When you purchase or gain an interest in property that is registered at the Land Title Office, you or your legal professional must file a property transfer tax return and pay the applicable property transfer tax, unless you qualify for an exemption. The property transfer tax is based on the fair market value of the property (land and improvements) at the time it was registered. The tax is calculated using a tiered rate: 1% on the first $200,000, 2% on the portion between $200,000 and $2,000,000, and 3% on amounts above $2,000,000. However, if you are a foreign national, foreign corporation, or taxable trustee, an additional property transfer tax applies on the residential portion of the property if it is located in a specified area of B.C. The first-time home buyers' program may reduce or eliminate the amount of property transfer tax you owe when purchasing your first home. To qualify for an exemption, you must be a Canadian citizen or permanent resident and meet one of the following criteria: have lived in B.C. for at least a year immediately before the registration date, or have filed at least two income tax returns as a B.C. resident in the last six taxation years before the registration. Additionally, you must have never owned a registered interest in a property that was your principal residence anywhere in the world and have never received a first-time home buyers' exemption or refund. The property itself must be used exclusively as your principal residence, have a fair market value of $835,000 or less (effective April 1, 2024), be 0.5 hectares (1.24 acres) or smaller, and contain only residential improvements. If one or more purchasers do not qualify, only the percentage of interest owned by the qualifying first-time home buyer(s) is eligible for the exemption. For example, if you acquired 60% interest in the property and another person acquired 40% interest, but only you meet the qualifications, only your 60% would be exempt. It’s also important to note that property transfer tax is distinct from annual property taxes, which are paid to your municipal or rural tax office to fund local services. The fair market value refers to the price a willing buyer would pay a willing seller for the property in the open market on the registration date. The government provides an online calculator to help estimate your property transfer tax, which should be factored into your closing costs.

Details provided by - https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers + https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax

So you got your BC Assessment in the mail last week and you don't like the number you see. Do you have any options as the homeowner, what can you do?  Well before filing a complaint or appeal regarding your property assessment, it's recommended that you first review your assessment and compare it with the sales data of similar properties using the Assessment Search tool. (Or contact CJ or Garry and we can help pull sales data for you.) This will help ensure that your assessment is accurate. If you still have concerns, You are encouraged to contact BC Assessment for clarification before formally submitting a Notice of Complaint (Appeal). The deadline for filing a complaint or appeal for the 2025 assessment is January 31, 2025.

Many concerns can often be addressed through direct discussions with the staff, outside of the formal complaint process. If, after contacting BC Assessment, you remain unsatisfied, you have the option to proceed with the formal appeal process for an independent review of your assessment. You can reach them by phone at 1-866-VALUEBC or use the Contact Us form for electronic assistance. If you prefer in-person service, you can schedule an appointment by contacting the same number. The first level of appeal is to the Property Assessment Review Panel (PARP), with a filing deadline of January 31, 2025. If you wish to pursue the matter further, the second level of appeal is to the Property Assessment Appeal Board (PAAB), which has a filing deadline of April 30. Please note that you must file with the PARP before escalating your appeal to the PAAB. For more information on the process and preparing for a hearing, please consult the Appeal Guide or visit the Ministry of Finance website.

Data courtesy of BC Assessments  - https://info.bcassessment.ca/Services-products/appeals

Showing Signs Of Recovery

The Canadian housing market is showing signs of recovery, with pent-up demand expected to drive more home sales in the coming months. However, TD economist Rishi Sondhi warns that this surge in activity won’t last indefinitely, projecting that the rush will likely subside by the first half of next year. While the initial wave of demand should push housing prices higher, Sondhi notes that large supply backlogs, particularly in Ontario and British Columbia, will continue to weigh on the market and take time to resolve. As demand outpaces supply, home prices are likely to rise in the short term.

New Mortgage Rule Changes And Interest Rates

Additionally, there are factors that could further support the housing market in the coming months. Falling interest rates and recent federal mortgage rule changes, which took effect on December 15, are expected to give a boost to both home sales and prices. Among the key changes are an increase in the maximum mortgage amortization period for first-time buyers from 25 years to 30 years, as well as a rise in the insured mortgage cap from $1 million to $1.5 million. These measures, coupled with the potential for continued economic growth, should help sustain the housing market’s momentum. According to TD’s forecast, home sales across Canada are expected to rise by 16 percent in 2025, while the average home price could increase by 8 percent.

