislation
  • The Buyer must be an individual (may not be in a company name, trust, etc.)
  • The Buyer must be a Canadian citizen or permanent resident
  • The property must used as the principal residence of the Buyer, who must move into the property within ninety-two days after registration of the purchase of the property and reside in the property for at least one year;
  • To obtain a full exemption, the purchase price must not exceed $750,000.00. A partial exemption is available for homes between $750,000.00 and $800,000.00;
  • The property must be 1.24 acres or smaller.

 

Are there other exemptions?

Yes, such as a transfer of a principal residence between family members. For details on this and other exemptions, go to http://www.rev.gov.bc.ca/RPT/ and pick the “Property Transfer Tax” button located on the right hand side on this screen.

 

Property Transfer Tax should not be confused with Property Tax. The Property Transfer Tax is a one time tax paid to the Provincial Government by purchasers of real estate. The Property Tax is the tax paid on an annual basis to the local City/Municipality.

 

Please remember that the Property Transfer Tax Act may frequently change along with the exemptions for payment of this Tax. While we try to keep our website up to date as much as possible, please do not rely upon the information without talking to one of our lawyers.

 

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The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice regarding your own situation.

 

Copyright © 2016 by The Spagnuolo Group of Real Estate Law Firms. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.

What is Title Insurance? 

 

Unlike house insurance that insurers your home's structure and its contents, title insurance protects the title to your property against losses incurred as a result of undetected or unknown title issues such as: 

  1. Fraud (fraudulently obtained mortgages on your home) - There is little protection when a mortgage is fraudulently registered against your property unless you have title insurance. And given the fact that restoring title to a property can take a significant financial and emotional toll on the homeowner, title insurance covers all your legal expenses related to restoring title 
  2. Errors in surveys 
  3. Encroachments onto neighbouring properties 
  4. Zoning infractions 
  5. Many more known and unknown defects that could affect your ability to mortgage or sell your property in the future 

For a one-time premium, title insurance provides you with coverage for as long as you own the property. Most lenders require title insurance.

 

Source: First Canadian Title



What is a Portable Mortgage? 

 

A portable mortgage gives you the option to take your mortgage to another property. So even if mortgage rates have risen by the time you move on, you'll still be paying today's low mortgage rate on your next home. On top of that, you avoid any prepayment penalty when you sell your current home. 

 

A portable mortgage gives you the option, but that doesn't mean you have to use it. 

 

You want to "port" your mortgage if: 

  • You have a good mortgage rate with a number of years remaining on your term and/or 
  • You want to avoid paying a prepayment penalty on your existing mortgage 

You're better off getting a new mortgage if: 

  • You want to take a product that is not offered by your current lender 
  • You qualify for mortgage terms that are much better than the porting mortgage (but remember to account for the prepayment penalty)

Source: rew.ca/news

Links/Resources

The Internet is a valuable resource in the home buying or selling process. Here are some personal suggestions to help you on the road to success!

I've searched the Internet and compiled a list of resources I think will be helpful as you set out to buy or sell a home. Please take some time to browse. And feel free to contact me any time with questions or suggestions. I'd love to hear from you!