Last updated: April 28, 2023
What this tool is all about:
This tool lets you get an estimate of what your land transfer tax will be when you purchase a British Columbia property.
Probably one of the largest closing costs for buyers, the British Columbia land transfer tax, also known as the property transfer tax, is a one time fee paid to your provincial government when a property or home is transferred from the seller to you. Tax rates will also vary depending on the province your property is located in. In British Columbia, the land transfer tax is applied to every home or property once purchased and will depend on the fair market value of the property on the day it was registered with the Land Title Office.
Yes. There is some form of land transfer tax that all provinces and territories in Canada have, but the exact amount will depend on the location and will vary. You are required to pay land transfer tax on your property purchase unless you qualify for a rebate/exemption.
You will need a few key pieces of information, such as your purchase price, down payment and location. This will quickly give you an estimate of your British Columbia land transfer taxes, however this is just an estimate and you should work with your advisor to get the exact amount.Here are some land transfer calculations based in Vancouver, British Columbia (keep in mind this does not include legal fees):
|Purchase Price||Land transfer tax||Land transfer tax rebates||Net tax payable|
|$500,000.00||Provincial LTT: $8,000||$8,000.00||$0.00|
|$670,000.00||Provincial LTT: $11,400||$11,400.00|
|$750,000.00||Provincial LTT: $13,000||$13,000.00|
|$1,500,000.00||Provincial LTT: $28,000||$28,000.00|
The land transfer tax is a source of revenue for the provinces that collect them and goes towards paying for public services and infrastructure.
Anyone who purchases a property must pay a land transfer tax to the province in which they bought the property and it must be paid when the transaction closes.
Annual property taxes are paid yearly and should not be confused with British Columbia land transfer taxes. Annual taxes are paid yearly to your municipal or rural tax office for every property you have a registered interest in to fund services in your area.
Known today as the British Columbia property transfer tax or British Columbia land transfer tax, it was originally called the Property Purchase Tax (PPT) and was first introduced in 1987 as a wealth tax to discourage speculation. It cost 1% of the first $200,000 and 2% of the remainder, however most home purchases didn’t qualify for the tax at the time as they were often below $200,000. In 2021, British Columbia introduced an extra 2% tax on properties valued over $3 million, bringing the bracket total to 5%.
If you are a first-time home buyer in British Columbia, you might be able to claim a first-time home buyer land transfer tax credit. Properties are eligible for a full refund if the property value is $500,000 or less.Your eligibility for this first time home buyer land transfer tax is based on the following:
To be eligible, your property must also meet certain criteria such as:
For first-time home buyers purchasing real estate in British Columbia, homes priced between $500,000 to $525,000, are given a partial refund. You might be eligible for a partial exemption if you meet the criteria of being a first-time home buyer and your property:
If you are unsure if you are eligible for the first-time home buyer land transfer tax rebate, talk to your lawyer to learn more.
If you purchase a new home, you might be eligible for the Newly Built Homes Exemption, which can help lessen or eliminate the B.C. land transfer tax.For full exemption, your new property must:
Few areas in Canada will charge both provincial and municipal land transfer tax. In fact, only three cities in Canada have both: Toronto, Montreal and Halifax.
All other remaining provinces and territories charge registration fees based on the value of the property being bought or transferred. These fees are usually much lower compared to typical Canadian land transfer tax rates.
British Columbia land transfer tax is typically based on the fair market value of the property on the day it was registered with the Land Title Office.There are 3 types of rates to consider when calculating your B.C. land transfer tax:
|Purchase Price of Property||Marginal Tax Rate||Land transfer tax rebates|
|Up to and including $200,000||1%||$8,000.00|
|$200,001 to $200,000,000||2%|
It’s important to note that each portion of your home’s value is taxed at a unique rate. See below for an example B.C. land transfer tax formula:
These calculations can sometimes be confusing, which is why we have created the British Columbia land transfer tax calculator. Simply input your details and you’ll instantly get an estimate.Additional property transfer tax
If you are a foreign national, foreign corporation or taxable trustee, you are required to pay additional property transfer tax along with the B.C. land transfer tax if your property is located in specified areas of B.C. The specified areas that require an additional tax are:
To learn more about the additional property transfer tax, click here.
It’s a rule of thumb to budget around 2-3% of the purchase price of your property to go towards closing costs (or use our closing cost calculator to get a more exact figure). British Columbia land transfer tax cannot be added into your mortgage and must be paid as soon as you take possession of the property from the seller on closing day.What transaction types are included for the British Columbia land transfer tax Transaction types include:
Fair market value is the price that is paid by a purchaser to a seller for a property, including land and improvements, in the open market on the date of registration.Open market transfers
A property transfer is considered to be in the open market when someone that is interested in purchasing the property can make an offer, like when a seller lists the property with a realtor or puts the property up for sale.
The purchase price will be considered the fair market value as long as it is sold in the open market and the property is registered within a few months of signing the sales contract.Situations where you would need to verify that the purchase price is fair market value:
If a property transfer does not take place in the open market, fair market value will be determined by:
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