February 17, 2016
There have been some changed to Property Transfer Tax just announced by the Finance Minister. If you are about to purchase a new build home, or are NOT a Canadian Citizen or Perment Resident, these changes effect you.
- Newly built homes priced up to $750,000 will be fully exempt from the property transfer tax when bought by Canadian citizens or permanent residents as a principal residence and lived-in for a full year. The measure aims to assist purchasers and help stimulate the construction of moderately priced homes. The exemption will save a purchaser up to $13,000, and provide an estimated $75 million in property transfer tax relief for new construction in 2016-17. Partial exemptions are available for new housing valued up to $800,000. Newly constructed housing eligible for the exemption includes the first purchase of a new housing unit or a newly subdivided unit.
- Those who buy land and build homes to be used as their principal residence can also apply to receive a refund of property transfer tax rather than an exemption at the time of registration, if they complete construction and move in within a year of purchase. The program will'be available to buyers regardless of how long they have lived in British Columbia, meaning those who move to B.C. to take jobs, start companies and build their lives here will also benefit. The exemption will be available to first-time buyers and previous property owners alike.
- The New Housing exemption will be largely funded by increasing the property transfer tax rate to 3% on the portion of fair market value over $2 million. The 1% rate on the first $200,000 of property value and the 2% rate on the value of a property between $200,000 and $2 million continue to apply. The new higher rate is expected to raise an additional $75 million each year.
Creating new housing supply is critical to improving housing affordability in B.C.'s real estate market. Relatively high housing prices in B.C., and particularly in the Lower Mainland, are driven by increased demand that has resulted from B.C.'s economic and population growth, as well as constrained geography and a lack of available land. The New Housing exemption is expected to benefit owners of about 22,000 new homes in 2016, many of which will be constructed in the Vancouver area.
As well, Purchases will be required to identify themselves as Canadian Citizens or permanent residents. New citizenship disclosure requirements will come into effect in Spring 2016.
Individual transferres who are not Canadian citizens or permanent residents will be required to disclose their citizenship and Corporations will be required to disclose their directors citizenship.
Thanks to Pauline Fong-Leung, M.B.A. Notary Public for this info. If you have questions for a Nortay Public, call her at 604-879-7812, or visit her website www.pflnotary.com