Income Taxation Branch Bulletin 1-95 (Province of B.C.)

Province of British Columbia
Ministry of Finance and Corporate Relations

Parliament Buildings, Victoria, British Columbia, V8V 2L9

INCOME TAXATION BRANCH

Property Transfer Tax Act

INFORMATION BULLETIN 1-95

March 28, 1995

1995 Amendments to the Property Transfer Tax Act

This bulletin outlines changes to the Property Transfer Tax Act introduced by the Honourable Elizabeth Cull, Minister of Finance and Corporate Relations, under the Budget Measures Implementation Act, 1995 (Bill 2). The bill provides further tax relief in the following areas:

circumstances under which a First Time Home Buyers' exemption may be retained (section 3.251);
the transfer of a bankrupt's principal residence from a trustee in bankruptcy to the bankrupt's spouse or former spouse (section 5(2)(g.2)); and,
transfers to the Provincial Capital Commission of land used solely for park purposes (section 5(2)(j.2)).

Circumstances Under Which a First Time Home Buyers' Exemption May be Retained

Effective March 29, 1995, eligibility for exemption under the First Time Home Buyers' Program will no longer be denied in the following situations.

Where a First Time Home Buyer dies during the year immediately following purchase of the principal residence. The tax will not be assessed in these situations even though the one year residency requirement for exemption is not met.
In addition, where death occurs in the first year, the qualifying "eligible indebtedness" may be reduced by an amount equal to the amount of life insurance proceeds that are, under the terms of the contract of life insurance, payable and paid to reduce the eligible indebtedness.
Where a First Time Home Buyer separates or divorces during the year immediately following purchase of the principal residence, and transfers their interest in the property under section 5(2)(b) (exemption code 15). In these cases the First Time Home Buyer will not be assessed the tax even though the one year residency requirement is not met.

Transfer of a Bankrupt's Principal Residence

Effective March 29, 1995, a trustee in bankruptcy may transfer land which was the principal residence of the bankrupt immediately before the bankruptcy to the bankrupt's spouse or former spouse exempt from property transfer tax provided no consideration is paid for the transfer by or on behalf of the transferee. Use exemption code 12 when claiming this exemption.

Transfer of Land to The Provincial Capital Commission

Effective March 29, 1995, transfers of land to the Provincial Capital Commission are exempt from property transfer tax where the land transferred is used solely for park purposes. Use exemption code 44 when claiming this exemption.

Transitional Provisions

Persons who have, before March 29, 1995:

obtained an exemption or refund under the First Time Home Buyers' Program for which they ceased to qualify by reason of death, or separation or divorce, and paid the tax due; or,
paid tax with respect to the transfer of a bankrupt's principal residence from a trustee in bankruptcy to the bankrupt's spouse or former spouse,

may apply to the Administrator for a refund of the tax paid on or before March 31, 1996.

Where a request for a refund or an exemption is denied, a person has 90 days from the date of the letter advising that the refund request has been denied, or date of the Notice of Assessment, to file a Notice of Objection with the Minister appealing the decision.

Disclaimer

This bulletin is presented as an aid to understanding the statutory amendments proposed by the Minister, and is not intended to replace the need to consult the legislation for possible application to a particular fact pattern. Where there may be a conflict between this bulletin and the legislation, the legislation prevails.

For further information on these changes to the Act please contact:

Budget '95 (Province of B.C.)

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