This is a fairly large and sometimes unexpected cost for unsuspecting buyers. This tax is calculated by the Lawyer or Notary Public who is doing your conveyancing and is considered part of the closing costs.The Land Transfer Tax is a Provincial tax the government levies on all residential Real Estate transactions in B.C. The tax is 1% of the first $200,000.00 of the value of the Real Estate transaction and 2% of the remainder above $200,000.00. For example if you  purchased a home for $525,000.00 the Land Transfer Tax would be 1 % of the first $200,000.00 or $2000.00 and 2% of the remainder which is $325,000.00 or $6,500.00. The total tax being $8,500.00. As you can see this can come as a big shock to first times buyers who have budgeted to the limit and didn’t expect an extra $6,500.00 to be tacked onto their closing costs.

Fortunately there are exceptions to the tax but they are somewhat complicated and better suited for a phone conversation or a discussion over a Starbucks coffee. If you would like more information give me a call on my cell at 604 897 4798.

Thanks for reading

This entry was posted on Saturday, March 27th, 2010 at 12:31 am and is filed under Keith Macdonald's Blog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.