Changes to First-Time Home Buyers’ Program

The provincial government has announced changes to the First-Time Home Buyers’ Program — to increase the fair market value threshold of property that qualifies for a property transfer tax exemption and to increase mortgage pay-down limits

Effective for applications for registration of transfers received by the Land Title and Survey Authority on or after February 16, 2005, the fair market value threshold for properties in the Capital Regional District, Greater Vancouver Regional District, and Fraser Valley Regional District is increased to $325,000 from $275,000. The fair market threshold for properties located outside these regional districts is increased to $265,000 from $225,000.

The mortgage pay-down limits are also increased for applications for registration of transfers received on or after February 16, 2005. In the Capital Regional District, Greater Vancouver Regional District and Fraser Valley Regional District the pay down limit is increased to the greater of $13,000 and the amount that would reduce the mortgage to 70% of the fair market value of the property. For properties located outside these regional districts, the pay-down limit is increased to the greater of $10,600 and the amount that would reduce the mortgage to 70% of the fair market value of the property.

Mortgage pay-down limits for applications for registration of transfers received by the Land Title and Survey Authority prior to February 16, 2005 are unchanged at the greater of 70% of the fair market value of the property and $11,000 or $9,000 depending on the area of the province in which the property is located.

The electronic First Time Home Buyers’ Property Transfer Tax Return, which is used by those electronically filing transfers through the Land Title and Survey Authority, has been revised to calculate the tax payable based on the new threshold and mortgage pay down requirements. This is the only version of the return that can now be selected from the Land Title and Survey Authority menu.

The previous version of the electronic return will continue to be accepted for applications for registration of transfers by the Land Title and Survey Authority. Calculation of the tax due on an application for registration of a transfer submitted using this version of the return will not be affected unless the property is in the Capital Regional District, Greater Vancouver Regional District, or Fraser Valley Regional District, and has a fair market value between $275,000 and $325,000, or is outside these regional districts, and has a fair market value between $225,000 and $265,000.

In these instances, use of the previous version of the return will result in an incorrect amount of tax being paid. A request for a refund of the difference in tax paid should be made in writing to the Administrator, Property Transfer Tax. Requests for refunds may be faxed to 250 953-3094 in Victoria or mailed to PO Box 9427 STN PROV GOVT Victoria BC V8W 9V1.

Further information on the First Time Home Buyers Program is available on the Property Taxation Branch website (www.rev.gov.bc.ca/rpt/ptt/ptt.htm) or by calling 250 387-0604 in Victoria.