Video #6 – Land Transfer Tax (LTT) is a full tax everyone has to pay unless you are a first time home buyer. Land Transfer Tax is charged by the Land Title office when you make changes to a property’s title (ex. you are putting the property title from someone else’s name into your name). This is not the same as property tax and is not a part of your property tax payments.
This is often overlooked when considering the total cost of purchasing a home. All provinces have a land transfer tax, except Alberta and Saskatchewan, who instead levy a much smaller transfer fee. To see how land transfer tax is calculated, watch the video below. To help offset the cost of land transfer tax, British Columbia offers land transfer tax rebates for first-time home buyers.
Calculating British Columbia Land Transfer Tax
The amount of tax you pay is based on the fair market value of the land and improvements (e.g. buildings) on the date of registration unless you purchase a pre-sold strata unit. The tax is charged at a rate of 1% for the first $200,000 and 2% for the portion of the fair market value that is greater than $200,000.
For example, if the fair market value of a property is $250,000, the tax paid is $3,000.
British Columbia First-Time Homebuyer Land Transfer Tax Rebate
First-time homebuyers are eligible to receive a full land transfer tax refund on homes purchased for $425,000 or less. On homes purchased between $426,000 – $450,000, the first-time homebuyer will be eligible for a partial refund equal to [ ($450K – fair market value) / 25K ] * LTT amount.
You Can Qualify For the First-Time Homebuyer Land Transfer Tax Rebate If:
- You are Canadian citizens or permanent residents as determined by Immigration Canada
- You have lived in British Columbia for 12 consecutive months prior to the date the property is registered or have filed 2 income taxes in British Columbia in the 6 years before the property is registered
- You have never owned an interest in a principal residence anywhere in the world at anytime
- You have never received a first-time home buyers’ exemption or refund
Your Property Qualifies For the First-Time Homebuyer Land Transfer Tax Rebate If:
- The fair market value of the property is not more than $425,000
- The land is (0.5) hectares or smaller
- The property will only be used as your primary residence
How Do I Apply?
To apply, you must fill out a First Time Home Buyers’ Property Transfer Tax Return and other appropriate Land Title forms at the Land Title Office when your property is registered.
For more information, see the Government of British Columbia website.