It’s been some time since I talked about Property Transfer Taxes in British Columbia (my earlier article is here). Since then there have been a few changes, the most recent of which went into effect on February 20, 2008.
The bad news is there was no reduction to the rate of taxation that adds significantly to the purchase costs of acquiring a home in BC. And in my humble estimation, you shouldn’t hold your breath waiting for a reduction. In the current slow market, Provincial revenue from this tax cow is bound to suffer significantly. And one might reasonably expect that the government will really begin to feel the economic pinch next year (2009), so cutting rates in this area seems like a non-starter to me.
The good news is that the basic threshold amount below which eligible first time home buyers may be exempted from paying Property Transfer Tax has been increased to $425,000. With many forecasting continued downward pressure on residential real estate prices over the next while (who knows how long?), the odds of qualifying for the exemption are looking better than they were.
The other change worth noting is that before the most recent change, there were specific requirements dealing with minimum mortgage financing, and restrictions on mortgage paydowns during the first year of ownership. Those requirements have been eliminated, so now whether you borrow money or not to buy your home simply isn’t relevant to your eligibility for an exemption.
As I mentioned in my last article on the subject, there are other hoops to jump through to be eligible, and ‘the devil is in the details’. Here is a link to the current details.
Bye for now,
...Victoria's blogging real estate professional.
