Chapter 19 - Taxes On Real Property Flashcards
If a purchaser is un aware of GST additionally to the selling price of a home, who could the fault land on?
The licensee (Realtor)
If Real Property is listed in Schedule V, what could this mean?
The property may be exempt from taxes
What does PTT Stand for?
Property Transfer Tax
In a real estate transaction, who is responsible to pay GST to the government
The buyer (referred to as the recipient)
When does a buyer pay GST on the deposit
Only once the deposit belongs to the owner - This occurs when the closing occurs
What is an input tax credit?
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
What is the New Housing Rebate?
A rebate allowing purchasers buying houses of $450,000.00 and less to recover a portion on the GST
How long does a purchaser have to file a rebate application?
2 years of the purchase
Define the Term “Builder” as per the ETA
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
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?
The builder
If selling documents are “silent” on if GST is included or excluded, what do the courts rule?
The GST will be extra to the selling price
Who is responsible to pay the PTT
The buyer - also referred to as the transferee in the PTTA
Describe “Fair Market Value”
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
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
True
What are the applicable rates as per the PTT?
. 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
What is the maximum size and cost of a property in order to qualify for the first time home buyers program?
$500,000.00 and 0.5 hectors
If two people, both never owning a home before purchase together can they combine their values under the First Time Home Buyers Program?
No
When must the PTT be paid to the government?
Before the buyer’s interest in the property can be registered
What does PTT stand for?
Property Transfer Tax
If real property is listed in Schedule V, what could it mean?
The property may be exempt from taxes
What % is the Foreign Home Buyers tax
15% until 2018, 20% after 2018
In references to withholding taxes for non-residents selling property, what must a buyer do?
Withhold 25% of the gross proceeds and remit to the CRA
Explain Capital Gains upon the sale of Real Property
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.
True or False:
Someone who lives in their property for one year or longer is not required to pay taxes on capital gains
True
Describe Net Taxable Value
The actual value of real property as determined by the assessor, less any exemptions which apply
Describe “Mill Rate”
A given tax rate that applies with respect to each $1000.00 of the net taxable value
Who is liable to pay property tax?
The owner of the interest in land
What are the two categories of taxable property in BC
Land & Improvements
In retrospect to “Tax” what does “Land” define?
Land covered by water, queries, sand and gravel, but excludes coal or other minerals
What is the purpose of the assessor acting under the “Assessment Act”
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
Describe “Actual Value”
The market value of the fee implement interest in land and any improvements in or on it
What is the relevant date for establish “Actual Value”
July 1st of the year during which the assessment roll is completed
As per the Assessment Act, what factors can the assessor consider in determining Actual Value?
- Present Use
- Location
- Original Cost
- Replacement Cost
- Revenues or Rental Value
- Selling Price of Land and Comparable land and Improvements
- Economic and functional obsolescence
- Any other circumstances affecting value
What methods are used so the taxpayer in BC is informed of the assessed value of tax liability of his or her property
The Assessment Notice and the Tax Notice
According to the Assessment Act, what date is the assessor to use the land title office records as they stand on?
November 30th
For real estate classified as “Farm Land” what must the assessor consider?
Only the value of the property as a farm, excluding value attributed to any other potential uses
What is the Home Owners Grant?
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
What are the requirements in retrospect to the value of housing to qualify for the Home Owners Grant
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
Who may a taxpayer file a complaint with?
The Property Assessment Review Panel
How does one file a complaint to the Property Assessment Review Panel?
In wiring, and filed with the assessor responsible with assessment no later than January 31
For 2019 and subsequent years what will the SVT be levied at?
- 0% for foreign owners and satellite family members
0. 5% for Canadian Citizens and Perm. Residents
What is the taxable amount owed under the Vacancy Tax
1% if the home is empty 6 months of the year