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 only the further 2% property transfer tax

If you purchased a qualifying new purpose-built rental building between January 1, 2024 and December 31, 2024, you may have qualified 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.

Full exemption from the general property transfer tax

Purchases of qualifying new purpose-built rental buildings place between January 1, 2025 and December 31, 2030 are fully exempt from property transfer tax.

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 between January 1, 2024 and December 31, 2024 (to be exempt from the further 2% property transfer tax)
• Purchased between January 1, 2025 and December 31, 2030 (to be fully exempt from property transfer tax)
• Located in B.C.
• Newly built as a rental building
• Entirely used for rental purposes in the residential portion of the building

In addition to the above requirements, the rental building must not be a resale and must be non-stratified.

• If purchased before January 1, 2025, the rental building must not have been previously occupied as a residence.

• If purchased on or after January 1, 2025, the rental building must not have been previously occupied as a residence except by tenants renting on a monthly or longer-term basis, where there was no tenancy in place more than 24 months before the date of the transfer. This change supports the “building stabilization” model of rental-property development, allowing some tenants to lease from the developer and move in before the entire building is completed and transferred to the long-term owner.

If your property qualifies, you can claim the purpose-built rental exemption using the Property transfer tax return. If you have already completed your return, email PTTENQ@gov.bc.ca to apply for a refund.

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 
• 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 10th 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)