What Taxes Do British Columbians Pay To Own Real Estate?

Meet Andrew and Stacey Carter. Andrew and Stacey are young, high-income professionals living in Vancouver. Lately, their TikTok and Instagram feeds are inundating them with recommendations for real estate as the ultimate wealth-building tool, and they’re hooked.

The Carters decide they want to buy a house and a rental in Vancouver. Doesn’t everybody?

They have saved enough money to put a down payment on both properties and will own them as “joint tenants” – they each own the properties and have full rights to their use and enjoyment.

They don’t know a lot about taxes. In fact, they haven’t even considered the impact of taxes on their road to riches.

But they are about to learn the hard way that taxes and real estate go hand in hand.


Property Transfer Tax

It’s January 1st, 2022, and Andrew and Stacey find a lovely house in a neighbourhood they love. They put in an offer for $2,000,000, and the seller accepts. They’re thrilled! Until they learn that the buyer must pay provincial property transfer taxes when a property changes hands.

How much?

  • 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

On their $2,000,000 property, the land transfer tax is $38,000. That’s an extra 1.9% expense they need to account for. And since they can’t roll property taxes into their mortgage, they need to pay this upfront out of their cash savings.

In limited cases, first-time home buyers may be exempt or partially exempt from the tax, but only on qualifying home purchases under $525k. There is also an exemption when transferring property between related individuals or on the breakdown of a marriage or common-law relationship.


The First-Time Home Buyer’s Tax Credit

The Carters see a TikTok video that says first-time homebuyers can get a tax credit on their first home purchase.

The good news is that they qualify as first-time home buyers because they did not live in a home they owned in the year of the purchase or any of the four preceding years.

They can claim $10,000 of the purchase and receive a federal non-refundable tax credit for 15% of this – a total of $1,500, which they get when they file their taxes the following year.



Because they are diligent savers, the Carters have the cash needed for the property transfer taxes. They complete their purchase, move in, and then focus on buying the rental.

They buy a brand new two-bedroom condo in Downtown Vancouver for $1,000,000 and pay the $18,000 in property transfer tax. But the final purchase price comes out $50,000 higher than expected. Why? Because on newly built homes, buyers must pay GST. They talk to their mortgage broker and find out they can roll the GST into their mortgage if they want to. They’ll pay more interest this way, but since they hadn’t anticipated the big property transfer tax bill, they do it.

There are two other cases where GST applies but not to the Carters:

  • Farmland, with certain exceptions
  • Commercial properties


The Newly Built Home Exemption

They see an Instagram Reel that says on newly built homes, they may qualify for a partial or complete exemption from the property transfer tax on their condo.


Except to qualify, the home’s value must be $800,000 or less and the condo  must be their principal residence. In their case, there is no relief, and they must pay the total amount.

If their new home (not the rental) had been less than $750,000, and it was a new build, the entire property transfer tax bill would have been waived. If it were between $750,000 and $800,000, they would be exempt from a portion of the taxes.


Income Tax

Since the rental mortgage payment, strata fees, utilities, property taxes, and insurance cost them $2,000 per month, they are thrilled when a tenant offers to pay them $3,000 monthly for a one-year lease on the condo, leaving them with $1,000 per month in positive cash flow.

They are less thrilled the following April when they file their taxes and notice that they paid an extra $6,420 in income tax. That’s because the net rental income – that $1,000 monthly cash flow from the rent – is fully taxed at their marginal rate of 53.50%. Ouch.

They would have still paid tax if they had decided to rent out one of the bedrooms in their home instead of buying a rental. In that case, they could deduct a proportional amount of their expenses – meaning if the bedroom was 20% of the square footage of their home, they could deduct only 20% of their home’s expenses against the rental income.

What if they decided to rent a bedroom on a short-term basis instead?

In most cases, the same calculation would apply. So, if they rented it for one month of the year, they could deduct:

20% of the house rented * 1/12th of the year = 1.67% of their expenses.


