Chapter 19 Taxes On Real Property Flashcards
Determines the real property tax rate for general tax purposes in organized territories of BC
Local municipal council
Affects the real property taxation in BC
School act
What are the taxes for real property?
GST, PTT, Property Tax, foreign buyer’s tax, vacancy tax
GST is designed to apply to every transaction that is not specifically exempted from tax
Excise Tax Act
Required to collect gst as an agent to the government
Sellers
Where can the buyer claim gst back
Input tax credit
What are the exemptions to pay gst upfront?
Commercial real property where gst is registered by closing
Non resident seller
Two types of recovery mechanisms for gst
Input tax credit
Rebates
New housing rebates
House bought less than 450,000
Dispute resolution process to CRA of gst
You have 90 days Appeals division Tax court of canada Federal court of appeal Supreme court of canada
Commercial - buyer has to report gst
Residential - seller collects gst
No GST exemptions for residential housing
Exemption for sales by a person who’s not a builder (holds interest in real property while being constructed)
Self supply rule
Builder moved into the home before sale
Buyer: to include gst, if applicable
Seller: purchase price does not include gst, if applicable
PTT
Transfer of interest of real property
The amount of tax is based on the fair market value at the date of registration, subject to any application exemptuons.
PTT CALCULATIONS
1% - 200,000
2% - 200,000 to 2,000,000
3% - >2,000,000
If residential, extra 2% for >3,000,000
Exemptions for PTT
🔵Related
🔵separation agreement under family law act
🔵Family farms
PTT Exemptions under the first time home buyer’s program
🔵Canadian citizen or resident
🔵must have lived for atleast a year prior purchase
🔵FMV (fair market value)
less than 500,000
🔵not owned any property anywhere in the world
🔵must be used as a principle residence
🔵0.5 hectares or smaller
PTT EXEMPTIONS
🔵first time home buyer should be less than 500,000 (partial: 25,000)
🔵newly built should be less than 750,000
🔵partial exemption can apply if over 750,000 but less than 800,000
GST seller has an obligation to collect if residential
PTT the seller has no obligation to collect
GST - appeal, tax court, federal court, supreme court
PTT supreme court of BC, bc appeal court, supreme court of canada
FOREIGN BUYER’s tax
Extra 20% PTT
foreign nationals
Foreign corps
Taxable trustees
Anti avoidance rule
Penalize any steps taken that are inconsistent with the spirit of the law
If a canadian citizen’s spouse dies and leaves the title to family home to the surviving foreign national spouse
Foreign buyers tax might potentially apply to transfer title even though basic ptt would be relieved
Foreign buyer’s tax
If within a year of purchase the individual becomes a citizen or resident, can apply for rebate and claim the tax paid
Mill rate
Tax rate applies to each $1000 of net taxable value
Net taxable value
Actual value of the real property as per the assessor, less any exemptions that apply
BC ASSESSMENT
Assesses real property in BC
School tax - every property is charged to share cost of providing education
Additional tax rate 0.2% between 3-4M
Additional 0.4% value exceeding 4M
Owner as per Assessment act
Registered owner of life estate
Registered owned of estate in fee simple
Agreement for sale and purchase, the holder of last registered agreement
Holder or occupier
Community charter
Person, in any yeat is assessed as owner of land, improvements or both, in a municipality or a taxable interest in them
The only time a tenant is reliable for property tax payment
Is when occupying a crown or municipal land
Two general catergories of taxable properties in bc
Land
Improvements
Tax notice
July valuation date of assessment roll Oct state and condition of property Nov identify owner Dec notice sent out Jan last date for review March authenticate April appeals
Speculation Vacancy Act (SVT)
2% foreign buyers
0.5% citizens and residents not member of satellite family
