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. Please refer to the BC Government PTT website for more information.
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.
A link to all the BC Government Property Transfer Tax exemptions is available here.