Many of my clients asked me how much property tax a home buyer needs to pay when buying a BC home. The property taxes are often the most significant expense a homeowner face after purchasing a home. I want to use this blog to share with home buyers regarding property tax issues.
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When you own a home in B.C., you must pay annual property tax for each property every year. If your property is in a municipality, e.g. the City of Vancouver, you pay your property tax directly to your municipal government. Please contact your municipal office to determine how much annual property tax you need to pay. On the other hand, If your property is in the BC rural area, you will need to pay the BC rural property tax.
Click here for more info about Vancouver property tax.
Homeowners in British Columbia pay the BC property tax.
The BC property tax is paid annually.
The money collected from the BC annual property taxes helps to pay for local services such as school, hospital, police, fire protection, and other essential services.
The BC government offers homeowners grant for the property tax. Click here for more info about the homeowner grant.
If you live in BC and your property is not in a city, town, district or village, you are considered in a rural area. When you live in a rural area in BC, you will receive your rural property tax notice every year in June from the BC province’s Surveyor of Taxes Office. After you receive the tax notice, you pay your property taxes directly to the BC province.
The BC government collects taxes for provincial services, for example, school and police, on behalf of other organizations to raise funds for essential services. Often the province of BC collects taxes on behalf of the organizations such as Islands Trust and University Endowment Lands.
Your BC rural property tax is determined by your property’s assessed value (BC Assessment) and the property tax rate (set by the BC government).
Homeowners who own real estate in BC rural areas pay the rural property tax.
Once a year.
The money collected from the BC annual property taxes helps to pay for local services such as school, hospital, police and fire protection, emergency rescue services, road construction and maintenance, and other essential services.
The BC government offers homeowner grant for the property tax. Click here for more info about the homeowner grant.
The BC School tax is one of the taxes on your annual property tax notice. School tax is not based on whether you or your family use the public or private school system. It is because the education system benefits all BC residents, including people without children in school.
The BC government sets the school tax each year. The school tax is different each year, depending on its total number of residences and the total residential assessed value.
If you own a high-value home, you may also have to pay an additional school tax. Most of the province’s high-value residential properties, including detached houses, condos, and townhouses, need to pay the extra BC school tax.
The additional school tax rate only applies to the home’s portion valued over 3 million dollars. This additional school rate does not apply to the first $3 million in value.
The additional tax rate is 0.2% on the residential portion assessed between $3 million and $4 million. For homes valued over $4 million, the extra school tax rate is 0.4%.
The BC School tax is charged on every home in B.C. unless the home qualifies for an exemption. If you own a high-value residential home, you may also have to pay the additional school tax rate.
Homeowners in BC pay the school tax annually.
The BC school tax helps the BC provincial government fund the BC school education system.
Certain property classes, e.g. Industrial property and farmland, are exempted or pay less school tax. For example, the provincial industrial property tax credit reduces the amount of school tax you pay by 60%. Furthermore, the provincial farmland tax credit reduces the amount of school tax you pay by 50%. Click here to learn more about BC School Tax Exemptions & Credits.
After you lived in your home for a while and wanted to sell your home, you may need to pay capital gains tax if the home you sell is not your primary residence. Also, you need to pay GST on the realtor commission. I will explore the capital gains tax in more detail in another blog.
If you have any questions, please contact me.
This blog is for information only. Please obtain independent legal and tax advice before buying or selling your home.
Sam Huang PREC
H & S Real Estate Group
Real Estate Coal Harbour
RE/MAX Select Properties
Address: 5487 West Boulevard, Vancouver BC V6M 3W5, Canada