Newly built home exemption frequently asked questions

Newly built home exemption

What sources can a transferee use to determine whether a house is “new” or not?

Information sources that can be used to determine whether the property qualifies as “new” under the Newly Built Home Exemption include, but are not limited to:

• The vendor: the information is included as part of the contract of purchase and sale
• LTSA: a title search shows that the application with the land title office is the first application for registration in respect of the qualifying property since the residential improvement was either built or placed on the parcel of land or since the subdivision of the parcel of land and the division of the improvement were effected
• Municipal records searches such as Building Permits
• BC New Homes Registry
• BC Assessment information
• The New Homes Warranty Insurance program

What happens if the transferee claims the newly built home exemption and they discover the house is not new?

If a transferee claims the newly built home exemption when they register a taxable transaction, but the property is not a qualifying property, the transferee becomes liable for the amount of property transfer tax that would have been payable at the date of registration, had the exemption not been claimed. The tax payable is due immediately in order to avoid additional interest accruing on the account.

Is there a penalty if a transferee claims the newly built home exemption but the property is not a qualifying property?

There is no penalty for claiming the exemption; however, once the transferee is aware their transfer does not qualify for the exemption or they are sent a Notice of Assessment, the tax is payable immediately.

How many times can a transferee apply for the new exemption?

As long as the exemption qualifications are met in full, a transferee can claim this exemption as many times as it is applicable.

When can a transferee apply for a refund for the newly built home exemption?

If the transferee qualified for the exemption at the time of registration of the taxable transaction but didn't apply when they registered the taxable transaction at the land title office, they may apply for a refund (PDF) after the first anniversary of the registration date and on or before 18 months from the registration date.

If the transferee doesn’t qualify because they are not a Canadian citizen or permanent resident, but they become one within 12 months of when the property is registered, they may apply for a refund (PDF) after the first anniversary of the registration date and on or before 18 months from the registration date.

If the transferee registered a vacant lot and paid the tax, they may apply for a refund of the tax paid if they meet all the Newly Built Home Exemption qualifications within the first year from the registration of the taxable transaction. They may apply for a refund (PDF) after the first anniversary of the registration date and on or before 18 months from the registration date.

Can a transferee apply for a refund of property transfer tax if they purchased and registered title prior to February 17, 2016?

The Newly Built Home Exemption is in effect for all the registrations of title on and after February 17, 2016. The exemption doesn’t apply retroactively.

Can a transferee apply for other exemptions, in addition to the newly built home exemption for the same transaction?

No.

Can a transferee apply for more than one refund (e.g. first time home buyers and the newly built home exemption) for the same transaction?

No.

Can a transferee cancel a first time home buyers (FTHB) application if they realize they qualify for the newly built home exemption?

A transferee can cancel an application for a FTHB and apply for a newly built home exemption if they meet all of the qualifications for the newly built home exemption. The cancellation and the application for a credit must be done no later than within 18 months from the date of registration.

A transferee who is not a FTHB but claims a FTHB exemption is liable for the penalty, even if they cancel the application and apply for a new housing credit under the newly built home exemption.

For more information, please call us.

Can a transferee cancel a newly built home exemption application if they realize they do not qualify but they qualify for a full or partial first time home buyers (FTHB) credit?

A transferee can cancel an application for a newly built home exemption and apply for a FTHB credit if they meet all of the qualifications for the FTHB program. The cancellation and the application for a credit must be done no later than within 18 months from the date of registration.

A transferee who isn’t a FTHB but claims a FTHB credit, is liable for a penalty, even if they only apply for a credit.