Mortgage Glossary

BC Property Transfer Tax

In BRITISH COLUMBIA the Property Transfer Tax (PTT) is as follows:

1.0% on amounts up to and including $200,000

2.0% on the amount exceeding $200,000

For example, the Property Transfer Tax on a house costing $250,000 would be $3,000.00
This is calculated as follows:
200,000 X 1.0% = $2,000.00
50,000 X 2.0% = $1,000.00
Adding these two amounts together = $3,000.00

FIRST-TIME BUYERS - The main points are listed below but please contact your lawyer for more details.
Currently first-time buyers do not have to pay the tax as long as they qualify under ALL the following conditions:

The purchaser must be a Canadian citizen, or a Landed Immigrant.

The purchaser must have resided in the province of British Columbia for at least 1 year prior to the registration of the purchase.

It must be the purchase of a principal residence, and the purchaser must occupy it within 92 days of registration of the transfer of title.

The purchaser must not have previously owned an interest in a principal residence, at any time, anywhere in the world.

The mortgage amount borrowed to finance the purchase must be 70% or more of the property value. The amount financed must be registered against the title.

The amount borrowed must have a term of at least 1 year. If you wish to have a term of less than 1 year you will have to pay the Property Transfer Tax, but will then be able to apply for a refund at the end of the year.

The fair market value of the property must not exceed $275,000 within the Capital Regional District (Victoria), Greater Vancouver area, Fraser Valley, Dewdney-Allouette and Fraser Cheam. In all other areas in B.C., the property value must not exceed $225,000.

If more than one person is on title, then the Property Transfer Tax will be pro-rated.
For example;

If two people will each own a 50% interest in the property, and both qualify for the first time buyers plan, they will not pay any Property Transfer Tax.

If two people will each own a 50% interest in the property, but only one person qualifies for the first time buyers plan, the other will owe half of the Property Transfer Tax.

If the first-time home owner will own a 90% interest in the property, and the non-qualifying person will own a 10% interest, then an amount equal to 10% of the Property Transfer Tax will have to be paid.

REDUCTION OF PRINCIPAL IN THE FIRST YEAR
In the Capital Regional District (Victoria), Greater Vancouver area, Fraser Valley, Dewdney-Allouette and Fraser Cheam, the principal amount of the mortgage cannot be paid down by more than $11,000 in the first year.

Outside these areas, the mortgage principal cannot be paid down by more than $9,000 in the first year.

No matter the area, the mortgage principal may not be reduced below 70% of the purchase price in the first year. This includes the principal portion of your normal payments, plus any lump sum payments.

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