Why do I have to pay property taxes on the home I’m buying?
Property taxes in BC are due the first business day after July 1. If you buy a home at another time, for example in September, unless the property seller has stated they are responsible for pay property taxes in the Contract of Purchase and Sale, then you must pay your share of the year to avoid a penalty.
Consider these examples:
Before July 1
If you buy your home before July 1 or before the taxes are fully paid, you’ll receive the sellers part of the property taxes. You’ll be responsible for paying the total amount of the property taxes.
Possession date: April 1
Taxes: $3,500 less $570 (Home Owner’s Grant) = $2,930
January 1 to April 1, 2015 is 90 days. $2,930.00 X 90 days = 26,370 ÷ 365 days in a year = $722.46
You’ll receive $722.46 from the seller towards total cost of the property taxes, which you will pay in full by July 1.
After July 1
If you buy your home after the seller has paid for the full tax year, you’ll have to reimburse them.
Possession date: September 1
Taxes: $3,500 less $570 (Home Owner’s Grant) = $2,930
September 1 to December 31, 2013 is 122 days. $2,930 X 122 days = 35,746 ÷ 365 days in a year = $979.34
You’ll need to reimburse the seller $979.34 on the Statement of Adjustments to compensate them for already paying the taxes for the full year.