Property Transfer Tax

Did you know that an important part of calculating closing costs when acquiring an interest in real property, is to understand and allow for Property Transfer Tax?

When you purchase or gain an interest in property that is registered at the Land Title Office, you're responsible for paying property transfer tax. Taxable transactions include:

• Transfer of fee simple
• Right to purchase or agreement for sale
• Lease or lease modification agreements
• Life estate
• Foreclosure
• Crown grant
• Escheat, forfeiture or quit claim
• Transfer as a result of corporate reorganization

You pay the tax based on the fair market value of the property at the date of registration, unless you qualify for an exemption.

If you’re a foreign national or foreign corporation, you also pay the additional property transfer tax on residential property transfers within the Greater Vancouver Regional District.

Property transfer tax exemptions for First Nations apply to reserve, surrendered, or special reserve lands. These exemptions from taxation, by all levels of government, are on property that is considered reserve land or surrender lands, that have been set apart by the federal government and vested in the Crown for the use and benefit of an Indian Band.

Property transfer tax should not be confused with annual property taxes. Annual property taxes are paid yearly for each property you own or have a registered interest in to fund services in your area.

The B.C. Government's website on this topic may be helpful to you in this regard.