Property Transfer Tax
For legal professionals, the new web filing property transfer tax return is now available and can be used to file property transfer tax. The PDF forms are still available until further notice. Learn more about the new web form.
When you purchase or gain an interest in property that is registered at the Land Title Office, you're responsible for paying property transfer tax and filing a property transfer tax return.
In most cases, property transfers are completed by a legal professional.
Transaction types include:
- Agreement for sale
- Life estate
- Fee simple
- Court order
- Quit claim
- Lease modification
- Prepaid lease
You pay the tax based on the fair market value of the property (land and improvements) at the date of registration with the Land Title Office, unless you qualify for an exemption or purchase a pre-sold strata unit.
Property transfers are routinely audited. If an audit determines you owe tax, you will receive a notice of assessment. You need to pay the balance shown on the notice to avoid additional interest.
If you disagree with the notice of assessment, you can file an appeal.
Property transfer tax should not be confused with annual property taxes. Annual property taxes are paid yearly for each property you own or have a registered interest in to fund services in your area.
The property transfer tax rate is:
- 1% on the first $200,000,
- 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000,
- 3% on the portion of the fair market value greater than $2,000,000, and
- If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000 (effective February 21, 2018).
If the property is classified as residential and farm, or is residential mixed class (such as residential and commercial), you pay the further 2% tax on only the residential portion of the property.
Estimate Tax Payable
Use the property transfer tax calculator to estimate the tax you owe based on the fair market value of your property.
Note: The calculator doesn't calculate the further 2% tax on residential property greater than $3,000,000 or the additional property transfer tax on residential property transfers to foreign entities or taxable trustees. Use our Property Transfer Tax Calculator for Residential Property over $3,000,000 (PDF) to help you determine the tax amount owing if you’re using the PDF return.
If the fair market value of a property is $650,000, the tax paid is $11,000.
- 1% on the first $200,000 = $2,000
- 2% on the remaining $450,000 = $9,000
- $2,000 + $9,000 = $11,000
If the fair market value of a property classified entirely as residential is $4,500,000, the tax paid is $143,000.
- 1% on the first $200,000 = $2,000
- 2% on the portion greater than $200,000 and up to and including $2,000,000 = $36,000 ($2,000,000 - $200,000 = $1,800,000 X 2% = $36,000)
- 3% on the portion greater than $2,000,000 = $75,000 ($4,500,000 - $2,000,000 = $2,500,000 X 3% = $75,000)
- A further 2% on the portion greater than $3,000,000 = $30,000 ($4,500,000 - $3,000,000 = $1,500,000 X 2% = $30,000)
- $2,000 + $36,000 + $75,000 + $30,000 = $143,000
Fair market value is the price that would be paid by a willing purchaser to a willing seller for a property (land and improvements) in the open market on the date of registration.
A property transfer is considered to be in the open market when anyone likely to be interested in purchasing the property can make an offer. For example, the seller lists the property with a realtor or advertises it for sale.
The purchase price is considered the fair market value in most cases as long as you register the property within a few months of signing the sales contract. Otherwise, you will need to verify that the purchase price is fair market value if:
- there was a significant change in value
- the condition of the property changed
- you didn't purchase the property in the open market
Non-Open Market Transfers
When a property transfer doesn't take place in the open market, fair market value may be determined using other means such as:
- a recent independent appraisal, or
- the property valuation provided by BC Assessment
Generally, the property valuation provided by BC Assessment reflects your property’s fair market value as of July 1 of the previous year. For example, the 2018 roll value reflects market conditions at July 1, 2017. This means that the assessed value may not reflect the current fair market value of your property.
The current property valuation provided by BC Assessment can’t be used in certain cases, such as when:
- changes have been made to the property (e.g. rezoning) since the assessment
- market conditions in the area of the property have changed since the assessment
- the land is classified as farm land (class 9)
- new or additional construction has been completed