Property Transfer Tax (PTT)

For example: A buyer budgets for PTT at closing. (Illustration only, not a real deal.)

Official source: Property transfer tax (Government of BC)

What I’d tell a friend

Budget for property transfer tax early and check the current rules on gov.bc.ca. Your lawyer will confirm the exact amount.

Why it matters to you

It's due when you register the transfer, and on a commercial purchase it can be a large cheque. Leave it out of your cash plan and you can come up short on closing day, so budget for it from the start.

How to use it in your deal

Buyers should include PTT in their budget from day one, using the BC government's calculator and current rates. Ask your lawyer whether the deal structure, such as a share purchase or a transfer to a related company, changes the tax, and whether any exemption applies. Sellers don't pay it, but it affects what buyers can offer.

Also ask about the additional tax that can apply to foreign buyers on residential portions. PTT is due when title is registered, so your lawyer usually pays it from your funds at completion. Commercial buyers don't get first-time buyer or newly built exemptions, which apply only to residential property. Some transfers between related parties or to certain trusts may be exempt, but rules are technical.

Budget for it from day one, since lenders won't lend against it. The province's PTT calculator and guides give the current rates.

Mistakes I see

Forgetting PTT in the cash needed to close. Assuming a share sale is always tax-free; BC has rules that can apply to some transactions. Not claiming an exemption you're entitled to.

In BC and Vancouver

The Property Transfer Tax Act sets the rules. The BC government publishes rates, exemptions and a calculator.

Official sources: Property transfer tax (Government of BC) · Property Transfer Tax Act (BC Laws)

What it is

Property transfer tax is a provincial tax usually paid by the buyer when a property is registered in their name. It is based on the property’s fair market value.

Rates, thresholds and exemptions change, and some apply only to homes. Check gov.bc.ca for the current rules rather than relying on an older figure.

Planning for it

Include it in your closing costs along with legal fees, any Goods and Services Tax (GST) and lender costs. On a commercial purchase it can be a large number.

Ask your lawyer and accountant how it applies to your specific purchase before you commit.

Who pays, and when a lease counts

In BC, property transfer tax (PTT) is a registration tax. The purchaser or transferee pays it when the interest is registered at the Land Title Office. Sellers do not pay it on a normal sale.

Leases can trigger PTT too. A lease of more than 30 years, counting renewals and options to lease, is generally taxable. Stacked leases or options registered within six months can be taxed together if their total term tops 30 years. Budget that before you sign a long ground or pad lease, and have the lawyer confirm.

Rates and exemptions change. Use the Ministry bulletins and your lawyer or notary for the filing.

Questions to ask before you sign

• What PTT will I pay?
• Does any exemption apply?
• Does the deal structure change it?
• Is any part residential?

Keep reading

Related terms: Completion date, Share sale

• Buying a commercial property in BC, step by step
• Commercial due diligence checklist for BC buyers
• Selling a business that owns or leases its real estate in BC

Working through this right now? Questions are free. Book a 15-minute call or call or text 604 256 2002, and I’ll give you a straight answer.

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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.