Real estate news for the Fraser Valley

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In British Columbia, a first time home buyer is exempt from Property Transfer Tax when purchasing their new home. There are some eligibility requirements, both for the home buyer and the property itself.

Who can claim the exemption?

To qualify for a Property Transfer Tax exemption, the home buyer must be ALL of the following:

• A Canadian citizen or permanent resident
• a person who has resided in British Columbia for 12 consecutive months
  immediately prior to the date of registration of the transfer, or who has filed
  two income tax returns as a British Columbia resident within the last
  six years,
• a person who has never, at any time, held a registered interest in a principal
  residence anywhere in the world (a principal residence is defined as the
  usual place where an individual resides), and
• a person who has not previously received an FTHB exemption or refund.

What property qualifies for the exemption?

Under the First Time Home Buyer program, a full exemption from the BC Property Transfer Tax is only applicable if:

• the improvements on the property become the principal residence (whether
  or not they are formally classified as residential),
• the land is 0.5 hectares (1.24 acres) or smaller, and
• the value of the land plus improvements falls below the set threshold amount
  of $425,000.

The above threshold amount applies to purchases registered on, or after,
February 20, 2008.

What about partial exemption?

If part of the improvements on the land are used for purposes other than
the purchaser’s primary residence, such as where part of the improvement is used
for commercial purposes or where there is a separate dwelling or residential
improvement on the land, only the portion that is the purchaser’s primary
residence is eligible for the exemption. If the land is larger than 0.5 hectares, only the residential improvement and 0.5 hectares of the land are eligible for the exemption. Where a property has a fair market value of up to $25,000 more than the
threshold amount, the property is eligible for a partial exemption.

When can the refund be claimed?

A home buyer may claim the exemption at the time the transfer is registered at the Land Title Office.

Occupancy Requirements

During the first year of ownership, the home owner must occupy the property within 92 days of the transfer being registered at the Land Title Office. The purchaser then must use the property as his or her principal residence for at least one year since the transfer registration at the Land Title Office.

If the property purchased is vacant land, and the purchaser wants to claim the first
time home buyers’ exemption, a principal residence must be built on that land
within one year after the transfer is registered, and the purchaser must then reside
on the property for the remainder of that year to receive the full exemption.