New BC tax to address foreign ownership

In response to pressure to address foreign ownership in the Vancouver region, and in response to growing concerns of an overheated housing market, the BC government announced it will introduce an additional 15% property transfer tax for foreign buyers of residential property, effective August 2, 2016.

As an example, the additional tax on the purchase of a home valued at $2 million will amount to $300,000.

The new tax will apply to the sale of all residential properties within Metro Vancouver, excluding Treaty lands in the Tsawwassen First Nation. The tax will apply to buyers who are not Canadian citizens or permanent residents, as well as corporations that are not registered in Canada or are controlled by foreigners.

A trustee will be subject to the additional tax if the trustee is a foreign entity, or if at least one beneficiary of the trust is a foreign entity. For mixed-use property, the additional tax would apply on the residential component of the foreign interest in a property.

This new tax will be charged in addition to the property transfer tax that is already charged on residential and commercial transactions.

Please note, if you have purchased a new home with a closing date on or after August 2, then you may be impacted by the new legislation. If you are concerned that this may apply to you or you have further questions about it, please contact me directly.