Posted on: 09th Apr, 2007 05:20 pm
Do I have to pay taxes on the difference of the loan amount and the fair market value?
Suppose you purchase a property for $200,000 and get a loan for $160,000, you want to know if you need to pay any tax on $40,000. No, you do not have to pay any tax.
Taxes are due if you were selling your property for a amount higher than its FMV, then capital gain taxes would be due and if property is sold for a value lesser than FMV, gift taxes would have been due. But while you purchase your property, you do not have to pay any tax.
cordova
Taxes are due if you were selling your property for a amount higher than its FMV, then capital gain taxes would be due and if property is sold for a value lesser than FMV, gift taxes would have been due. But while you purchase your property, you do not have to pay any tax.
cordova
Hi Brad,
Welcome to the forums.
I am not sure whether you are looking towards buying a home but it seems so from your post.
I would like to know where you reside actually. This is because in United States, there is no such concept of paying taxes on home purchase in the US. But in Canada and UK, home buyers do have to pay tax on purchasing properties.
In British Columbia, Canada, the government imposes a property purchase tax based on the greater of the fair market value of property or the purchase price. The tax is determined as 1% of the first $200,000 and 2% of the remaining part of fair market value or purchase price.
Wish to hear from you soon.
Thanks,
Sara
Welcome to the forums.
I am not sure whether you are looking towards buying a home but it seems so from your post.
I would like to know where you reside actually. This is because in United States, there is no such concept of paying taxes on home purchase in the US. But in Canada and UK, home buyers do have to pay tax on purchasing properties.
In British Columbia, Canada, the government imposes a property purchase tax based on the greater of the fair market value of property or the purchase price. The tax is determined as 1% of the first $200,000 and 2% of the remaining part of fair market value or purchase price.
Wish to hear from you soon.
Thanks,
Sara