REAL ESTATE NEWS: Property Transfer Tax Exemption Increased to $500,000
Finance Minister of BC Mike De Jong just announced that the property transfer tax exemption for first time home buyers would increase from a purchase price of $475,000 to $500,000. First time home buyers will now have the opportunity to obtain a full exemption of up to $8000 rather than the previous $7500 in savings. In his speech on February 21, 2017 regarding BC’s budget, De Jong stated that the First Time Home Buyers Program has helped close to 5,500 families save an average of $7,600 since it was introduced in 2016.
This change is effective for properties that complete after February 22, 2017. All properties that complete prior to February 22, 2017 will still be subject to the maximum purchase price of $475,000 for the full exemption.
The British Columbia Real Estate Association (BCREA) has recommended to the government during their budget consultation in January that the first-time home buyer exemption should be raised almost double its original to $750,000. This would align with current guidelines already in place, such as the newly-built home exemption and the BC Home Partnership (FTHB loan program) which max out at $750,000. The government’s decision to increase the current PTT exemption to $500,000 is a step closer to alignment across the board for all program’s limits. Only time will tell if they will increase it further.
For more details on property transfer tax, refer to our blog post on “Everything You Need to Know about PTT” by clicking here.
For more details from the government website, click here.
To reiterate the qualifications for the first time home buyers program in BC when it comes to property transfer tax exemptions, read below.
First Time Home Buyers’ Program
To help enter in to the market, the first time home buyer’s (FTHB) program gives an exemption to the property transfer tax in the case that you can qualify. There are partial exemptions, but to qualify for a full exemption you must:
- be a Canadian citizen or permanent resident;
- have lived in BC for 12 consecutive months before the date the property is registered; or
- have filed 2 income tax returns as a BC resident in the last 6 years;
- have never owned an interest in a principal residence anywhere, anytime; and
- have never received a first time home buyers’ exemption or refund.
- The property must be used as a principal residence and have a fair market value of $475,000 (if registered on or before February 21, 2017) or $500,000 (if registered on or AFTER February 22 2017) or less and be 0.5 hectares (1.24 acres) or smaller. You may still qualify for a partial exemption if the property has a fair market value of:
- $500,000 if registered on or before February 21, 2017, or
- $525,000 if registered on or after February 22, 2017
If you’re a first time home buyer and have questions about the market, your qualifications, and/or what you can afford, then give us a call at 604-765-0376, text at 604-319-0200, or email firstname.lastname@example.org for more details.
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