The Property Transfer Tax (PTT) is charged at a rate of:
- 1% on the first $200,000,
- 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000; and
- 3% on the portion of the fair market value greater than $2,000,000.
- If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000.
If the property is classified as residential and farm, or is residential mixed class (such as residential and commercial), you pay the further 2% tax only on the residential portion of the project.
If you’re a foreign entity or taxable trustee and the residential property is located in Metro Vancouver, you also pay the 15% additional property transfer tax unless you have a Canadian work permit through the BC Provincial Nominee Program.
The Property Transfer Tax (PTT) was introduced in 1987 as a wealth tax by the BC government to discourage speculation at the high end of the real estate market.
Then the $200,000 price threshold covered 95% of all homes sold. Just 5% of all sales had the 2% portion of the PTT applied.
Today, 96% of homes in Greater Vancouver sell for more than $200,000. If the 2% portion of the PTT was applied to just the top 5% of all home sales (as originally intended), the $200,000 threshold would have to be raised to more than $1.4 million.