Changes to the Property Transfer Tax

You may or may not have heard, but there were changes announced for the Property Transfer Tax (PTT) yesterday. The PTT is a provincial tax paid by buyers when a property changes title (so when you purchase).

Since it's introduction in the late 80's, it has been calculated at:
1% on the first $200K and 2% on the balance of the purchase price.

 

First time home buyers are exempt from paying for homes up to $475K. There is a partial exemption between $475K and $500K.

 

Here is a quick summary of the changes:

 

1.    There are no changes to the first time home buyer exemption limits;

2.    All buyers (whether first time buyers or not) no longer pay PTT on purchases of NEW homes up to $750,000 in value; note the buyer must be a Canadian citizen or a permanent resident; there is a partial exemption for homes between $750,000.00 and $800,000.00;

3.    PTT has changed so that there is now a 3% tax on amounts over $2,000,000.00. The 3% tax is only paid on the amount over $2,000,000.00, not the full price.

 

So, great news if you are purchasing a newly built home (up to $750K), not so great news for those buying over $2M...and no change if you are buying a re-sale property.

 

In my opinion, much more could have been done, namely increasing the threshold from $200K for the 1% calculation to help the many buyers purchasing re-sale property.

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