The province announced today it will increase the exemption levels for Property Transfer Tax (PTT) to $475,000 effective tomorrow!! (Feb 19, 2014).
The current exemption is up to $425,000 with partial exemptions on purchases between $425,000 - $450,000.
The new range will see a full exemption up to $475,000 and partial up to $500,000.
With prices at high levels, the first time buyer exemption has been missing the mark for many buyers who end up above the threshold anyway; especially in higher priced areas of Vancouver.
PTT is calculated as 1% on the 1st $200,000 of the home value & 2% on the balance and is charged on all residential purchases.
Currently a first time buyer purchasing a home at $475,000 would have to pay a $7,500 PTT!!
This cost is also not usually incorporated into a mortgage, so it came out from cash funds the buyers had to save along with their down payments.
This change will now see that same buyer fully exempt from this payment, saving them $7,500 in cold hard cash!!
We'd like to see much more changes to the Property Transfer Tax, but this is certainly a step in the right direction.