Victoria BC Real Estate News Bulletin

Good News for first time home buyers. In yesterdays Provincial Budget the BC Government announced they have increased the home purchase price ceiling to $425,000.

See First time home buyers revised exemption outlined below.

 

PROPERTY TRANSFER TAX AND

THE FIRST TIME HOME BUYERS' PROGRAM

February 2008

Property Transfer Tax

You pay property transfer tax each time you register a property at the land title office.

The First Time Home Buyers' Program

If you are purchasing your first home, you may qualify for an exemption from property transfer tax

if certain requirements are met.

WHAT ARE THE REQUIREMENTS?

Purchaser

You qualify for the exemption if:

􀂃 you are a Canadian Citizen, or a permanent resident as determined by Immigration Canada,

􀂃 you 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 register the property,

􀂃 you have never owned an interest in a principal residence anywhere in the world at anytime,

and

􀂃 you have never received a first time home buyers' exemption or refund.

Property

The property you purchase qualifies if:

􀂃 the fair market value of the property is not more than the current threshold of $425,000,

􀂃 the land is 0.5 hectares (1.24 acres) or smaller, and

􀂃 the property will only be used as your principal residence.

If the property does not meet all of these requirements, you may still qualify for a partial

exemption.

HOW DO I APPLY FOR THE EXEMPTION?

You apply for the exemption when you register the property at the land title office.

Generally, a lawyer or notary public registers the property and applies for the exemption on your

behalf.

The land title office sends your application to the Ministry of Small Business and Revenue to

verify your eligibility.

Make sure you do not apply for the exemption if you have owned an interest in a principal

residence anywhere in the world at anytime. If you do this, you will be assessed for the tax due

and an additional penalty equal to the tax due.

If you do not apply for the exemption when you register the property at the land title office, you

can apply for a refund of the property transfer tax you pay within 18 months of the date you

register the property.

WHAT ARE THE REQUIREMENTS TO KEEP THE EXEMPTION?

􀂃 You need to occupy the property within 92 days of the date you register the property and

continue to use the property as your principal residence for at least 1 year after you register

the property.

􀂃 If the land is vacant when you purchase the property, a principal residence needs to be built

on the property within one year of the registration date, and you need to reside on the

property for the remainder of that year. The fair market value of the land, plus the cost of

building any improvements on the land cannot exceed the current threshold of $425,000.

􀂃 The ministry will send you a letter at the end of the first year you own the property. If your

property purchase was registered on, or after, February 20, 2008, the letter will ask you to

confirm that the property is still your principal residence. If your property purchase was

registered before February 20, 2008, the letter will ask for details of your financial account(s)

that you have registered against your property from the date of registration until

February 20, 2008.

􀂃 If your property purchase was registered before February 20, 2008, and you paid down your

mortgage before February 20, 2008, there are limitations on how much of your financing you

can pay down. For further details, please see Bulletin PTT 004, First Time Home Buyers'

Program.

􀂃 You may still qualify for a partial exemption if you pay down your financing more than the

limitation amount before February 20, 2008, or if you move off the property before the end of

the first year.

􀂃 It is your responsibility to make sure the ministry receives all of the necessary information. If

the ministry does not receive the information, you will be assessed for the property transfer

tax due.

More Information

This brochure provides general information on the First Time Home Buyers' Program. For details

on the program, please see Bulletin PTT 004 , First Time Home Buyers' Program. This bulletin is

available on our website at www.gov.bc.ca/sbr

If you have any questions, please contact us.

Telephone: (Victoria) 250 387-0604

Toll-free in Canada: 1 800 663-7867 (request a transfer to 250 387-0604)

E-mail: PTTENQ@gov.bc.ca