Land Transfer Tax: Alberta vs British Columbia

Homeownership in Canada has undergone many changes in the last several decades. Land transfer taxes have ranged from 0% to as high as 6%.

The land transfer tax is a fee that you pay when you buy property in Canada. The amount of the tax depends on where you live and how much your property is worth. 

Alberta and British Columbia are both beautiful places to live, but they differ in one important way: their land transfer tax. If you’re considering a move from Alberta to BC, or vice versa, it’s important to understand the differences in how these two provinces handle land transfer taxes. In this article, we’ll take a look at the land transfer tax in both provinces and compare how they work. 

British Columbia 

The land transfer tax is based on the fair market value of the property (land and improvements) on the day it was registered with the Land Title Office, unless you qualify for an exemption or purchase a pre-sold strata unit. 

General land transfer tax 

The general land transfer tax applies for all taxable transactions. The general property transfer tax rate is: 

• 1% of the fair market value up to and including $200,000 
• 2% of the fair market value greater than $200,000 and up to and including $2,000,000 
• 3% of the fair market value greater than $2,000,000 

Further 2% on residential property over $3,000,000 

If the property has residential property worth over $3,000,000, a further 2% tax will be applied to the residential property value greater than $3,000,000. 

If the property is mixed class (such as residential and commercial), you pay the further 2% tax on only the residential portion of the property. 

If the property includes land classed as farm only because it is used for an owner’s or farmer’s dwelling, up to 0.5 hectares will be treated as residential property. 

Additional land transfer tax

If you’re a foreign national, foreign corporation or taxable trustee, you must also pay the additional property transfer tax on the fair market value of the residential portion of the property if the property is within a specified area of B.C. 

See additional property transfer tax for more information on how the tax applies, the tax rate and what are the specified areas of B.C. 

Land transfer tax rates in British Columbia¹ 

The British Columbia land transfer tax is a marginal tax, and each portion of your home’s value is taxed at its own unique tax rate. These land transfer tax rates are as follows: 

British Columbia land transfer tax example calculation 

Let’s assume you are purchasing a house worth $250,000:

● $200,000 first marginal tax bracket 

× 1.0% marginal tax rate 

= $2,000 land transfer tax 

● ( $250,000 property value – $200,000 lower marginal tax bracket ) 

× 2.0% marginal tax rate 

= $1,000 land transfer tax 

● $2,000 + $1,000 

= $3,000 total BC land transfer tax 

First time home buyer eligibility in British Columbia 

You qualify as a first time home buyer if: 

• You are a Canadian citizen or a permanent resident of Canada. 
• You have lived in BC for 12 consecutive months before the property is registered, or you have filed at least two income tax returns as a BC resident in the last six years. 
• You have never owned a home anywhere else in the world at any time. 
• You have never received a first time home buyers’ refund or exception. 

Your property qualifies for a full refund of land transfer tax if: 

• The market value of the property is not more than $475,000. 
• The land is 0.5 hectares or smaller. 
• The property will be used as your primary residence. 

You will only qualify for a partial refund of land transfer tax if:

• Your property is between $475,001 and $499,999 in value. 
• The land is greater than 0.5 hectares. 
• A portion of the land is used for commercial purposes or there are other homes on your land (only your primary residence is eligible). 

Alberta 

It’s a common misconception that Alberta has the same land transfer tax as other provinces. But, in fact, Alberta has a registration fee instead of a land transfer tax.

The property registration fee has two components: Property Value Component: $50, plus $1 for every $5,000 of purchase price (rounded up).

How can this be true? It’s simple: Alberta is the only province where you can buy a home without paying any land transfer tax. The only charge is the registration fee and that’s it!

This means that buying property in this province is much more affordable for everyone. In fact, many people who are on tight budgets have found themselves able to buy homes here because they don’t have to worry about paying hefty additional fees like they would in other parts of Canada!

Some provinces and territories do charge a land transfer tax and other provinces and territories do not charge a land transfer tax. Be sure to check the tax rules for the province in which you are buying a home to find out whether or not you will pay a land transfer tax. If you are planning to buy a property in Alberta, give us a call today so we can help answer all your questions!