Annual Taxes


Property Tax

Each municipality in Canada sets its own property tax rates based on each $1,000 of the home’s value. The BC Assessment, mailed out each January based on the home’s value from the previous July, is used to calculate the tax owing. In some instances, a grant is available to reduce the tax bill, and property tax deferral programs are available – but interest is charged each year on the amount outstanding. Anyone 55 years or older, a surviving spouse, an eligible person with a disability, or who financially supports a dependent child may qualify.

There is also a Home Owner Grant of $570 in the Metro Vancouver and surrounding area for principal residences. The regular grant applies in full to homes valued under $1,975,000, and is phased out gradually on homes between $1,975,000 and $2,089,000.

Additional grants are also available in some cases, but the Carters don’t qualify.

The Carters’ annual property tax bill for the primary residence is $5,389. Since the value of their home is over $1,975,000, they qualify for a reduced grant of $470, bringing their total property tax bill to $4,919. For their condo, the tax is $2,693. Since the Home Owner Grant only applies to a principal residence, their rental doesn’t qualify.


BC Speculation & Vacancy Tax

The Carters realize that they just aren’t cut out to be landlords. They are busy enough with their careers and don’t have time to manage the property and its needs. They will sell it eventually, but the market is slow right now, and they’re busy – so they put it off. The tenant leaves when their lease is up, and they decide to keep the condo and leave it empty for most of 2023.

In early 2024, they get a letter from the provincial government, asking them to declare whether their home and condo were occupied in 2023.

Since they did not live there and didn’t rent it out for at least six months of the year, they must pay the BC Speculation and Vacancy Tax.

The current rates are:

  • 2% of assessed value for foreign owners and satellite families
  • 0.5% of assessed value for Canadian citizens or permanent residents of Canada who are not members of a satellite family

Their condo is still valued at $1,000,000, and they are assessed $5,000 in tax.

The tax would not have applied if it had been rented for at least six months of the year. Several other exemptions are available, none of which apply to the Carters.


Empty Homes Tax

Next up, they get a letter from the city of Vancouver about an “empty homes tax.” They are dismayed to learn that this is separate from the BC Speculation and Vacancy Tax and ten times as punitive.

It applies to their condo since it was unoccupied for more than six months of the year.

From 2023 onwards, the tax is 5% of the property’s assessed value – $50,000 in Andrew and Stacey’s case.

Like the BC Speculation and Vacancy tax, there are exemptions in some cases – but not in the Carters’ case.


What Happens if They Sell?

Capital Gains Tax

Reeling from the additional vacancy taxes, the Carters decide to sell their condo. It’s Spring 2024, and the market has heated up – they believe they can sell it for $1,200,000, and sure enough, someone makes a cash offer. They sell, pay off the mortgage, and a sigh of relief washes over them.

Until tax time.

Their accountant tells them that the $200,000 increase in value is taxable as a capital gain since the property was not their primary residence and did not qualify for the principal residence exemption (more on that in a moment).

Thankfully, they only need to report half of the capital gain on their tax return. And since they owned it jointly, they each declared half of the gain. Not that this will save them any tax since they are both in the top marginal tax bracket in BC.

They declare $100,000 in taxable capital gains – $50,000 each for Andrew and Stacey – and each pay an extra $26,750 in taxes, or $53,500 in total.

But they still netted $1,146,500, an after-tax gain of $146,500!

Minus $5,386 for two years of property taxes.

And the $50,000 Empty Homes Tax.

And the $5,000 Speculation and Vacancy Tax.

And the $18,000 in property transfer tax.

And the $50,000 in GST.

Ignoring rental income (and loss of rental income for leaving the condo vacant for a year), their net after-tax take home is:

$1,200,000 – $53,500 – $5,386 – $50,000 – $5,000 – $18,000 – $50,000 = $ 1,018,114

All in, they made $ 18,114 after two years. Not bad, but it was a lot of work.


The Principal Residence Exemption

The year is 2031, and the Carters want to move to the suburbs. Their home has grown in value to $3,000,000, and they decide to sell.

Leery of the capital gains tax they paid on their rental, they ask their accountant if their home is also subject to tax.

Lucky for them, it’s not – that’s because of something called the Principal Residence Exemption (PRE).

