BC’s Property Transfer Tax Overhaul

In a bid to tackle the soaring housing prices and make homeownership more attainable, the Government of British Columbia announced significant changes to its Property Transfer Tax framework as part of the 2024 provincial budget. These changes aim to alleviate the burden on homebuyers, particularly first-time buyers, and stimulate the construction of rental housing.

Let’s delve into the three major adjustments:

Firstly, the threshold for eligibility under the first-time homebuyers’ exemption is being raised. Previously capped at a fair market value of $500,000, this threshold will now increase to $835,000, with the first $500,000 exempt from property transfer tax. Moreover, properties valued under $500,000 will enjoy complete exemption (good luck finding something under 500K in Victoria). These changes come into effect on April 1, 2024.

Secondly, the exemption for purchasers of newly built homes is also getting a boost. The threshold will escalate from $750,000 to $1.1 million on the fair market value, providing relief to homebuyers in a market where prices continue to climb. Homes falling between $1.1 million and $1.15 million will witness a phase-out range of the exemption. Like the first-time buyer changes, this adjustment will be effective April 1, 2024.

Thirdly, an exemption will be available for new purpose-built rental buildings. Effective for transactions occurring between January 1, 2025, and December 31, 2030 the BC Government will provide an exemption from the general property transfer tax on purchases of new qualifying purpose-built rental buildings. Generally, purpose-built rental buildings are those that are non-stratified and held as rentals on a monthly basis or longer for at least 10 years. The residential portion of the building must be entirely used for rental purposes and contain at least four apartments.

If you’d like more information, reach out to us at Sitka Law Group for a free initial consultation. Victoria Lawyers, Sitka Law Group is conveniently located on Shelbourne Street near the intersection of the borders of Victoria, Oak Bay and Saanich.