The short answer
Property transfer tax relates to a registered property transfer. Annual property tax is a recurring ownership cost. Paying one does not replace the other, and a purchase may also involve tax adjustments on completion.
BC: property transfer tax ratesProperty transfer tax
Usually calculated on fair market value at registration, subject to exemptions.
Property tax
Use the property’s actual notice and the relevant taxing authority.
Adjustments
Have your conveyancer explain any allocation of prepaid or unpaid amounts.
The basics
One tax when you buy, another every year
Property transfer tax is a provincial tax paid when a property transfer is registered at the Land Title Office. You or your lawyer or notary file a property transfer tax return at registration. Annual property tax is different: you pay it every year you own the home, to fund local services.
property transfer tax is based on fair market value on the date of registration. BC’s general rates are 1% on the first $200,000, 2% on the portion up to $2,000,000 and 3% above that. Residential property over $3,000,000 pays a further 2% on the part above $3,000,000.
Annual property tax depends on two things: your property assessment and the tax rates for your area. BC says rates reflect the funds needed to provide services for the year. That is why two homes at the same price can get different bills.
Why it matters
Mixing them up breaks your budget twice
property transfer tax is part of the cash you need around completion, along with your down payment and legal costs. Annual tax arrives after you move in and repeats every year. Each one belongs in a different column of your budget.
There is also the home owner grant. BC says it reduces the annual property tax on your principal residence, and you must apply every year. It has nothing to do with property transfer tax. A new owner can apply if the previous owner did not claim it on the property.
How it works
Budget both taxes correctly
Estimate property transfer tax on the expected value
Use our BC property transfer tax calculator. Then ask your lawyer or notary which value and exemptions apply.
Hold off on subtracting exemptions
Exemptions have value, residency and occupancy rules. Count one only once your lawyer or notary has confirmed it.
Get the latest annual tax notice
Ask for the seller’s current notice. It shows the actual bill, rather than a guess based on price.
Divide the annual bill by 12
Set aside a monthly amount so the bill is never a surprise. Review it each time a new notice arrives.
Apply for the home owner grant
If you qualify, apply every year. BC says only one grant can be claimed for a property each year.
Review completion adjustments
Your lawyer or notary splits prepaid or unpaid annual tax between you and the seller on the statement of adjustments.
Avoid these
Tax mix-ups to avoid
Believing a property transfer tax exemption covers annual tax
property transfer tax exemptions do not reduce the yearly bill. The home owner grant is the separate program for that.
Using the asking price as the property transfer tax value
property transfer tax is calculated on fair market value at registration. Ask your lawyer or notary what value the return will use.
Forgetting the extra 2% above $3 million
On residential property above $3,000,000, the further 2% applies only to the portion above that amount.
Missing the additional tax for foreign buyers
BC says foreign nationals, foreign corporations and taxable trustees must also pay additional property transfer tax on residential property in specified areas. Confirm your status early.
Example
A one-time tax next to a yearly tax
Illustration with an assumed $700,000 fair market value, no exemptions, and an assumed annual tax notice.
| property transfer tax on first $200,000 × 1% | $2,000 |
|---|---|
| property transfer tax on next $500,000 × 2% | $10,000 |
| Total property transfer tax, paid once at registration | $12,000 |
| Assumed annual property tax notice | $3,000 |
| Monthly set-aside: $3,000 ÷ 12 | $250 |
| Five years of annual tax if unchanged: $3,000 × 5 | $15,000 |
Real annual bills change with assessments and rates. Over several years they can add up to more than the one-time property transfer tax, so plan for both.
Questions to ask
Questions to settle both taxes
Your lawyer or notary
- What fair market value will the property transfer tax return use?
- Do I qualify for any property transfer tax exemption, and what must I do afterwards to keep it?
- How will annual property tax be adjusted on completion?
- Does the additional property transfer tax for foreign buyers apply to me?
The seller or listing agent
- Can I see the most recent annual property tax notice?
- Was the home owner grant claimed on this property this year?
- Are any charges billed separately from the tax notice?
FAQ
Common questions
Are property transfer tax and annual property tax one bill?
No. property transfer tax is paid once, when a transfer is registered at the Land Title Office. Annual property tax is paid every year you own the home and funds local services.
How much is property transfer tax in BC?
1% on the first $200,000 of fair market value, 2% from $200,000 to $2,000,000 and 3% above $2,000,000. Residential property over $3,000,000 pays a further 2% on the amount above $3,000,000.
Does the first-time buyer exemption lower my annual property tax?
No. It applies to property transfer tax only. The yearly bill can be reduced by the home owner grant if you qualify and apply. Our first-time buyer programs page explains the property transfer tax exemption.
Who pays property transfer tax, the buyer or the seller?
BC says the person who purchases or gains an interest in the registered property pays it, unless an exemption applies. In a purchase, that is the buyer.
Will two homes at the same price have the same annual tax?
Not necessarily. The bill depends on each property’s assessment and the local rates. Compare the actual notices.
