First Time Home Buyers' Exemption Price Limit in British Columbia

If you are buying your first home in British Columbia and the price is close to the exemption cap, a small difference in value can change how much property transfer tax you pay. It helps to know exactly what number is being tested and what happens just above it.

This article explains the current price limits, the land size limit, who must qualify, and what to expect if you land in the partial exemption range. It is general information, and a lawyer can confirm how it applies to your purchase.

This article covers the law of British Columbia.

The current price limits

For properties registered on or after April 1, 2024, the first time home buyers' exemption is a full exemption if the fair market value is $835,000 or less, and a partial exemption if it is above $835,000 but below $860,000. Before April 1, 2024, the figures were $500,000 and $525,000, so an older registration is judged against the old caps.

These caps are different from the newly built home exemption, which has its own higher limits of $1,100,000 for a full exemption and up to $1,150,000 for a partial one on titles registered on or after April 1, 2024. Rules can change with provincial budgets, so confirm the figures that apply on your registration date.

What value is tested against the cap

Property transfer tax is charged on fair market value, meaning the price a willing buyer would pay a willing seller in the open market on the registration date. For an open-market sale registered within a few months of the contract, the purchase price is generally a good indicator.

The purchase price may not equal fair market value if values or the property's condition changed, or if the purchase was not an open-market sale. For a non-open-market transfer, a recent independent appraisal or the BC Assessment value is used. BC Assessment values reflect the market on July 1 of the prior year and the property's condition on October 31, so they may not match current value, and they should not be used after rezoning, market changes or new construction.

Land size and property requirements

The property must be used only as your principal residence, contain only residential improvements, and be 0.5 hectares (1.24 acres) or smaller. A partial exemption is also available if the lot is larger than 0.5 hectares or has another building besides the principal residence.

If you are building on a vacant lot, the fair market value of the land plus the construction cost must stay under the same caps, and you must build and move in within the first year.

Who qualifies, and what happens with co-buyers

At registration, each buyer claiming the exemption must meet these tests:

• Be a Canadian citizen or permanent resident.
• Have lived in B.C. for at least one year before registration, or have filed at least two B.C. resident income tax returns in the last six taxation years.
• Never have owned a registered interest in a principal residence anywhere in the world.
• Never have received a first time home buyers' exemption or refund.

If not every purchaser qualifies, only the qualifying purchasers' ownership percentage is exempt, and foreign entities and taxable trustees are not eligible. This matters if you are buying with a parent, friend or partner who has owned a home before.

Partial exemption, occupancy and next steps

The exact amount of a partial exemption between the two caps depends on the official calculation, so ask your lawyer to confirm the figure before closing. You must move in within 92 days of the registration date and continuously occupy the home as your principal residence until the first anniversary of registration. A person who moves out before the first year may keep only part of the exemption, and the program can explain how that works at 1-888-841-0090 or PTTENQ@gov.bc.ca. The owner's death, or a transfer under a separation agreement or Family Law Act court order before the first anniversary, does not disqualify the claim.

A false declaration that you have never owned a principal residence or never received the exemption leads to a penalty equal to the exemption or refund claimed, on top of that amount. A qualifying buyer who did not apply at registration can apply for a refund from the first anniversary until 18 months after registration.

• Confirm your registration date and which price caps apply.
• Ask how fair market value will be established if the price is close to the cap.
• Check every co-buyer against the eligibility tests.
• Measure the lot and note any second building.
• Plan your move-in date within 92 days of registration.

Frequently asked questions