The BC Minister of Finance has announced several changes to the Property Transfer Tax program, effective Wednesday, Feb 17th, which include:
1. A property transfer tax exemption for Canadian citizens and permanent residents who purchase newly-built homes, condos and townhouses under $750,000. Purchasers must live in the property for at least one year. This is a potential savings in closing costs of up to $13,000.
2. A 1% increase in property transfer tax to 3% for homes which are sold over the $2 million mark.
3. Buyers will need to start disclosing their country of residence in all property transactions.
4. The beneficial ownership of properties held by corporations will also be tracked.
*The first time home buyers exemption will remain in place for all homes under $475,000
This change will encourage a number of buyers -- both first-time and repeat -- to jump off the fence and into the market. Repeat buyers now get an exemption on new builds up to $750,000. This is good news and will likely stimulate the move up buyers to look around as a $13,000 cash expense has just been removed from the process of moving from one property up to a larger, nicer, brand new place.
On the flip-side of the changes, however, are purchasers of luxury homes. Under the new changes, they will pay higher land transfer fees. A client purchasing a $4,000,000 home is not slowed by a $20,000.00 increase in purchase taxation; they will still pay the four million.
Also, good news is the tracking the country of residence in all property transactions. Expect changes from the board in the next few weeks.