When you are purchasing a home in BC you may be required to pay property transfer tax.
Property transfer tax is calculated as:
1% on the first $200,000 and 2% on the remaining balance.
If your purchase price is $750,000 you will pay $13,000 in property transfer tax.
(1% of 200,000 = $2,000) + (2% of $550,000 = $11,000) = $13,000
There is an exemption for first time home buyers, however you must meet a few key criteria:
- The purchase price/value of the property must be below $475,000.
- You must not have previously owned a principle residence.
- You must live in the property for one year as your principle residence.
- You must be a Canadian citizen or a permanent resident.
- You must have lived in BC for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a BC resident in the last 6 years.
This cost must be paid to your lawyer on the closing date of your property purchase.
You have to have this money in order to buy property in BC. You cannot defer it, owe it, get a loan for it. You have to physically have it.
For more information on property transfer tax or other costs associated with buying your home, please call or email me.