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PROPERTY PURCHASE TAX & FIRST TIME HOME BUYERS
Property Purchase Tax ("PPT") is
payable on most transfers of real property pursuant to the Property Transfer Tax
Act. In the case of first time home buyers, however, this tax may not be payable
if certain conditions are met. Below
is a list of some of these conditions:
* The applicant must not
have previously owned an interest in a principal residence anywhere.
* Canadian Citizen or
permanent resident of Canada and resided in BC for at least one year
immediately prior to the purchase.
* The fair market value
of the land and completed improvements must not exceed $425,000.00 for the
Cowichan Valley area.
* All improvements must
be residential and land not to exceed 1.24 acres in area. Partial exemptions
may be available if land larger, or non residential structures on property.
* The purchaser must meet
various requirements in relation to occupying and using the property as their
principal residence.
* Partial
exemptions/refunds may be available in some cases.
* The purchaser must meet
several conditions in financing the purchase.
For example:
a) The amount borrowed to finance the purchase
(not including amounts borrowed from related individuals), must be 70% or
greater of the fair market value.
b) Generally, financing must have a term of at
least one year following the date of registration. In some cases, however,
shorter term financing may be renewed or extended to qualify for a refund of
paid PPT.
c) There are limits on paying out the financing
in the first year of ownership.
Please note that the above list is not comprehensive .
Your financial institution and/or lawyer should be able to provide complete
details.
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