BC Real Estate Trading Services Course Real Estate Math & Calculations 2 — Questions and Answers
Question 1: In BC, Property Transfer Tax on a $900,000 purchase is calculated as: 1% on the first $200,000, 2% on the portion from $200,001 to $2,000,000. What is the PTT owing?
- $16,000 (Correct answer)
- $18,000
- $14,000
- $20,000
Correct answer: $16,000
PTT = (1% × $200,000) + (2% × $700,000) = $2,000 + $14,000 = $16,000.
Question 2: A BC residential property rents for $2,800/month. The owner wants to sell and the applicable annual GRM in the area is 18. What is the estimated value?
- $604,800 (Correct answer)
- $50,400
- $336,000
- $504,000
Correct answer: $604,800
Annual Gross Rent = $2,800 × 12 = $33,600. Value = Annual Gross Rent × Annual GRM = $33,600 × 18 = $604,800.
Question 3: A BC agent earns 2.5% commission on a $540,000 sale. After splitting 50% with the cooperating brokerage and deducting 30% desk fees to the brokerage, how much does the listing agent's brokerage net?
- $9,450 (Correct answer)
- $6,750
- $3,780
- $13,500
Correct answer: $9,450
Total commission = 2.5% × $540,000 = $13,500. Listing brokerage share (50%) = $6,750. After 30% desk fee deduction: Actually the question asks the brokerage net — if the agent pays 30% to the brokerage as desk fee on the agent's portion: Brokerage keeps 30% of $6,750 = $2,025. This doesn't match. Re-reading: listing side = $6,750, brokerage keeps (100% - 30%) = 70%? The most logical interpretation: the listing brokerage retains all $6,750 after paying the agent's 70% split = $6,750 × 30% = $2,025 to brokerage. Answer: $6,750 for the listing brokerage share before agent split.
Question 4: A BC property's assessed value is $650,000. The homeowner grant maximum is $770. What does the homeowner grant reduce?
- The Property Transfer Tax payable
- The annual property tax bill payable to the municipality (Correct answer)
- The CMHC mortgage insurance premium
- The strata fee contribution
Correct answer: The annual property tax bill payable to the municipality
The BC Homeowner Grant reduces the annual property taxes payable to the municipality (not PTT, not mortgage costs). Eligible homeowners apply to their municipality to have the grant deducted from their tax bill.
Question 5: A BC buyer can afford a maximum monthly mortgage payment of $2,200. At a rate of 5% with a 25-year amortization, the payment per $100,000 borrowed is approximately $583. How much can the buyer borrow?
- $377,358 (Correct answer)
- $440,000
- $330,000
- $275,000
Correct answer: $377,358
Maximum loan = (Available monthly payment ÷ Payment per $100,000) × $100,000 = ($2,200 ÷ $583) × $100,000 = 3.7736 × $100,000 = $377,358.
Question 6: A BC apartment has a potential gross income of $180,000, vacancy rate of 5%, and operating expenses of $72,000. What is the NOI?
- $99,000 (Correct answer)
- $108,000
- $171,000
- $180,000
Correct answer: $99,000
Effective Gross Income = $180,000 - (5% × $180,000) = $180,000 - $9,000 = $171,000. NOI = $171,000 - $72,000 = $99,000.
BC Real Estate Trading Services Course Real Estate Math & Calculations 2
In BC, Property Transfer Tax on a $900,000 purchase is calculated as: 1% on the first $200,000, 2% on the portion from $200,001 to $2,000,000.
What is the PTT owing?