Great News for First-Time Buyers!

New Threshold for Property Transfer Tax Increases Housing Affordability

The Property Transfer Tax (PTT), a B.C. government tax collected on the purchase of a home sale, can add thousands of dollars to what buyers need to pull out of their pockets to complete on their purchase.

The government recognized the burden this put on first-time buyers, who already needed to save a significant amount of money for a down-payment and closing fees. Therefore there was an exemption available to first-time buyers, who would be exempt from the PTT if they bought a home with a value equal to, or less than, the threshold.

Immediately prior to February 21, 2007, the exemption thresholds for first-time buyers was $325,000 in the Capital, Greater Vancouver and Fraser Valley Regional Districts and $265,000 for the rest of the province.

Last September, the B.C. Real Estate Association recommended the government develop a phased three-year plan leading to elimination of the Property Transfer Tax (PTT) by 2009, beginning with an update of the tax exemption thresholds for first-time buyers to $375,000, province wide.

The government has adopted the latter part of that recommendation word for word, and the new $375,000 PTT exemption threshold for first-time buyers came into effect on February 21, 2007. The amount applies to all areas of the province, replacing the former threshold.

This is an important change since home prices have been steadily rising, and $325,000.00 doesn't buy what it used to. With the threshold now at $375,000.00, first-time buyers have a much greater selection of properties to choose from that still allow them this important tax-saving exemption. Great news for first-time buyers!