Posted on
March 7, 2024
by
Shannon Dupuis
If you haven't heard yet on the news, the new 2024 BC budget is going to bring some changes to the real estate world! So let's start with the good news! NEW PROPERTY TRANSFER TAX EXEMPTIONS
Starting on April 1, 2024
1. FIRST-TIME HOME BUYERS - RESALE PROPERTIES As of April 1, 2024, the threshold for the exemption to the property transfer tax for first-time homebuyers is being increased up to $835,000. Properties with a fair market value of under $500,000 will be completely tax-exempt.Previously, to quality for a full property transfer tax exemption, the property needed to be $500,000 or less. We all know in Vancouver, this is pretty hard to achieve. Many people have been waiting for the threshold to be increased, so here it is! :)Here is a breakdown, taken from the Government of BC website.
To qualify for an exemption, at the time the property is registered you must:
- Be a Canadian Citizen or Permanent Resident
- Have either:
- Lived in B.C. for at least a year immediately before the date you register the property
- Filed at least 2 income tax returns as a B.C. resident in the last 6 taxation years immediately before the registration date
- Have never owned a registered interest in a property that was your principal residence anywhere in the world at any time
- Have never received a first-time home buyers' exemption or refund
And the property must:
- Only be used as your principal residence
- Have a fair market value of $835,000 or less (effective April 1, 2024)
- Be 0.5 hectares (1.24 acres) or smaller, and
- Contain only residential improvements
If all of the above requirements are met, then the purchaser will be exempt from property transfer tax on the first $500,000 of the purchase price of the property.
Note: If you purchase the home before April 1, 2024, to receive the full exemption, the fair market value must be $500,000 or less.
2. NEWLY BUILT HOME PROPERTY TRANSFER TAX EXEMPTION
If you are purchasing a newly built home, you do not need to be a first-time home buyer!
The newly built home exemption reduces or eliminates the property transfer tax on qualifying purchases of a principal residence.
- Full exemption: Effective April 1, 2024, the fair market value threshold for a full exemption for newly built homes is increased from $750,000 to $1,100,000.
- Partial exemption: A partial exemption is also available for properties with fair market values just above the threshold. The phase-out range is $50,000 above the threshold, with the complete elimination of the exemption at $1,150,000 for qualifying purchasers.
NOW FOR THE NOT SO GOOD NEWS... :(
3. NEW HOUSE FLIPPING TAXStarting in 2025, the province will implement a new “home-flipping tax” to target the profit made from selling a residential property within two years.
Sellers will see a 20% tax on profit if they sell the property within the first year of purchase, with the rate declining to zero while it approaches the second year. It will also apply to assignment contracts.
Exemptions will apply “for certain life circumstances” including separation, death, divorce and disability. The province has also pledged exemptions for sellers who “add to the housing supply or engage in construction and real estate development.”
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