An eligible first-time home buyer in BC buys a resale home with a fair market value of $600,000. How much Property Transfer Tax do they pay?
Correct Answer
A) $2,000
Full tax on $600,000 is $2,000 (1% of $200,000) + $8,000 (2% of $400,000) = $10,000. The first-time buyers' exemption removes the tax on the first $500,000 ($8,000), so the buyer pays 2% of the $100,000 above $500,000, which is $2,000.
Why This Is the Correct Answer
$10,000 full tax minus the $8,000 exempt on the first $500,000 leaves $2,000.
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