Selling Half a rental to a brother in BC Canada - Ask

My question is: Canadian-specific
QUESTION: I own a B.C. rental property which I am planning to sell half to my brother (we have agreed on a price). I would like to know how I determine a market value (for capital gains tax and 1% purchase tax).  Can I use the property tax assesment value or would I need to get an appraisal done?
david ingram replies:
Having just being involved personally with one of these, I can tell you that either is correct if the value is right.
We had a real estate appraisal from an extremely qualified realtor for one price which was lot value only.
The newer house across the street and another newer house four down the street had both been torn down and new houses built so lot value for this run down property did and still seems reasonable to me.
Between that appraisal which was the day the deal was made in an exchange of letters while values were being decided and the actual date of sale, properties in that area of North Vancouver went up 15%.
At the same time, the BC ASSESSMENT had significant value for the building and was $100,000 more.
The actual sale was made for the realtor's value plus 15% lot value only.
The Sales Tax people came back and issued a bill for about $1,900, for the difference between the sale price and the BC assessment.
An appeal was launched and the bill was reduced by over $1,100.  The resulting $800 was less than the costs would have been to pursue the matter. It was also clear that if the house had been torn down at that point, the land value would have been okay and no bill would have been issued.
My warning is that the Sales Tax authorities will look at the sale and might assess a difference if the sale is not for the amount of the BC Assessment.  
David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road (Personal residence by appointment only please)
North Vancouver,  BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321 Fax (604) 980- 0325
davidingram at
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