Purpose-built rental exemptions

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 have at least 4 apartments.

Exemption from the further 2% property transfer tax

If you’re purchasing a new qualifying purpose-built rental building on or after January 1, 2024, you may qualify for the purpose-built rental exemption from the further 2% property transfer tax on the amount of the residential property value that exceeds $3,000,000. This exemption was announced in Budget 2023.

Exemption from the general property transfer tax

Budget 2024 will build on this exemption and provide an exemption from the general property transfer tax on purchases of new qualifying purpose-built rental buildings that take place between January 1, 2025 and December 31, 2030. 

This will encourage the construction of new purpose-built rental buildings.

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On this page

• Does my property qualify?
• Apply
• Report a change in use
• Penalties

Does my property qualify?

To qualify, the purpose-built rental building must have at least 4 separate apartments at the time the property is registered at the Land Title Office, and must also be:

• Purchased on or after January 1, 2024 (to be exempt from the further 2% property transfer tax)
• Purchased between January 1, 2025 and December 31, 2030 (to be exempt from the general property transfer tax)
• Located in B.C.
• Newly built as a rental building
• Entirely used for rental purposes in the residential (Class 1) portion of the building
• Not a resale
• Not previously occupied as a residence
• Non-stratified

If your property qualifies, you can claim the purpose-built rental exemption using the Property transfer tax return.

Use requirements

To keep the tax exemption, you must:

• Within 92 days of registration, rent or offer for rent the entire residential portion of the building on a monthly basis or longer for at least 10 years, and
• Not change the use of the apartments (e.g. change the use to short-term rentals or stratified condominiums, or demolish the building). 

If the building or a portion of the building is sold within the 10 years or if another taxable transaction or event occurs (e.g., the building is stratified or the apartments are converted to short-term rentals), you must report the change and repay a portion of the exemption. The calculation of the amount you have to repay is based on the number of years left in the 10-year period and the percentage share you own.

The full exemption still applies if the change in use is a result of:

• Circumstances beyond your control,
• Reasonably required renovations or repairs, or
• Up to 2 apartment units are occupied by the owner or building manager, as long as the rest of the residential portion contains at least 4 units and is entirely rented or offered for rent on a monthly or longer basis.     

Report a change in use

You must report a change in use of the rental accommodation within 92 days of that change. Change in use includes:

• No longer renting or offering the entire residential portion of the building for rent on a monthly or longer basis,
• The residential portion of the building no longer being classified as residential (Class 1),
• The building no longer containing at least 4 separate apartments, or
• The building being stratified.

You report a change in use by notifying the administrator in writing.

If there is no change in use and the building remains a purpose-built rental for 10 years, you must submit a final declaration to the administrator to this effect within 92 days after the 10^th anniversary of the registration date. Failure to submit the final declaration may result in the issuance of a notice of assessment for the amount of the full exemption.

Penalties

The administrator can apply a penalty if you:

• Make a false or misleading application when claiming the exemption or refund (penalty equal to the amount of the full exemption), 
• Do not notify the administrator of a change in use (penalty equal to the amount of the exemption to be paid back),
• Provide a false or misleading notice (penalty equal to the amount of the exemption to be paid back),
• Notify the administrator of a change in use after the 92-day deadline (penalty equal to 0.2% of the exemption to be paid back for each week the notice is late), or
• Provide a false or misleading final declaration (penalty equal to the amount of the exemption to be paid back).