Property Transfer Tax is the largest closing cost for most buyers in British Columbia, and it’s due when your purchase is registered, so it has to be part of your plan from the start. Here’s how it’s calculated and who can be exempt, from the Province’s own guidance.
How it’s calculated
The tax is based on the property’s fair market value (land and buildings) on the date it’s registered at the Land Title Office. For a sale on the open market that’s registered within a few months, the purchase price is generally a good indicator of that value. The rates are:
- 1% on the first $200,000;
- 2% on the portion from $200,000 to $2,000,000;
- 3% on the portion above $2,000,000; and
- a further 2% on the residential portion above $3,000,000.
Two of the Province’s own examples:
- A $650,000 home: $2,000 + $9,000 = $11,000.
- A $4,500,000 home, entirely residential: $2,000 + $36,000 + $75,000 + the further $30,000 = $143,000.
When and how you pay it
When you buy and register a property, a property transfer tax return has to be filed and the tax paid, unless you’re exempt. In practice your lawyer or notary prepares the return and pays the tax as part of registering your purchase, using funds you provide. That’s why it belongs in your budget alongside your down payment, rather than coming as a surprise at the signing.
First-time home buyers’ exemption
You may be exempt from tax on the first $500,000 of the price (a saving of up to $8,000) if, among other conditions:
- you’re a Canadian citizen or permanent resident;
- you’ve lived in BC for the 12 months before registration, or filed at least two BC resident income tax returns in the last six years;
- you’ve never owned an interest in a principal residence anywhere in the world; and
- you’ve never received a first-time buyers’ exemption or refund before.
The home must be your principal residence, on a lot of 0.5 hectares (about 1.24 acres) or less. For homes registered on or after April 1, 2024, the full exemption applies to fair market values of $835,000 or less, and a partial exemption phases out between $835,000 and $860,000. You must move in within 92 days of registration and live there as your principal residence until the first anniversary, or repay part of the exemption.
Newly built home exemption
For a newly built home that will be your principal residence, Canadian citizens and permanent residents may be fully exempt for fair market values up to $1,100,000 (titles registered on or after April 1, 2024), with a partial exemption up to $1,150,000. It applies to the first registration of a home with a completed improvement, on a lot of 0.5 hectares or less, with the same 92-day move-in and one-year occupancy requirements.
Buyers who aren’t citizens or permanent residents
An additional 20% property transfer tax applies when foreign entities or taxable trustees buy residential property in specified areas of the province, which include Metro Vancouver. If this could apply to you, get legal advice before you write an offer.
Questions people ask
Is the tax based on the price or the assessed value?
On fair market value at registration. On a normal open-market sale, that’s generally the purchase price, not the BC Assessment value.
We’re buying together and only one of us is a first-time buyer. Does the exemption apply?
Only to the share owned by the person who qualifies.
Do I pay it again when I sell?
No. Property Transfer Tax is paid by the buyer when a property is registered in their name.
General information for buyers in British Columbia, using the Province’s rates and thresholds as published at the time of writing. Exemption rules have more conditions than this summary covers; confirm your situation with your lawyer or notary, and on the Province’s site.