For a given calendar year, you can apply the PRE to a home you, your spouse, or your children ordinarily inhabit. That means you can use it on your home, a vacation property, or even a property you rent to your children. But only one property per calendar year.

The calculation to determine your exemption accounts for years where you sell and buy a new principal residence in the same year:

# of Years Home is Declared Your Principal Residence+1# of Calendar Years Owned X Gain in Value=Exemption Amount

(Number of Years Home is Declared Your Principal Residence + 1)/Number of Calendar Years Owned * gain in value = Exemption Amount

Notice the “+1” in the equation.

The Carters bought their home in 2022 and sold it in 2031 to buy their dream home in beautiful Squamish, BC.

The Vancouver house was their principal residence for the entire period. Because of the +1 in the formula, they only need to declare the PRE from 2022 to 2030 – nine years – which leaves 2031 to be used on their new Squamish home eventually.

They calculate their PRE as follows:

9+110 X $1,000,000=$1,000,000

(9 + 1)/10 * $1,000,000 = $1,000,000

The entire $1,000,000 is exempt, and they retain the PRE for 2031. They report the capital gain on their tax return and claim the PRE, paying no tax on the gain.

Note that from 2022 onwards, you must have owned the home for at least 12 months to use the PRE. This dissuades people from buying a home, moving in, and flipping it while claiming the PRE.


Death and Taxes



Andrew and Stacey live a long and rewarding life, and eventually, Andrew passes away.

Stacey, as his executor, applies for probate on his assets.

Probate is the process of verifying your will. It helps to indemnify custodians or agents against giving out property to the wrong beneficiary. In the case of a bank account or investment portfolio, the bank or investment firm will require a grant of probate from the provincial government. The Land Titles Office needs this to transfer ownership of real estate assets.

Probate fees vary from province to province, but in BC, any estate over $25,000 attracts a 1.4% fee. Because they owned their home jointly, full ownership passes outside Andrew’s estate directly to Stacey. No probate is required.

When Stacey eventually passes away, assuming she was still the sole owner, probate would apply. If the home had appreciated to $5,000,000 many years later, the probate fee would be $70,000.

While not technically a tax, it is effectively one and is sometimes referred to as Estate Administration Tax.

The Carters are, of course, a fictitious couple. Their real estate journey was not wholly abnormal, though, and the multiple layers of tax must be considered at every stage.

Owning property can be an effective tool for building wealth. But before you jump head-first, make sure you know just how much it will cost.


Mark McGrath


This is provided for informational purposes and should not be construed as tax advice. Clients should consult their tax professional before implementing any strategies. Please note that while current at the time of publication, tax rates are subject to change.


The opinions contained herein are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Wellington-Altus Private Wealth. Assumptions, opinions and information constitute the author’s judgement as of the date this material and subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. All third party products and services referred to or advertised in this presentation are sold by the company or organization named. While these products or services may serve as valuable aids to the independent investor, WAPW does not specifically endorse any of these products or services. The third party products and services referred to, or advertised in this presentation, are available as a convenience to its customers only, and WAPW is not liable for any claims, losses or damages however arising out of any purchase or use of third party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus. Wellington-Altus Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. All trademarks are the property of their respective owners.


Administrative Assistant

Sharon worked for Sweeney Bride from 2014 to 2016 and recently rejoined the team as an Administrative Assistant in 2021. She has years of administrative experience in a variety of industries including working in legal and accounting firms. She enjoys being detailed, organized and efficient. When not hard at work, she enjoys exploring the great outdoors with her dogs, playing co-operative strategy board games and relaxing while sipping a nice Craft beer.

Carrie Freitag


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Carrie is the newest member of our team and is our Administrative Assistant. She has previous industry and administrative experience and her fascination with the finance industry is rapidly growing. Carrie moved to BC in 1994 from Ontario and never looked back. While not working she loves hanging out with her two kids, awesome cat Leo, and enjoys a competitive game of 21, and her gardens.

Katie Norton



Katie is a Business Administration graduate who joined the Sweeney Bride team in 2016. She takes care of on-boarding as well as managing account administration for our existing clients. She works hard to ensure the clients feel supported throughout the on-boarding process and is always available to answer questions.