For homebuyers, recent policy changes have improved affordability, particularly in light of the national banking regulator’s decision to eliminate the stress test for uninsured mortgages. As of September, the Office of the Superintendent of Financial Institutions no longer requires lenders to apply the minimum qualifying rate when borrowers switch their mortgages to a different institution, provided their loan amount and amortization schedule remain unchanged. Ratesdotca’s mortgage expert Victor Tran believes these changes will contribute to a hot spring market in 2025, as more buyers take advantage of the improved conditions.

In Vancouver, housing affordability is showing slight improvement, although challenges remain. The Royal Bank of Canada’s December 2024 report notes that rising household incomes have helped ease some of the affordability strain, and home prices in the region are stabilizing. However, despite these gains, affordability in Vancouver remains an issue, with 96.7 percent of the median household income required to cover homeownership costs in the third quarter of 2024. This is in stark contrast to other Canadian cities, such as Calgary (42.2 percent), Edmonton (33.6 percent), Ottawa (47.3 percent), and Montreal (49.4 percent). While the Bank of Canada is expected to cut interest rates further in 2025, which could lower homeownership costs, RBC’s Robert Hogue cautions that any significant price increases in Vancouver would be a setback, making it even harder for average households to afford a home.

Overall, while the Canadian housing market is poised for a stronger 2025, the recovery will be uneven, with regional disparities in affordability and supply challenges continuing to shape the landscape. The interplay of interest rates, federal policy changes, and local market dynamics will play a key role in determining how the market evolves in the months ahead.

Want to know how this impacts you as a buyer or seller? Give me a call or email today, and I’ll help you understand how this affects your personal real estate situation.

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Details provided by The Canadian Press & Business Intelligence for BC 

https://www.bnnbloomberg.ca/business/real-estate/2024/12/30/housing-market-poised-for-2025-comeback-as-lower-rates-unleash-pent-up-demand/

https://www.biv.com/news/real-estate/homeownership-costs-ease-a-little-in-vancouver-but-affordability-still-elusive-says-rbc-10025840#:~:text=RBC%20anticipates%20a%20two%2Dper,Hogue%20said%20in%20the%20report.

 The BC home flipping tax, effective January 1, 2025, targets profits made from selling residential properties within 730 days of ownership, including presale contracts. Imposed under the Residential Property (Short-Term Holding) Profit Tax Act, this tax applies whether the seller is a B.C. resident or lives elsewhere. The tax rate is 20% of the net taxable income from properties sold within the first 365 days of ownership, with the rate decreasing over the next 365 days. After 730 days of ownership, the tax no longer applies. For example, if you purchased a property on May 1, 2023, and sold it on January 31, 2025, the profit would be subject to the tax because you owned the property for 642 days. However, if you sold it on May 31, 2025, after 762 days of ownership, no tax would apply.

The tax applies to any property sold or transferred on or after January 1, 2025, if it was owned for less than 730 days, but it is distinct from federal property flipping rules and is not tied to B.C. or federal income tax. There are some exceptions, such as transfers between related persons (e.g., gifts), where the property may be exempt. For instance, if Michael buys a property from his father, who originally purchased it in 2020, Michael is deemed to have owned the property since 2020, thus exempting him from the tax, even if he sells it within the 730-day window. Similarly, the day you buy a property is generally the closing date, and if you purchase from a related person, the "purchase date" is based on when they first acquired it. The tax’s purpose is to deter short-term property flipping for profit, part of B.C.'s Homes for People Plan.

So what does this mean for you moving forward in 2025? Well you have no worries if you have held your property for over 2 years. If you have owned for less than 1 year most likely you will be subject to the tax, if you  have owned for a period between 12-24 months you will most likely be subject to a portion of the taxes. The government has initiated this program with hopes of fewer people (investors) buying places and flipping them for a profit, in a short period of time. In theory this should make things easier for new buyers to enter the real estate market in British Columbia however it could penalize people who need to sell for one reason or another after only owning the property for under 730 days. 

Details provided by BC government webpage- https://www2.gov.bc.ca/gov/content/taxes/income-taxes/bc-home-flipping-tax