Chapter 19 - Taxes on real property Flashcards
What is the self supply rule?
The builder to have sold the home to himself at the time of move-in. Builder will owe GST on the sale even though there was no actual sale. Would also apply if they rent out to a long-term tenant prior to sale.
GST exemptions on purchase/sale of real property in BC?
Buyer is an individual who is buying a residential complex such as a detached home.
Where seller is a non-resident of Canada.
Property transfer tax
Applies to any transfer of an interest in real property that is registered at the Land Title Office.
Payable by the buyer and is based on the fair market value.
1% on the first $200K, 2% of $201K-$2M, 3% anything over $2M. If residential, another 2% over $3M.
Exemptions for property transfer tax
First Time Home Buyer’s Program. Must meet requirements:
- Canadian citizen or permanent resident
- Lived in BC at least a year prior (or filed 2 income tax returns from BC in the last six years)
- Have never owned a registered interest in real property
Property must be
- Primary residence
- FMV < $835K
- lot size < 0.5 hectares (1.24 acres)
- contain only residential improvements
Exemption on first $500K of property value
(If purchased prior to April 1, 2024, FMV < $500K)
Foreign Buyer’s Tax
February 2024, ban on foreign ownership of Canadian housing extended another 2 years
20% on purchase price, and was extended outside of Greater Vancouver Regional District to: CRD (Vic), Fraser Valley, Okanagan and Nanaimo Regional Districts
Applies to residential property only
Capital gains taxation
Non-residents selling Canadian real estate subject to income taxes on any sale.
Capital gains on sale of property, 50% of the gains taxable at individuals tax level (increased to 66% June 2024); amounts > $250K
Exempt if property was primary residence of seller
Property tax
Based on the actual value of the real property as determined by the assessor
Tax rate applies with respect to each $1,000 of net taxable value (mill rate)
Liability to pay property tax on the owner of the property
“Registered” as in who is on title November 30th year where assessment roll is completed
Tax exemptions and reliefs for property tax
Homeowner grant (for principal resident only) - resident of BC
Seniors grant, veterans, people with disabilities
Tax deferal: 55+ in age, or surviving spouse of any age, permanently disabled can defer up to 100% of primary residence property tax. Requires 25% minimum home equity.
- Also families with children. Requires 15% equity.
- Shows up as registered charge on title
Process of property assessment
July 1 Valuation date for Assessment Roll
October 31 State and condition of property is established for assessment notice
November 30 Ownership established
December 31 Assessment rolls and totals are produced and mailed to owners
January 31 Last date for filing an appeal of assessed value to Property Assessment Review Panels
March 31 Property assessment confirm and authenticate Assessment Roll
April 30 Deadline for filing an appeal to the Property Assessment Appeal Board; Owners cannot appeal property taxes, but can appeal property assessments (i.e. valued too high)
Property assessment appeal process
Property Assessment Review Panel
Property Assessment Appeal Board
- on point of law only (same for all the below)
Supreme Court of BC
BC Court of Appeal
Supreme Court of Canada
