Property Transfer Tax When a Parent Adds You to Title in BC

A parent may add you to the title of their home for estate planning, to help you qualify for a mortgage, or simply to share ownership. Because no one is buying the house on the open market, many people assume no tax is involved. In British Columbia, that assumption can be costly.

This article explains how property transfer tax (PTT) is generally approached when an adult child is added to a parent's title. Whether tax is owed on your situation depends on the facts, so use this as a map of the questions to ask, not as a final answer.

This article covers the law of British Columbia.

Who files and pays when the transfer is registered

The buyer, called the transferee, pays PTT when applying to register a taxable transaction at a land title office. The transferee must also file a return whether or not the transaction is exempt. In a title change, you are the person receiving an interest, so the filing duty generally falls on you.

In practice, the buyer or their legal professional files the return and pays at the Land Title Office when the transfer is registered, and legal professionals usually do this. The office may refuse registration if the tax is not paid on the registration date. Legal professionals file through the web-based return at the Land Title and Survey Authority of B.C..

What value is the tax based on?

PTT is charged on fair market value, which means the price a willing buyer would pay a willing seller in the open market on the registration date. When a parent adds you for little or nothing, the amount written on the transfer may not reflect that value.

For transfers that are not open-market sales, the ministry points to a recent independent appraisal or the BC Assessment value. 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. They should not be used after rezoning, market changes or new construction, or for farm class 9 land.

The general rates are 1% on value up to and including $200,000, 2% on the portion above $200,000 up to and including $2,000,000, and 3% on the portion above $2,000,000. A further 2% applies to the residential value above $3,000,000. As an illustration, tax on a $500,000 value is $2,000 plus $6,000, totalling $8,000. How much of the home's value is counted when only a share of title changes hands is a question to confirm with a lawyer.

Exemptions and reduced rules that may be relevant

Exemptions are claimed on the return using an exemption code, and some use separate forms. Which one fits depends on why the name is being added. Possibilities to discuss include the following.

• First time home buyers' exemption: you must be a Canadian citizen or permanent resident, have lived in B.C. for at least one year (or filed at least two B.C. resident tax returns in the last six taxation years), and have never owned a registered interest in a principal residence anywhere in the world or received this exemption before.
• The property must be used only as your principal residence, contain only residential improvements, and be 0.5 hectares or smaller. A partial exemption may be available if the lot is larger or has another building.
• Price limits for registrations on or after April 1, 2024 are a full exemption at $835,000 or less and a partial exemption above that but below $860,000.
• If not every purchaser qualifies, only the qualifying purchasers' ownership percentage is exempt.
• Form PTT-003 covers several situations, including a change from joint tenancy to tenancy in common.

If you claim the first time home buyers' exemption, you generally need to move in within 92 days of registration and live there as your principal residence until the first anniversary. A person who moves out before the first year may keep only part of the exemption, and 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. How this applies to you is worth confirming with a lawyer. A false declaration about never having owned a home or received the exemption leads to a penalty equal to the amount claimed, on top of that amount.

Other taxes that can come up

If you are a foreign national, additional PTT may apply. It is charged on the fair market value of your proportionate share, on the residential portion only, in the Capital Regional District, Fraser Valley Regional District, Metro Vancouver Regional District, Regional District of Central Okanagan and Regional District of Nanaimo. The rate that applies should be confirmed with a lawyer before you sign anything. A foreign national is an individual who is one under the federal Immigration and Refugee Protection Act.

A confirmed B.C. Provincial Nominee, as an individual buying a principal residence with a valid nomination certificate, is exempt from the additional PTT, and this can be claimed once. Family members are not exempt and pay on their proportionate share if they are also foreign nationals. Your status should be confirmed before you sign anything.

The BC home flipping tax can apply when a taxable residential property owned for less than 730 days is sold or otherwise disposed of. A disposition between related persons is exempt only if a return is filed. If a parent bought recently, ask about this.

What to do next

Evading the tax through missing, incorrect or misleading information means paying the corrected tax plus a penalty equal to the amount correctly paid, and returns can be audited within six years from the date the transfer is registered. Get the structure right before the transfer is registered.

• Write down why the name is being added and how ownership will be shared.
• Gather a recent appraisal or the latest BC Assessment notice.
• Confirm your citizenship or immigration status and your history of owning a home.
• Ask a lawyer which exemption code, if any, fits and what the return must show.
• Check how recently the parent bought the property.

Frequently asked questions