New in BC! PROPERTY TAX EXEMPTIONS
Exciting changes are coming to property tax exemptions in British Columbia. Effective April 1, 2024, first-time homebuyers and those purchasing newly constructed homes will benefit from significant updates to property transfer tax exemptions. Additionally, there are alterations to the BC Home Flipping Tax, providing clarity on gains from home sales within specific time frames. These changes aim to enhance accessibility to the housing market and provide relief for qualifying purchasers.
Corrections to below…
The PTT exemption for first time homebuyers has been expanded to include residential property valued up to $835,000. This means on a home worth up to $835,000; a first-time homebuyer will not pay any PTT on the first $500,000. Partial exemptions will be available on homes valued up to $860,000.
The PTT exemption for newly built residences will also be increased. Newly built homes with a value of up to $1.1 million will receive an exemption to the PTT (this is up from the current $750,000). Newly built homes between $1.1 million and $1.15 million will receive a partial exemption. The purchase of purpose-built rental properties with four or more units will be exempt from the general PTT between January 1, 2025 and December 31, 2030.
Tax Exemptions:
Effective April 1, 2024, there are updates to property transfer tax exemptions for first-time homebuyers and those purchasing newly constructed homes. The threshold has increased from $500,000 to $850,000 fair market value, with the first $500,000 being exempt from property tax.
Newly Built Home Exemptions:
The newly built home exemption reduced or eliminates the property transfer tax on qualifying purchases of a principle residence.
These exemptions include:
-Full exemption: The fair market value threshold for ffull exemption has been increased from $750,000 to $1,150,000, effective April 1, 2024
– Partial exemption: Qualifying purchase just above the threshold have a phase-out range. The phase out range is $50,000 above the threshold, with the complete elimination of the exemption at $1,150,000 for qualifying purchasers.
Flipping Tax:
The BC Home Flipping Tax imposes a 20% tax on gains from home sales within a one-year period, with a pro-rated tax for sales within a two-year period. This applies to properties and assignments of contracts, in addition to any federal or provincial income taxes incurred from the sale. Exemptions are available for certain life circumstances, including the creation of rental accessory dwelling units.
This update on tax exemptions is intended to offer a brief overview. For more comprehensive knowledge or specific inquiries about real estate, consulting with qualified professionals is recommended.
