The BC Government released Budget 2018 on Tuesday, February 20 and it contains significant announcements related to housing, including several new taxes. In presenting the budget, Finance Minister Carole James referred to a “housing crisis” repeatedly, not only for individuals, but also for businesses looking to recruit workers to move to the province. She stated she hopes the taxes encourage more properties to be put into the rental market. Ultimately, the government’s stated goal is to discourage speculation.
Here’s a high-level summary of the housing-related initiatives from BCREA.
Property Transfer Tax (PTT)
- Third tier over $3 million – Effective February 21, 2018, the PTT rate is increased to 5% (from 3%) on the portion of a property’s fair market value above $3 million. Find a tax calculator for residential property over $3 million here. BCREA will be updating their tax calculator as well.
- Increase and expansion of the Foreign Buyers’ Tax – Effective February 21, 2018, the Foreign Buyers’ Tax is increased to 20% from 15%. The tax is also extended to include the Fraser Valley, Capital, Nanaimo and Central Okanagan Regional Districts. Click here for details on exemptions, how the areas are defined and more. The Minister noted the tax may expand to other jurisdictions if municipalities request it.
- The Province will require additional information about beneficial ownership on a new Property Transfer Tax Return form (Version 30) downloadable from the Land Title & Survey Authority of BC website or the myLTSA portal.
- Revenue – PTT revenue is expected to increase 2.6% annually over the three-year fiscal plan, based on the new measures introduced in the budget. It should be noted, though, that the provincial budget almost always forecasts less PTT revenue than it actually ends up collecting.
| Tax revenue | Updated Forecast 2017/18 | Estimate 2018/19 | Plan 2019/20 |
| Property Transfer Tax | 2,135,000 | 2,235,000 | 2,257,000 |
Do you have questions about the PTT?
- Visit the BC Government’s Property Transfer Tax page at gov.bc.ca/propertytransfertax
- Call 1-888-355-2700
- Email pttenq@gov.bc.ca
Additional taxes
“Speculation” Tax:
The government will introduce a “speculation” tax on residential property in BC. The new annual property tax will target homeowners who do not pay income tax in BC, including those who leave their homes vacant. Households with high worldwide income that pay little BC tax will also be captured.
- The tax will be effective for the 2018 tax year and up-front exemptions will be available for qualifying long-term rental properties and certain special cases.
- A non-refundable income tax credit will be introduced to offset the new tax to provide relief for those who do not qualify for an up-front exemption but who pay tax in BC.
- This new tax will initially apply to the Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts, and in the municipalities of Kelowna and West Kelowna.
- In 2018, the tax rate will be $5 per $1,000 of assessed value, increasing to $20 per $1,000 of assessed value in 2019.
- The tax will be administered by the province and will collect data including, social insurance numbers, household information and world-wide income information.
- Any information collected will also be shared with the Canada Revenue Agency.
- Click here for a Ministry of Finance Tax Information Sheet.
Provincial School Tax:
- Beginning in 2019, the province school tax is increased on most residential properties in excess of $3 million.
Online Accommodation PST and MRDT:
- Online accommodation platforms are enabled to collect and remit the Provincial Sales Tax and Municipal and Regional District Tax.
Property Tax Treatment for ALR land:
- The Province is planning to review property tax treatment of residential property in the ALR as part of a broader review to ensure ALR land is being used for farming.
Database on pre-sale condo assignments
- The Province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases. The information will be reported to a designated government office and shared with federal and provincial tax authorities to ensure taxes are paid.
Clarity of property ownership
- The Province plans to enable tax administrators to compel access to information relevant to property transfers such as information held in a MLS® database. This is concerning and BCREA is trying to get more information about what kind of information government would be able to compel.
- The Province is creating a beneficial land ownership registry of land in BC, administered by the LTSA. The information will be publicly available and be shared with federal and provincial tax and law enforcement authorities.
- Legislation will be introduced to require BC corporations to hold accurate and up-to-date information on beneficial owners in their own record offices available to law enforcement, tax and other authorities.
Task force on money laundering and tax evasion/avoidance
The Province will be working with the federal government to formalize a multi-agency working group on tax evasion, money-laundering and housing.
Home Owner Grant
The Province is reviewing the Homeowner Grant program to provide fairness for renters, who currently do not benefit from the Homeowner Grant.
Affordable housing
- The Province is investing $6 billion in affordable housing, delivering 114,000 homes over the next 10 years, including mixed-income, social, indigenous and supportive housing for women and children fleeing abusive relationships. This also includes 19,000 units of rental housing for the middle class and skilled workers. HousingHub, a new division of BC Housing, will oversee the delivery of these units.
Residential Tenancy Branch
- Increased funding to the Residential Tenancy Branch to reduce wait time, improve service and deal with disputes more quickly, as well as strengthening the Residential Tenancy Act and the penalties for those who repeatedly break the law.
BCREA’s response to the Budget
BCREA is calling on the provincial government to introduce transitional rules for all transactions impacted by the new tax measures included in Budget 2018. The new tax measures come into effect on February 21, 2018. The Property Transfer Tax (PTT) increase to 5 per cent for properties over $3 million, as well as the increase to 20 per cent and expansion of the Foreign Buyers’ tax to other parts of the province will have an immediate impact on transactions underway. Click here for BCREA’s news release.
More information: