ABOUT PROPERTY TRANSFER TAX (PTT)
Property Transfer Tax is a land registration tax; must be paid when an application for a taxable transaction is made at any Land Title Office in British Columbia to register changes to a certificate of title; and is payable on the fair market value of the property being transferred.
FAIR MARKET VALUE AND OPEN MARKET
Fair market value is the price that would be paid by a willing purchaser to a willing seller in the open market on the date of registration.
An open market is where the property is offered for sale so that anyone likely to be interested in purchasing is may make an offer.
In most open market transactions, the purchase price is the fair market value, as long as the transfer is registered within a few months after the sale contract is signed.
In instances such as no money changes hands or the transfer not taking place in the open market, the fair market value must be determined by means such as independent appraisal or reference to the most relevant BC Assessment value.
Generally BC Assessment property assessments reflect fair market value as at July 1st of the previous year.
This means that the assess value may not reflect the current market value of your property at the date of registration.
Because of this and the fact that property markets can change rapidly, you may need a more recent valuation, such as an independent appraisal, of what the property is worth at the time of registration.
INTERPRETATION ACT AND PROPERTY TRANSFER TAX ACT
Under the Interpretation Act, land means any interest in land, including any right, title or estate in it of any tenure, with buildings and houses, unless there are words to exclude buildings and houses or to restrict the meaning.
Because there is no limiting definition in the Property Transfer Tax Act, tax is payable on the fair market value of the land, plus all improvements on that land at the time of registration.