If you're buying real estate in Victoria, one cost that can catch buyers off guard is the Property Transfer Tax (PTT). Unlike property tax, which you pay yearly, PTT is a one-time tax paid when you purchase or gain an interest in real estate.

Here's some information, including how much it costs — and whether you might be eligible for an exemption.

How Much is the Property Transfer Tax?

The amount you pay is based on the fair market value of the property on the date it is registered with the Land Title Office. Here's the standard calculation:

• 1% on the first $200,000

• 2% on the portion between $200,001 and $2,000,000

• 3% on the portion over $2,000,000

• An additional 2% on the portion over $3,000,000, unless the property will be your principal residence

For example, if you're buying a $750,000 home, your PTT would be:
(1% of $200,000) + (2% of $550,000) = $2,000 + $11,000 = $13,000

First-Time Home Buyer Exemption

The First Time Home Buyers' Program can help reduce or eliminate PTT for qualifying buyers.

To qualify, you must:

• Be a Canadian citizen or permanent resident

• Have lived in BC for at least 12 months prior to the purchase (or filed at least 2 BC income tax returns in the last 6 years)

• Have never owned a principal residence anywhere in the world

• Be buying a property that:

  • Has a fair market value of $500,000 or less (full exemption)

  • Is between $500,001 and $524,999 (partial exemption)

  • Is 1.24 acres or less (0.5 hectares)

  • Will be your principal residence, and you move in within 92 days of closing

Newly Built Home Exemption

Buying a brand new home? You may qualify for the Newly Built Home Exemption — even if you're not a first-time buyer.

You may be exempt if:

• The home is newly constructed or substantially renovated

• It will be your principal residence

• The property's fair market value is $750,000 or less (full exemption)

• The land is 1.24 acres or smaller

• You move in within 92 days of closing

Partial exemptions:

Available for homes priced between $750,001 and $799,999

How Do You Claim an Exemption?

Your legal representation will complete the exemption paperwork when you sign your purchase documents. Make sure to tell your lawyer or notary early in the process if you think you may qualify.

Property Transfer Tax can be a substantial expense. The good news is that you may be able to reduce or eliminate it for qualifying buyers. Whether you are buying your first home, investing in new construction or just want to understand what your costs might be, I'm here to help!