Eh? How would they determine fair market value? Who reviews sales and decides that a house has sold for less than market value?
Usually property transfer tax is based on the purchase price (market value), but there is a property transfer tax division in the tax compliance section and I assume they review outliers. They went after me a few years ago for a slightly different reason.
When I bought my first condo it was PTT exempt as I was a first time buyer. 18 months later I got a letter from them noting they had performed a review and the condo wasn't my primary residence (but it was) and I owned the PTT. It was a huge headache as 15 months into ownership I had rented it out and was no longer living there. Almost everything that was required by the property transfer tax division for me to prove that I had lived there for the first 12 months I didn't have (magazine subscription, mail, etc.) I had forgotten to change over my driver's licence and care card (I think this is where they got me?). BC Hydro Bills, the one thing I did have, was not acceptable proof reason being landlords sometimes include Hydro in rent. All my mail and packages, if any, I kept sending to my parents house as it was easier to get stuff delivered there. Finally got out of it by getting an owner in the building to verify that I had rented his parking spot for 15 months backed up by the cheques coming out of my account every month.
Edited by MarkoJ, 12 January 2014 - 09:34 PM.