Newly Built Home Exemption
The Newly Built Home Exemption reduces or eliminates the amount of property transfer tax you pay when you purchase a newly built home.
A newly built home includes:
- a house constructed and affixed on a parcel of vacant land
- a new apartment in a newly built condominium building
- a manufactured home that is placed and affixed on a parcel of vacant land
- an already constructed house that is removed from one parcel of land and affixed to another parcel of vacant land, as long as the house hasn’t been occupied since it was placed on the new parcel of vacant land
- a house resulting from the division of an existing improvement affixed to a parcel of land that was also subdivided, as long as this house hasn’t been occupied since the subdivision of the parcel
- a house converted from an existing improvement on the land. The previous improvement couldn’t have been used as residential (e.g. a warehouse converted into apartments).
If you qualify for the exemption, you may be eligible for either a full or partial exemption from the tax.
If you paid property transfer tax when you purchased vacant land and you now have a newly built home on the land, you may be eligible for a refund of the property transfer tax you paid.
Do I Qualify?
To qualify, the property (land and improvement) transfer must be registered at the Land Title Office after February 16, 2016 and you must be:
- be located in B.C.
- only be used as your principal residence
- have a fair market value of $750,000 or less
- be 0.5 hectares (1.24 acres) or smaller
You may qualify for a partial exemption, if the property:
- has a fair market value greater than $750,000 and less than $800,000
- is larger than 0.5 hectare
- has another building on the property other than the principal residence
GDS and TDS: One of the ways lenders decide what you can afford is based on a couple of main metrics.
GDS: Gross Debt Service Ratio: is the percentage of your pre tax income needed to pay your housing costs. Lenders will look at the monthly mortgage payments, property taxes, condo fee's and heating costs. Add that all up and divide by your gross monthly pay. If your credit ( beacon ) score is good that ratio will less then 39%.
TDS: Total Debt Service Ratio: Lenders will need to know how much of your income will go to covering your debts, like credit cards, lines of credits car loans, secured and unsecured debt etc...If you credit score is good the ratio is maxed at 44%.
Rob Fuccenecco | www.CampbellRiverMortgages.com | 250.830.8232 | email@example.com