Just released this week.
The purchase of a newly built home valued at up to $750,000 will now be exempt from the property transfer tax, saving the buyer up to $13,000. Homes between $750,000 and $800,000 may qualify for a partial exemption.
This is a great incentive for purchasers of new construction homes narrowing the gap between the final cost of a resale home and a new house. I am happy to note our houses on 2749 Aquila Dr Abbotsford and 2755 Aquila Dr Abbotsford will qualify for the savings.
Taken from Government of BC website:
Newly Built Home Exemption
The Newly Built Home Exemption reduces or eliminates the amount of property transfer tax you pay when you purchase a newly built home.
- a house constructed and affixed on a parcel of vacant land
- a new apartment in a newly built condominium building
- a manufactured home that is placed and affixed on a parcel of vacant land
- an already constructed house that is removed from one parcel of land and affixed to another parcel of vacant land, as long as the house hasn’t been occupied since it was placed on the new parcel of vacant land
- a house resulting from the division of an existing improvement affixed to a parcel of land that was also subdivided, as long as this house hasn’t been occupied since the subdivision of the parcel
- a house converted from an existing improvement on the land. The previous improvement couldn’t have been used as residential (e.g. a warehouse converted into apartments).
If you qualify for the exemption, you may be eligible for either a full or partial exemption from the tax.
If you paid property transfer tax when you purchased vacant land and you now have a newly built home on the land, you may be eligible for a refund of the property transfer tax you paid.
To qualify, the property (land and improvement) must be registered at the land title office after February 16, 2016 and you must be:
- an individual
- a Canadian citizen or permanent resident (you will be asked to provide your Social Insurance Number (SIN) and your birthdate)
and the property must:
- be located in B.C.
- only be used as your principal residence
- have a fair market value of $750,000 or less
- be 0.5 hectares (1.24 acres) or smaller
You may qualify for a partial exemption, if the property:
- has a fair market value greater than $750,000 and less than $800,000
- is larger than 0.5 hectares
- has another building on the property other than the principal residence
Find out the amount of your exemption if you qualify.
To apply for the Newly Built Home Exemption, enter exemption code 49 on the Special Property Transfer Tax Return when the property is registered at a land title office.
After you have registered the property, you must meet occupancy requirements during the first year you own the property. To keep the tax exemption you must:
- move into your home within 92 days of the date the property was registered at the land title office, and
- continue to occupy the property as your principal residence for the remainder of the first year.
You will receive a letter at the end of the first year to confirm you meet these requirements.
You may keep part of the exemption if you moved out before the end of the first year.
If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, the exemption may still apply.
If you qualify for the exemption, but didn’t apply when you registered your home, you may apply for a refund.
If you registered a vacant lot and paid the tax, you may apply for a refund if:
- you have a newly built home on the land,
- you meet the qualifications for the Newly Built Home Exemption,
- the fair market value of the land plus the cost of the newly built home is:
- $750,000 or less for a full exemption
- $800,000 or less for a partial exemption
- you moved into your home and continued to occupy the property as your principal residence for the remainder of the first year.
If you move out before the end of the first year, you may be eligible for a partial refund of the tax you paid.
If the owner passed away, or the property is transferred because of a separation agreement or a court order under the Family Law Act before the end of the first year, you may still be eligible for a refund.
To apply for a refund, complete the Newly Built Home Application for Refund (PDF).
You must apply for a refund after the first anniversary of the registration date and within 18 months from the date you registered the property at the Land Title Office.
If you are interested in looking into a pre-sale or new construction home I would be happy to use my experience in construction and development to help you better understand the process of a pre-sale or new home purchase.