| We have recently had a number of clients confused about payment of the Property Transfer Tax. We have been advised by the clients that they were told by their realtor or broker that they were eligible for the First Time Home Buyer Rebate Program. Obviously they were quite upset when they found they were not eligible and were required to pay the tax.
The biggest source of confusion seems to be over the issue of owning a home in the past. The Property Transfer Tax Act states that a person must never have owned an interest in a home as a principal residence anywhere in the world at any time. If a person has previously owned a home as a principal residence, anywhere in the world, they are not considered first time home buyers and are required to pay the tax. This is different from the rules regarding financing, which allows a person to be considered a first time home owner again after a period of 5 years of not owning a home. There are a number of other requirements which clients need to meet. These can be found on our website, www.bellspag.com Info from their website: There are a number of exemptions available to purchasers so that the tax is not payable. The most common is the exemption for "First Time Home Buyers." To qualify for an exemption to the Property Purchase Tax as a First Time Home Buyer, the following criteria must be met: |
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| • | Purchaser must never have owned an interest in a principal residence anywhere in the world at any time; | |
| - | Purchaser must be a citizen of or a permanent resident of Canada and have resided in | |
| - | B.C. for at least one year prior to the purchase or have filed two income tax returns as a British Columbia resident within the last 6 years; | |
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| • | To obtain full exemption, the purchase price must not exceed $275,000.00 in the Greater Vancouver, Fraser Valley and Capital Region Districts ($225,000.00 in Whistler and elsewhere). A partial exemption is available for homes between $275,000.00 and $300,000.00 (formula available from your Notary) | |
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| • | Mortgage Financing must be at least 70% of the fair market value of the property, and must have a term of at least one year (special rules apply for mortgages that have a term of less than one year and demand mortgages); | |
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| • | Purchaser must move into the property within ninety-two days after registration of the purchase of the property and reside in the property for at least one year; | |
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| • | Pro rata exemption where property exceeds .5 hectares or a portion of the property is not residential (i.e. commercial lofts) - purchase price of entire property must not exceed the price limitations. | |