Transfer of a recreational residence

You may be exempt from paying property transfer tax (PTT) when a related individual transfers a recreational residence or its interest to you.

For more general PTT information, see Bulletin PTT 001, Property Transfer Tax (PDF, 441KB).

Definitions

Related individual

A related individual includes:

• Your spouse, child, grandchild, great-grandchild, parent, grandparent or great-grandparent
• The spouse of your child, grandchild or great-grandchild
• The child or stepchild, parent, grandparent or great-grandparent of your spouse

Spouse

A person who is married to another person or is living with another person in a marriage-like relationship for a continuous period of at least 2 years. 

Note: Your sister, brother, uncle, aunt, niece or nephew is not considered to be a related individual. This means, for example, that you are required to pay PTT if your brother or sister transfers a recreational residence to you.

Recreational residence

A property is a recreational residence if it meets all of the qualifying criteria: 

• Before the transfer, the person transferring the property to you (the transferor) usually resided on the property on a seasonal basis for recreational purposes
  Note: When a trustee is involved in a transfer, the trustee becomes the transferor and this requirement applies instead to the settlor or the deceased
• The property is classified as residential by BC Assessment, including the land and any improvements on the land (for example, buildings)
• The land is 5 hectares (12.36 acres) or smaller
• The property has a fair market value of $275,000 or less

Note: To qualify for an exemption from PTT, the entire property must meet the above requirements, regardless of the interest you are acquiring in the property. For example, the property you are acquiring an interest in has a fair market value of $500,000, but your interest in the property is 50% ($250,000). In this case, you do not qualify for the exemption because the fair market value of the entire property exceeds $275,000.

For more information on determining fair market value, see Bulletin PTT 001, Property Transfer Tax (PDF, 441KB).

Transfer to two or more people

If a recreational residence is transferred to two or more people who are not all related individuals of the transferor, the exemption applies only to the interest acquired by the people who are related individuals of the transferor. For example, your mother transfers her recreational residence jointly to you and your fiancé.  Your fiancé and you have been dating for approximately one year to this point. The exemption applies only to the 50% interest acquired by you because your finance is not considered to be a related individual to your mother.

Transfers of partial interests (net interest passing)

If registered title to a property is held in joint tenancy, and one of the owners transfers their interest to a related individual, the ministry determines eligibility for the exemption based only on the partial interest being transferred (the net interest passing).

For example, A and B own a property as joint tenants and wish to transfer B's interest to C so that A and C will own the property as joint tenants.

A and B (joint tenants) → to →  A and C (joint tenants)

A’s interest in the property does not change as a result of the transfer. Therefore, the ministry determines whether C is exempt from paying PTT based on the transfer of the net interest (50%) in the property passing from B to C. This means that C may qualify for an exemption if B and C are related individuals.

Exemptions

The criteria for an exemption from PTT depend on the circumstances of the transfer.

Transfers not involving a trustee

When a related individual transfers a recreational residence or an interest in a recreational residence to you, you do not pay PTT if you meet the following criteria:

• You are a Canadian citizen or a permanent resident as defined in the Immigration and Refugee Protection Act (Canada)
• A trustee is not involved in the transfer

To claim this exemption, select or enter code 06 on the property transfer tax return.

Transfers through estate or trusts under wills

When you receive a recreational residence or an interest in a recreational residence through the estate of a deceased, or a trust set up under the will of a deceased, you do not pay PTT if you meet the following criteria:

• You are a Canadian citizen or a permanent resident as defined in the Immigration and Refugee Protection Act (Canada)
• The transferor is registered at the land title office as a trustee of the property being transferred
• The transferor is a trustee of the deceased’s estate or a trust set up under the deceased’s will
• You are a beneficiary of the estate or trust
• You and the deceased were related individuals at the time of their death

Only one recreational residence may be transferred from a deceased’s estate or a trust set up under the deceased’s will exempt from tax.

To claim this exemption, select or enter code 06 on the property transfer tax return.

Transfers through trusts settled during the lifetime of the settlor

The settlor is the person who gave the property that is being transferred to the trust estate, or gave assets to the trust estate to acquire property. The settlor does not have to be the creator of the trust.

When you receive a recreational residence or an interest in a recreational residence through a trust during the lifetime of the settlor, you do not pay PTT if you meet the following criteria:

• You are a Canadian citizen or a permanent resident as defined in the Immigration and Refugee Protection Act (Canada)
• The transferor is registered at the land title office as a trustee of the property being transferred
• You are a beneficiary of the trust
• You and the settlor of the trust are related individuals

Only one recreational residence may be transferred from a trust exempt from tax.

To claim this exemption, select or enter code 06 on the property transfer tax return.