The BC government introduced its 2016 budget today. The budget includes a number of items that will impact home buyers and home owners in British Columbia.
Here’s a summary:
Property Transfer Tax (PTT)
• a new exemption will apply to newly built homes or newly subdivided units priced up to $750,000, saving buyers up to $13,000; and
• a partial exemption will apply on newly built homes priced $750,000 to $800,000.
• a new 3% PTT rate will apply to the portion of a home sale that exceeds $2 million. For homes that sell for below $2 million, the PTT will continue to apply at a rate of 1% on the first $200,000 and 2% on the balance.
These changes will take effect on February 17, 2016.
As an example, a purchaser of a $3-million house will pay a property transfer tax of $68,000, instead of $58,000, an increase of $10,000. The property transfer tax is paid by the buyer to the BC Ministry of Finance on the day of completion.
A Property Transfer Tax calculator is available at the BC Government website: http://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand
Starting this summer, individuals and corporations buying property must disclose if they are Canadian citizens or permanent residents of Canada and if neither, their home country. These changes will provide information on the volume of foreign investment in BC.
Home Owner Grant
The Home Owner Grant threshold will increase to $1.2 million from $1.1 million for the 2016 tax year. If your property has an assessed or partitioned value of $1,2 million or less, the home owner may pay property tax at a reduced rate.