If you're buying your first home in British Columbia, you've probably heard about the Property Transfer Tax (PTT). This is a tax you pay to the provincial government when you purchase property. It is separate from your down payment and it cannot be part of your mortgage. For many first-time buyers, it can be an unexpected expense.
Here's how PTT is calculated:
- 1% on the first $200,000 of the home's price
- 2% on the portion between $200,000 and $2 million
- 3% on anything above $2 million
For example, if you're buying a $600,000 condo, your PTT would be approximately $10,000. That's a significant amount!
The Good News:
As a first-time home buyer, you might be eligible for a PTT exemption.
Effective April 1, 2024, if your home has a fair market value of $835,000 or less, you may qualify for a full or partial exemption. Specifically:
- Full exemption on the first $500,000 of the purchase price
- Partial exemption for homes valued between $835,000 and $860,000
To qualify, you must:
- Be a Canadian citizen or permanent resident
- Have lived in BC for at least one year immediately before the registration date (typically the completion date)
- Have never owned a principal residence anywhere any time in the world
To continue to qualify after completion, you must:
- Move into the home within 92 days of the registration date
- Continuously occupy your home for at least one year from the registration date
For detailed information on eligibility and application, visit the First Time Home Buyers' Program page on the BC government's website.
Navigating these exemptions can be complex, but they can save you thousands of dollars. If you're unsure about your eligibility or how to apply, consulting with a notary public can provide clarity and ensure you don't miss out on potential savings.