Q: How is the government going to monitor the 1-year occupancy detail?
A: As with the First Time Home Buyers (FTHB) exemption, the Ministry will send a letter to the purchaser at the end of the year to confirm compliance, principal residence & owner occupied.
Q: I’m a First Time Home Buyer and purchase a home for $575K pre-owned (not new), do I still pay PTT?
A: Yes, the $500K limit (as of February 2017) remains the same for FTHB first property. The FTHB Exemption values remain as they were prior to this on pre-owned homes.
Q: For the New Housing Exemption of $750,000, is there any portion over $750,000 subject to 1%, or does it start at 2% on the portion over $750,000 immediately?
A: Like the FTHB exemption, a partial exemption is available when the fair market value is over $750,000 but less than $800,000. If the price is $800,000 or more, PTT is payable on the entire price. So if the price is $801,000, PTT is on the entire amount, not just the last $1,000 at the regular tax rate(1% first $200K and 2% on the portion of fair market value greater than $200K and up to and including $2M).
Q: I’m looking at a new home that’s $787,500 including GST, is the exemption based on the pre-GST or net purchase price ($750,000), or the purchase price including GST ($787,500)?
A: Good news; it’s on the net purchase price, GST is backed out from the price so that PTT is calculated on the net price, which must be under $750,000 for the full exemption.
Q: I just moved here from another province, am I eligible for the FTHB or the New Housing Exemption, even if I move here from another province?
A: In order to be eligible for the FTHB exemption, you must be either a Canadian citizen or permanent resident AND have lived in B.C. for 12 consecutive months immediately before the date you take ownership of the property, or have filed at least 2 income tax returns as a B.C. resident in the last 6 years. Now for the New Housing Exemption, you must be an individual (not a corporation) and either a Canadian citizen or permanent resident. The key difference is that, for the FTHB exemption (on pre-owned homes), there is a B.C. residency requirement, but not one for the New Housing Exemption.
Q: Does the PTT exemption on new home homes apply to all real estate purchases whether they are a principal residence or an investment property purchase?
A: These exemptions apply only to principal residence purchases and full PTT will continue to apply to all investment properties.
Q: I’m looking at a property over $2,000,000. Does that mean with this change that the PTT is now 1% on the first $200,000, and 3% on the rest? Instead of what it was: 1% on the first $200,000 and 2% on the rest over $200,000?
A: With this new change, it is now 1% on the first $200,000, 2% on the value over $200,000 up to $2,000,000, and 3% on any value over $2,000,000. The 3% only comes into play when the sale price crosses over $2,000,000.
Q: I’m looking at purchasing a newly constructed work/live townhouse in Burnaby. There is retail space on the main floor, with residential space above. Each component has its own separate strata title, but the two are being sold together as one unit. I’m planning on living in property, am I eligible to get the PTT waived even though main floor is retail space?
A: When they are strata’s, the PTT is based on individual units and their values, so in your case there will be an exemption for the townhouse portion that’s a principal residence, but not for the retail portion.
Q: How is the partial exemption calculated?
A: For this example, we will use a net purchase price for a new home of $770,000
Step 1: Calculate what the PTT would be if there was no partial exemption (1% of first 200K, 2% over)
$2,000 (1% of $200K) + $11,400 (2% of 570K) = $13,400
Step 2: Use the following formula
[PTT without exemption X ($800,000 - Purchase price)]/$50,000 = partial exemption amount
[$13,400 X ($800,000 - $770,000)]/$50,000 = $8,040
Tax payable $13,400 (full PTT) - $8,040 (partial exemption) = $5,360 (tax payable)
