In the 2024 provincial budget, the BC Government is making three significant changes to the Property Transfer Tax Framework.
Here are the three changes;
1. Increase the Fair Market Value Threshold for the First Time Home Buyer(FTHB) Exemption. Currently, the First Time Home Buyer full exemption applies to properties with a fair market value of less than $500,000. A partial exemption for properties with a fair market value of $500,000 to $525,000.
As of April 1st, 2024, the First Time Home Buyer exemption will apply to properties in a slightly different way. If a Property has a fair market value of less than $835,000, Property Transfer Tax is not payable on the first $500,000, but payable on the difference. For example, if a fair market value of the property is $700,000, Property Transfer Tax would be 2% of $200,000 ($700,000 less $500,000). This change of not paying Property Transfer Tax on the first $500,000 saves the purchaser a total of $8,000.
If a property has a fair market value between $835,000 and $860,000, then only a partial exemption applies. The of a partial exemption are not yet confirmed by the BC government.
If a fair market value of the property is over $860,000, then there is no First Time Home Buyer Property Transfer Tax exemption. Here is a link to the details in the BC Budget announcement.
2. Increase the fair market value threshold for the Newly Built Home Exemption
Effective April 1, 2024, the fair market value threshold to claim the Newly Built Home Exemption will be increased from $750,000 to $1,100,000. A partial exemption is also available for properties with a fair market value just above the threshold. The phase out range is $50,000 above the threshold, so properties with a fair market value of greater than $1,150,000 will not be able to claim the Newly Built Home Exemption. Here is a link to the details in the BC Budget announcement.
3. Purpose-Built Rental Exemption
The 2023 Budget included a limited exemption for purpose built rental buildings that may limit the tax payable on values over $3,000,000. The 2024 Budget builds on this exemption and provides an exemption from the Property Transfer Tax on purchases of new qualifying purpose-built rental buildings. Here is a link to the details in the BC Budget announcement.
General Property Transfer Tax
The above are changes announced to the general Property Transfer Tax which is below;
The general property transfer tax applies for all taxable property transactions. The general property transfer tax rate is:
- 1% of the fair market value up to and including $200,000
- 2% of the fair market value greater than $200,000 and up to and including $2,000,000
- 3% of the fair market value greater than $2,000,000
Here is a link to the details of property transfer tax rates in British Columbia. These numbers can be confusing to calculate on purchase price of a home, message me for a breakdown.