CBM Associate, Janice Papp, discusses the details of property tax and whether a purchaser is required to pay it.   

The property transfer tax is payable by a purchaser whenever they purchase real estate and that real estate can be residential, commercial or industrial, the property tax or PTT for short is calculated based on a property's fair market value and in increments.   

So, for instance, on the first two hundred thousand dollars of a property's fair market value, one percent will be charged between two hundred thousand and two million. Two percent will be charged. And of course, between two million and three million, the government will collect three percent. If you have a residential property and it's three million or more. The government will add an additional two percent, taking that tax all the way up to five percent. If you notice, I mentioned that the tax is payable on the fair market value of the property. And the best way to describe that is what is a willing purchaser willing to pay for the property in an open market scenario.   

Generally speaking, the fair market value is in fact the purchase price that's paid by the purchaser. But that's not always the case. What's also interesting to note is that the PTT might be applicable when you simply add a person to their title, not your typical purchase scenario. And that's why it's critical to speak to a lawyer prior to making that decision to add someone to your property.   

We at CBM lawyers can provide you the information you require with respect to the PTT depending on your particular circumstances.  

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