Does the Buyer or the Seller Pay Property Transfer Tax in BC?
This answer covers the law of British Columbia.
The buyer pays property transfer tax in British Columbia, not the seller. The buyer (transferee) pays the tax when applying to register a taxable transaction at a land title office, and must file a return whether or not the transaction is exempt.
In practice, the buyer or their legal professional files the return and pays the tax at the Land Title Office when the transfer is registered, and legal professionals usually do this. The Land Title Office may refuse registration if the tax isn't paid on the registration date. Legal professionals file using the web-based return through the Land Title and Survey Authority of B.C.. So the tax is normally dealt with as part of closing, and you should expect to have the money ready.
The tax is charged on fair market value, and for open-market sales registered within a few months of the contract the purchase price is generally a good indicator. The general rates are 1% up to and including $200,000, 2% on the portion above that up to $2,000,000, and 3% on the portion above $2,000,000. On $500,000, that is $8,000. Exemptions and additional taxes can change the result, so confirm your situation.
Key takeaways
- The buyer (transferee) pays property transfer tax when applying to register a taxable transaction, and must file a return even if the transaction is exempt.
- The buyer or their legal professional files the return and pays the tax when the transfer is registered, and legal professionals usually do this.
- The Land Title Office may refuse registration if the tax isn't paid on the registration date.
- The general rates are 1% up to $200,000, 2% on the portion up to $2,000,000, and 3% above that, so $500,000 produces $8,000.