A BC resident since 1997, Katie and her husband moved to Squamish to raise their two girls. They enjoy all of the outdoor activities and natural beauty that Squamish has to offer.

Hannah McVean


CFP®, CIM® | Investment Advisor

Hannah is a financial planner and investment advisor with Sweeney Bride Strategic Wealth Advisory.

Hannah’s personable approach to client meetings unmasks financial goals and anxieties clients didn’t know they had or felt.  Her specialty is then taking the stress out of complicated financial planning issues. She has an infectious passion for personal finance (even about insurance, believe it or not!) and providing solutions that leave clients feeling more at peace about their finances.

Hannah holds the CERTIFIED FINANCIAL PLANNER® designation and has been working with Sweeney Bride since 2017.

When not at the office, you can mostly find her outside – mountain biking, white water kayaking or skiing. When resting, she will be at home engrossed in a great sci-fi or fantasy novel (or, from time to time, re-playing the Elder Scrolls video games).

Liz Woodsworth


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Liz joined the Sweeney Bride team in 2015 as office manager. She is the gatekeeper in the office and is the face that greets you as you come through the door. If she can’t help you, she will ensure you speak with someone who can. Liz is a long-time Squamish local; when not in the office she spends her days soaking up all that this town has to offer while chasing her two active boys. Liz brings her valuable organizational skills and enthusiastic attitude to the team.

Janet Bride


CFP®, CIM® | Senior Wealth Advisor

Janet Bride is a Senior Wealth Advisor at Wellington-Altus Private Wealth and co-founder of the Sweeney Bride Strategic Wealth Advisory team.

With over 15 years’ experience in the Industry Janet holds the Chartered Investment Manager (CIM®), CERTIFIED FINANCIAL PLANNER®, and Elder Planning Counselor (EPC) designations and is also Insurance licensed.

Janet grew up in Ontario and moved out to beautiful British Columbia in 1995 with her husband, Paul, who is an adventure travel photographer. Her passion is to travel the world. Always interested in exploring different cultures and landscapes, she is grateful to have traveled to over 50 countries across 6 continents. She also enjoys continuous learning, spontaneous adventures with family and friends, and an active lifestyle in the Sea to Sky. Janet is proud to be a Big Brothers Big Sisters Alumni member since 2004.

She is highly motivated by helping people reach their financial dreams by creating comprehensive financial plans for individuals & families. While using a holistic approach to wealth management, she specializes in tax strategies and her goal is to encourage savings and help build our client’s wealth for a healthy and prosperous future.



CFP®, CIM® | Senior Wealth Advisor

Dave Sweeney is a Senior Wealth Advisor at Wellington-Altus Private Wealth and co-founder of the Sweeney Bride Strategic Wealth Advisory team.

With over 26 years’ experience in the Industry Dave holds the Chartered Investment Manager (CIM®), CERTIFIED FINANCIAL PLANNER®, and Elder Planning Counselor (EPC) designations and is also Insurance licensed.

Dave has lived in Squamish for most of his life. Married to his wife Donna, since 1987, they proudly have 3 lovely daughters, Amy, Danielle and Jamie. With his time in Squamish, it has allowed him an opportunity to become involved in many valuable groups.

Dave is a retired Captain of Squamish Fire Rescue after 35 years of service. Another passion was sports and he has been a coach for Squamish Youth Soccer Association where he dedicated 10 years to coaching girls Rep teams. Additionally, he is a former member and Treasurer of the Sea to Sky Community Services Board. Dave is a frequent contributor to Mountain FM’s Mountain Monitor, providing general advice and financial commentary.

Dave continues his volunteer work as Treasurer for both the Squamish Hospital Foundation and the Squamish Downtown Business Improvement Association. He is also a sitting Board member of the Squamish Community Foundation.

Professionally, Dave started his Financial Planning practice in 1994. After living through both his parents’ demise and witnessing what a lack of understanding they had, he realized what sound planning techniques could do to ensure that an untimely death did not destroy one’s lifetime work. For over 20 years, he has made it his passion to assist others in not facing the same plight.