Hey there everyone.
It's JP from the Letnick estates group here to talk about some Real Estate Tips.
Today I'm going to be talking about property transfer tax.
How much does it cost and who pays it?
So in British Columbia, Canada, property transfer tax when you're purchasing a property is 1% of the first 200,000 and then 2% on the remaining balance up to $2 million. Anything above $2 million is taxed at 3% and then there are some other unique individual situations. For example, if you're a foreign buyer, in some areas of BC, you may be subject to 20% foreign buyers tax on your property purchase.
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax
If it's a residential property. In some situations there are some exemptions that you can take a look at. I'm going to pull those up here. There are government websites that will indicate to you which exemptions you may qualify for, so definitely take a look at those. If you're a first time home buyer, then you may be able to qualify for an exemption on the property transfer tax.
Also, if you're purchasing a brand new home in BC, up to $750,000 currently, as of today, which is March 30th, 2020 there is a new home buyers property transfer tax exemption program where you may be all eligible to have that exemption as well.
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions
Now, who pays it? Depending on how you negotiate your contract, you may be able to have the seller pay for the property transfer tax, but that's typically not how it's going to work. The buyer is normally the one that can qualify for an exemption.
And the situations for that buyer may be different each and every single time. So it's best if you look into the different options. And again, I am not a professional accountant or a tax specialist. So if you have any questions regarding taxes, please speak to your financial planner or your accountant so that you can get the right information.
Normally the exemptions for property transfer tax during the purchase are all the paperwork is done with your lawyer, so make sure you speak with your lawyer regarding what potential exemptions you may be able to qualify for and they can fill out the proper forms and have those submitted when you're doing your completion for your property.
Thanks for tuning in. If you have any questions, feel free to send us a message and we'll be happy to help you out with your property transaction in the near future. This has been JP and Luna and we look forward to seeing you on the next video.
