New PTT Threshold
BC's Property Transfer Tax (PTT) is a fee paid by all non-first time buyers, with some exemptions we'll go over. For many years the threshold has been set at $475,000 with a sliding scale for a rebate up to $500,000. The PTT was introduced in 1987 at a time that if you were spending $475,000 you were considered very wealthy. Take a look at what properties under $475,000 in White Rock got you in 1987. Back then you could buy 1.54 acres on Marine Drive for $420,000! It's apparent that it wasn't first time buyers making those purchases. To put that in perspective, only 0.17%, or one out of every 600 homes sold in White Rock in 1987 were over $475,000.
Recently the government announced that the ceiling will be raised to $500,000 for a full rebate. A property on the higher end of the threshold back in 1987 is worth $3,000,000 now. That's a 600% increase whereas the PTT limit has only increased by 5%. Today, there's no such thing as a detached home in White Rock for under $475,000. The lowest priced home in White Rock today, February 25, 2017 is a rancher on King George for $779,000. Here's a list of properties under $500,000 in White Rock today.
As a first time buyer you're exempt from PTT as long as your purchase price is under 500,000. Anything over that you will need to pay 1% on the 1st $200,000 and 2% on every dollar after that. There's specific guidelines to the exemption that you can see on the BC Government Website.
If you're not a first time buyer there is still a chance of avoiding the PTT. If you're purchasing a BRAND NEW property that's less than $750,000 before tax then you will qualify for the exemption as well. Again, you have to meet specific criteria which you can see here. Newly Built Home Exemption.
If you're spending over $2,000,000 the PTT payable is a flat 3% on the whole amount.
Something to keep in mind is that the PTT is payable at closing to your lawyer and does not form part of the mortgage.