Property Transfer Tax
Property Transfer Tax is a land registration tax. It must be paid when an application for a taxable transaction is made at any Land Title Office in British Columbia to register changes to a certificate of title. Property Transfer Tax is payable on the fair market value of the property being transferred.
Property Transfer Tax should not be confused with Property Tax (scroll down) which is the amount paid on an annual basis for services received from local government.
The amount of tax due depends on the fair market value of the property that is transferred:
If the fair market value is $200,000 or less, the tax is 1% of the fair market value
If the fair market value is greater than $200,000, the tax is 1% of the fair market value up to $200,000, plus 2% on the portion of the fair market value that is greater than $200,000
if fair market value of property is $150,000
tax payable is: 1% of $150,000 = $1,500
if fair market value of property is $250,000
tax payable is: 1% of $200,000 = $2,000
plus 2% of $50,000 = $1,000
for total tax payable of $3,000
How to File your Property Transfer Tax
Your representative (lawyer, notary public) will complete and file the return on your behalf. Regardless of who completes the tax return, the purchaser must sign the certification portion. Click here to download a form.
How to Pay your Property Transfer Tax
When you apply to register a taxable transaction at any Land Title Office in British Columbia you are required to pay the tax, unless you qualify for an exemption. Normally your will pay your Property Transfer Tax through you representative (lawyer, notary public). The LTSA advises customers of a change effective April 1, 2014 to the PTT payment method at its Land Title Office.
As of April 1, 2014, all cheques for PTT payment must be payable to the "Minister of Finance" rather than the LTSA. Cheques remain the only acceptable form of PTT payment accepted at Land Title Office service counters. The LTSA's Land Title Offices accept manually filed PTT forms on behalf of the Ministry of Finance as a courtesy to LTSA customers.
This change does not affect PTT forms submitted electronically. Customers are encouraged to register for myLTSA to access the LTSA's Electronic Services.
What is property tax?
An annual local government tax levied on real property based on BC Assessment’s estimated market value. Local governments calculate the tax by dividing the annual budget by total assessed property values. In rural areas, the province assigns the tax rate. Rates vary among property classes: residential, business, light and heavy industry, farm, recreation, utility and managed forest land.
The assessed value of each property is typically determined annually by BC Assessment, as of the previous July 1.
Where do I find out what my property taxes are?
Look at your tax notice which was delivered by mail in late May or early June. You can also check your local government web site, which may have information. For example, the City of Vancouver has a property tax web page where you can find out your account balance. For information contact your local government tax office.
What happens if I don’t get a tax notice?
You must pay whether or not you have received a notice. Contact your local government finance department and arrange for a duplicate notice. You must ensure that your local government and BC Assessment have your correct mailing address.
Five misconceptions about property taxes
1. You can appeal property taxes. No. You can appeal your assessment, not your taxes. You annually receive your assessment the first week of January and must appeal by January 31.
2. An appeal will change the market value. The market value may not correlate to the assessed value. BC Assessment typically assesses properties as of the previous July 1. A REALTOR® valuing a home now – 11 months later – may find the market has changed, the home has had an addition or the street has been re-zoned, all of which affect value.
3. If you just bought a home, the previous owners are liable for taxes. No. When you buy a property you become liable for all outstanding taxes.
4. New home owners can claim the Home Owner Grant. No. New home owners cannot claim the Home Owner Grant if the seller paid the taxes or if the new home owner claimed a grant on another property.
5. You haven’t claimed your Home Owner Grant for a few years and you want to claim it all now. You’re out of luck. You can claim the grant amount only for the previous year.
What does your property tax bill include?
Municipal Tax – is set by council and staff in the local government’s annual budget process and is based on revenue needs for infrastructure and services.
Regional District Tax – is set by the regional districts for key services such as regional water and sewage treatment. For example, Metro Vancouver tells their local governments what their revenue needs are, and the local governments collect on their behalf. In rural areas, the province (Surveyor of Taxes) collects for regional districts.
School Tax – is set by the BC Government to fund schools and varies by local government. It’s paid by residential and non-residential property owners.
Hospital Tax – is set by the regional hospital districts to help partially fund local health facilities. For example, in Metro Vancouver hospitals are funded by the province, not by property taxes. Outside Metro Vancouver, hospital taxes are still levied.
Other Taxes – are set by local taxing authorities and collected by the local government to fund BC Assessment, the Municipal Finance Authority and TransLink.
How to pay property taxes
Visit your local government’s web site for details on how to pay. Then check the due date on your tax notice, complete the Home Owner Grant application and then pay:
- Online by www.epost.ca: you must first sign up for this free online Canada Post delivery service that lets you pay electronically. When you pay and claim your Home Owner Grant electronically, you’ll receive a receipt with a confirmation number
- In person: take your tax notice and a credit or debit card, your cheque book, a certified cheque or cash to your local government finance department. Check business hours
- At the drop box: located near the front entrance of most City Hall offices. There may be drop boxes in alternate locations as well
- By mail: your payment must arrive at City Hall by the due date on your tax notice
- At a financial institution: most banks and credit unions accept tax payments in person. You can also pay online or by phone through your bank or credit union. Remember to submit your Home Owner Grant form directly to City Hall
- Through your mortgage: your mortgage company can pay your property taxes on your behalf if you arrange for this service beforehand
- By installments: check with your local government to see if prepayment options are offered.
