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*Updated* BC adds 15% property transfer tax to foreign buyers

(Originally published July 25, 2016)

Despite concerns expressed by many groups including our Board, the Real Estate Board of Greater Vancouver and BCREA, the BC Government passed legislation on Thursday, July 28 to add a 15 per cent Property Transfer Tax on foreign nationals buying real estate in Metro Vancouver. The government says the additional tax will take effect August 2 and will apply to foreign buyers registering the purchase of residential homes in Metro Vancouver, including presales but excluding treaty lands in the Tsawwassen First Nation.

Provincial Finance Minister Mike de Jong unveiled the tax as part of legislation aimed at addressing low vacancy rates and high real estate prices in southern B.C.

“For example, the additional tax on the purchase of a home selling for $2 million to a foreign national will amount to an additional $300,000,” de Jong told members of the legislature.

All BC residents currently pay a one per cent tax on the first $200,000 of their purchase, two per cent on the remaining value up to $2 million and three per cent on any portion above that.

“The amendments include anti-avoidance rules designed to capture transactions that are structured specifically to avoid the additional tax,” de Jong said.

The revenue from the additional tax would be used to fund housing, rental and support programs, the minister said. De Jong said recent government housing data indicate foreign nationals spent more than $1 billion on BC property between June 10 and July 14, with 86 per cent on purchases in the Lower Mainland area.

For more information, you can read the BC Government’s official announcement here.


Update on July 26: Here are some additional clarifications on the tax provided by BCREA on July 26:

  1. A foreign national is one who is not a Canadian citizen or permanent resident.  If it is company that is purchasing, a foreign company is one that is not incorporated in Canada, or incorporated in Canada but controlled in whole or in part by a foreign national or other foreign corporation;
  2. The increased tax only applies to properties in the Greater Vancouver Regional District, and does not apply elsewhere in the Province, or the Tsawwassen First Nations Lands (For FVREB, this includes North Delta, Surrey, White Rock and Langley, and NOT Abbotsford or Mission);
  1. The tax only applies to residential properties, not commercial;
  1. This is in addition to the regular PTT to be paid, and is paid on closing;
  1. The increased tax is effective ‪August 2, 2016, regardless of when the contract is signed.  Even if the contract was signed weeks ago, if it completes after August 2, 2016 there is a higher tax;
  2. The additional tax is payable even if there would normally be an exemption available.  Transfers between related individuals, transmission to surviving joint tenant and other such items now attract the additional tax.

If you have real estate transactions or clients that will be impacted by the new tax, we urge you to write to your local MLA to share your story.


Update on August 3: FVREB issues media release PLUS tips from Lawyer

  1. On August 2, the FVREB issued a media release that generated eight media requests. Our CEO, Rob Philipp conducted six interviews. Read the release here.
  2. BCREA forwarded us a link to share with you, from law firm Lawson Lundell. Their article digs into the details of the new tax and implications.