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British Columbia land transfer tax

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.

BC land transfer tax

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!