Land transfer tax can be an unpleasant surprise for those who don’t keep closing costs in mind when purchasing a property. Not only do have you to find the best mortgage rates in BC, put in a large down payment to avoid CMHC insurance, but you also need to factor in land transfer tax.
The BC land transfer tax is applied as follows:
The first $200,000 of the purchase price of the home is taxed at a marginal rate of 1.0%.
Any amount exceeding $200,000 has a marginal tax rate of 2.0%.
BC first-time home buyer land transfer tax rebate
If you are purchasing a home for the first time, you are eligible for a full tax refund on a home purchase of up to $425,000. If your home price is between $426,000 – $450,000, as a first-time home buyer, you can claim a partial refund according to the following equation:[($450K – fair market value) / 25K] * LTT amount.
Use our BC land transfer tax calculator to calculate your estimated tax and potential rebate.
To qualify for the tax rebate, you need to meet the following criteria:
– You must be a permanent resident or Canadian citizen (determined by Immigration Canada).
– You must have lived in the province of British Columbia for 1 year prior to the date the property is registered or you have filed 2 income taxes in BC in the 6 years before the property is registered.
– You cannot have owned a principal residence anywhere in the world prior to this purchase.
– You have not previously received a first time home buyers` exemption or refund.
To qualify, your property must meet the following criteria:
– The market value of the residential property does not exceed $425,000.
– The area of land is 0.5 hectares or less.
– The property can only be used as your primary residence.
Don’t forget to factor in closing costs such as land transfer tax as these can definitely throw off your budget!