Pictured is 1071 Blue Water Place at beautiful Wyndemere Estates in French Creek
The Government of BC rolled out its new Provincial Budget yesterday with a tax change that virtually eliminates the property transfer tax payable when requisitioning a new construction property.
The Government of British Columbia website explains that, when you purchase or gain interest in property that is registered at the Land Title Office (LTO), you are responsible for paying a property transfer tax (PTT).
PTT payments are eligible on the following types of transactions:
- Transfer of fee simple
- Right to purchase or agreement for sale
- Lease or lease modification agreements
- Life estate
- Crown grant
- Escheat, forfeiture or quit claim
- Transfer as a result of corporate reorganization
Whether cash changes hands or not, the amount of tax you pay is based on the fair market value of the property at the date of registration with the land title office. Property Transfer Tax works out to be 1% of the first $200,000 of fair market value and 2% on the remaining portion, up to $2,000,000 (and portion greater than $2,000,000 you're looking at 3%)
However, there are ways that you can apply for exemption, and an exciting new way that rolled out on February 16th, when the British Columbia Provincial Budget was revealed.
The Newly Built Home Exemption reduces or eliminates the amount of PTT you pay when you purchase a newly constructed home. You can also apply if you purchased vacant land and now have a newly built home on that land.
There are some stipulations to be aware of when you're wondering about whether you are eligible to receive exemption. You must be a Canadian citizen, using the property as your principle residence, and the property must be 1.24 acres or smaller. The property must also have a fair market value of $750,000 or less.
This is fantastic news for individuals wanting to purchase a home, especially first time home buyers who previously were only eligible for exemption on homes up to $450,000. If you're purchasing a $750,000 home, it may as well be a brand new one, and you'll save up to $13,000 on PTT!
For more information on the Newly Built Home Exemption, contact us; we'll be happy to answer any questions you may have and help you find the perfect home