Property Tax Notice Explained
Home Owner Grant
Since 1957, the BC Government has helped reduce the amount of property taxes you pay to your local government.
To be eligible for the grant, the property owner must be:
• a Canadian citizen or landed immigrant and reside in British Columbia
• the registered owner or eligible occupant of the home located within the province
• living in the home as your principal residence
Eligible home owners must apply for their grant each year before your tax due date.
The grant doesn’t apply to summer cottages, second homes or rental properties.
Spouses who live together, who are married or live together in a marriage-like relationship, including same-gender partners, can qualify for a grant on one residence in the province in a calendar year.
Spouses who live apart can each claim a grant on their principal residence if they have a written separation agreement or a court order recognizing the separation.
How much is the grant?
For 2009, the basic grant reduces taxes for home owners under the age of 65 by up to $570.
The additional grant for home owners aged 65+ and eligible veterans and disabled home owners is $275, for up to a total of $845.
The basic grant is reduced by $5 for each $1,000 of assessed value over $1,050,000 and is eliminated on homes assessed at $1,164,000 and above.
The additional grant is reduced by $5 for each $1,000 of assessed value over $1,050,000 and is eliminated on homes assessed at $1,219,000 and above. For information, please visit: www.sbr.gov.bc.ca/hog
Multiple owners, multiple grants?
If you own a property with others, decide which owner will pay the taxes so you don’t pay twice. If, for example, there are three owners living in a dwelling as a principal residence, only one Home Owner Grant can be claimed.
You may qualify for the Home Owner Grant if you’re a shareholder of a corporation, or a member of a housing cooperative or housing society that owns:
• an apartment building
• housing cooperative buildings, or
• housing society buildings
The corporation or cooperative or society applies for grants for all eligible property or units in the building and passes the grant benefit to qualifying occupants. An eligible property includes:
• land shown as a separate taxable parcel on a tax roll that has a taxable improvement
• a building containing at least two apartment units, each occupied by an eligible occupant
• eligible land cooperative residences
• a multi-dwelling leased parcel with two or more residences on it
Property owners aged 55 and older or turning 55 in 2009 may qualify for a deferment of all or part of their property taxes.
The Property Tax Deferment program was created for property owners at risk for losing their homes because of their inability to pay property taxes.
The BC Government pays the local government all property taxes for the home owner. Interest on deferment accounts is not compounded and is charged at a rate not greater than two per cent below the bank prime rate. Deferred taxes are eventually deducted from the home’s value when it is sold.
To qualify, home owners must be:
• aged 55+, or
• a surviving spouse of an eligible owner, and/or
• a person with a disability, and
• a Canadian citizen or permanent resident under the Immigration Act (Canada) who has lived in BC for at least one year before applying
Home owners must also:
• have and maintain a minimum equity of 25 per cent of the current assessed value as determined by BC Assessment, and
• maintain a current fire insurance policy on their home
Home owners can’t defer utility charges (sewer, water, recycling, garbage), penalties, interest or user fees.
BC property owners receive their annual assessment notice in early January from BC Assessment (BCA). This is the valuation on which your property taxes are based. You will receive your local tax notice in June each year. Property owners must realize that annual assessments can only be appealed before January 31 each year.
Typically, there is a difference between the property value assessment on the assessment notice and the market value determined by a REALTOR®. Home owners often want to know why.
What accounts for this difference?
The assessment notice is BCA’s estimate of a property’s market value as of July 1 of any given year.
BCA has a database of 1.8 million properties. When a new property is created through zoning or construction, or an existing property changes, a BCA appraiser visits the site and reviews lot size, structure and other factors including whether the property is on a quiet street with backyard lanes or on a busy boulevard.
A REALTORS® market value assessment is typically current. In our active local market, six months can mean thousands or even tens of thousands of dollars difference.
BCA appraisers do not visit each property annually to update the database. Instead, they use what is called a mass appraisal system, calculating values by evaluating prices for homes sold in each neighbourhood, or of similar units in a strata complex as of July 1 and then applying the information to arrive at an assessed value.
BCA analyzes a range of factors for each property including house type, square footage, age, heating, and even outbuildings such as garages, sheds and gazebos, as well as pools and spas.
REALTORS® determine the value of a property by scrutinizing the most recent comparable data for homes sold in a neighbourhood on the MLS®. REALTORS® also examine the exterior and interior of a property in detail, noting alterations and major renovations, such as new kitchens or bathrooms that affect the value of a home. They also take into account view lines, architectural styles and landscaping.
Where every lot and every home on the street are generally the same, both BCA’s value and the REALTOR’S® value will be similar, assuming a stable market.
Differences will likely occur in neighbourhoods where every lot on every street is different, every home’s architecture is unique and every view is distinct. Differences also occur when property owners make changes such as renovations that BCA does not know about.