Chapter 19 - Taxes On Real Property

Question 1

If a purchaser is un aware of GST additionally to the selling price of a home, who could the fault land on?

Answer 1

The licensee (Realtor)

Question 2

If Real Property is listed in Schedule V, what could this mean?

Answer 2

The property may be exempt from taxes

Question 3

What does PTT Stand for?

Answer 3

Property Transfer Tax

Question 4

In a real estate transaction, who is responsible to pay GST to the government

Answer 4

The buyer (referred to as the recipient)

Question 5

When does a buyer pay GST on the deposit

Answer 5

Only once the deposit belongs to the owner - This occurs when the closing occurs

Question 6

What is an input tax credit?

Answer 6

A GST deduction a person can claim in their GST return for the amount of GST paid by that person on the acquisition of property or services

Question 7

What is the New Housing Rebate?

Answer 7

A rebate allowing purchasers buying houses of $450,000.00 and less to recover a portion on the GST

Question 8

How long does a purchaser have to file a rebate application?

Answer 8

2 years of the purchase

Question 9

Define the Term “Builder” as per the ETA

Answer 9

A party who holds interest in real property while it is being constructed, including anyone who holds an interest in a newly constructed property after the construction is completed but before it is first occupied as a place of residence

Question 10

By virtue of the “self-supply” rule, if a builder sells a home the lived in prior to the sale, who is responsible for the GST?

Answer 10

The builder

Question 11

If selling documents are “silent” on if GST is included or excluded, what do the courts rule?

Answer 11

The GST will be extra to the selling price

Question 12

Who is responsible to pay the PTT

Answer 12

The buyer - also referred to as the transferee in the PTTA

Question 13

Describe “Fair Market Value”

Answer 13

The amount that would of been paid for the property had it been sold in an open market by a willing buyer free of any mortgage or other charge

Question 14

True of False:
When considering Commercial Real Property the PTT is generally calculated including some machinery or equipment that might be sub just to the PST as well

Answer 14

True

Question 15

What are the applicable rates as per the PTT?

Answer 15

. 1% on the first $200,000.00
. 2% $200,000 to $2,000,000.00
. 3% $2,000,000.00 and larger
. 5% grater than $3,000,000.00

Question 16

What is the maximum size and cost of a property in order to qualify for the first time home buyers program?

Answer 16

$500,000.00 and 0.5 hectors

Question 17

If two people, both never owning a home before purchase together can they combine their values under the First Time Home Buyers Program?

Answer 17

No

Question 18

When must the PTT be paid to the government?

Answer 18

Before the buyer’s interest in the property can be registered

Question 19

What does PTT stand for?

Answer 19

Property Transfer Tax

Question 20

If real property is listed in Schedule V, what could it mean?

Answer 20

The property may be exempt from taxes

Question 21

What % is the Foreign Home Buyers tax

Answer 21

15% until 2018, 20% after 2018

Question 22

In references to withholding taxes for non-residents selling property, what must a buyer do?

Answer 22

Withhold 25% of the gross proceeds and remit to the CRA

Question 23

Explain Capital Gains upon the sale of Real Property

Answer 23

When a property is sold for a price greater than what it was purchased for, the seller may have to pay 50% of the difference

Example- a house bought for $1,000,000.00 sells for $1,500,000.00 50% of $500,000.00 would contribute to the sellers taxable income.

Question 24

True or False:

Someone who lives in their property for one year or longer is not required to pay taxes on capital gains

Answer 24

True

Question 25

Describe Net Taxable Value

Answer 25

The actual value of real property as determined by the assessor, less any exemptions which apply

Question 26

Describe “Mill Rate”

Answer 26

A given tax rate that applies with respect to each $1000.00 of the net taxable value

Question 27

Who is liable to pay property tax?

Answer 27

The owner of the interest in land

Question 28

What are the two categories of taxable property in BC

Answer 28

Land & Improvements

Question 29

In retrospect to “Tax” what does “Land” define?

Answer 29

Land covered by water, queries, sand and gravel, but excludes coal or other minerals

Question 30

What is the purpose of the assessor acting under the “Assessment Act”

Answer 30

To provide an equitable bae of assessed values, with the appropriate classification on which to apply tax levies for general, school, hospitals, and other purposes

Question 31

Describe “Actual Value”

Answer 31

The market value of the fee implement interest in land and any improvements in or on it

Question 32

What is the relevant date for establish “Actual Value”

Answer 32

July 1st of the year during which the assessment roll is completed

Question 33

As per the Assessment Act, what factors can the assessor consider in determining Actual Value?

Answer 33

1. Present Use
2. Location
3. Original Cost
4. Replacement Cost
5. Revenues or Rental Value
6. Selling Price of Land and Comparable land and Improvements
7. Economic and functional obsolescence
8. Any other circumstances affecting value

Question 34

What methods are used so the taxpayer in BC is informed of the assessed value of tax liability of his or her property

Answer 34

The Assessment Notice and the Tax Notice

Question 35

According to the Assessment Act, what date is the assessor to use the land title office records as they stand on?

Answer 35

November 30th

Question 36

For real estate classified as “Farm Land” what must the assessor consider?

Answer 36

Only the value of the property as a farm, excluding value attributed to any other potential uses

Question 37

What is the Home Owners Grant?

Answer 37

A type of tax relief from property taxes for an owner of an eligible property, if he or she occupies it as a principle resident - $570.00

Question 38

What are the requirements in retrospect to the value of housing to qualify for the Home Owners Grant

Answer 38

Having an assessed value of up to $1,650,000.00. Phased out entirely for homes having an assessed value of $1,764,000.00

Question 39

Who may a taxpayer file a complaint with?

Answer 39

The Property Assessment Review Panel

Question 40

How does one file a complaint to the Property Assessment Review Panel?

Answer 40

In wiring, and filed with the assessor responsible with assessment no later than January 31

Question 41

For 2019 and subsequent years what will the SVT be levied at?

Answer 41

2. 0% for foreign owners and satellite family members

0. 5% for Canadian Citizens and Perm. Residents

Question 42

What is the taxable amount owed under the Vacancy Tax

Answer 42

1% if the home is empty 6 months of the year