In a bid to make home ownership within reach of more British Columbians, the B.C. government is giving a tax break to buyers of new homes worth up to $750,000. Here are 10 things you should know about yesterday’s announcement.
1. Buyers of newly-built homes, condos and townhouses worth up to $750,000 will be exempt from the property transfer tax, saving up to $13,000. This is effective Feb 17, 2016 and is ONLY for Canadian citizens or permanent residents. There is a partial exemption for homes between $750,000.00 and $800,000.00.
2. The Newly Built Home Exemption will only apply to people who actually occupy the home as their principal residence for a year after the purchase (relatives do not qualify) and B.C. will share information with Revenue Canada to double-check whether the rules are being followed. The occupancy criteria is (refer to the above link for more details):
- You must move into your home within 92 days of the date the property was registered at the land title office and,
- Continue to occupy the property as your principal residence for the remainder of the first year.
3. All residential properties (both new and used) sold for more than $2 million will now pay a 3% increased property transfer tax on the portion of the sale value over $2,000,000. This is up from the current 2 per cent. (For example a $4,000,000 sale would be: 1% first $200,000, 2% next $1.8M, and 3% on the $2M over $2M, therefore PTT is $98,000. Under the old rules, that number would have been $78,000, a $20,000 increase.)
4. The existing first-time home-buyers program for re-sale homes remains unchanged; the threshold remains at $475,000 (with a partial exemption for homes between $475,000.00 and $500,000.00).
5. Property buyers will need to disclose their citizenship for government tracking.
Other Things to Note about B.C.’s Budget Announcement:
6. MSP premium rates will rise $3 per month for an adult to $78, starting in 2017, children are now exempt from paying MSP premiums.
7. The special discounted MSP rate for couples is eliminated, adding $14 a month to a family with two adults.
8. Taxpayer-supported debt is budgeted to rise to $43.2 billion, which means 3.7 cents of every dollar government earns is paid toward debt servicing.
9. The $47.5 billion budget next year will have an estimated surplus of $264 million. The economy is expected to grow 2.4 per cent.
10. Income assistance for those on disability will rise $77 a month, except for those who already receive a bus pass or transit assistance. It’s the first increase in the rate in nine years. The overall welfare rate remains unchanged.