Further to our article on the same topic posted on December 6, 2017, effective February 21, 2018 the additional property transfer tax rate is increased to 20 percent from 15 percent. In addition, the tax is expanded to the following areas:
For these newly added areas, there are transitional rules that may exempt certain transactions entered into before February 21, 2018. For instance, if the change of title occurs on or before May 18, 2018 and the property transfer is subject to a written agreement dated on or before February 20, 2018, this tax is not payable. However, if the written agreement is assigned to a foreign entity on or after February 21, 2018, the tax is payable.
There are no transitional rules for transactions for the Greater Vancouver Regional District.
Same as before, the tax only applies to residential properties and residential portion of properties, such as residential portion of farm land (eg. farmer’s home).
Also effective February 21, 2018, the rate for the regular Property Transfer Tax which applies to all real estate transactions (except exempted transactions) has increased for residential properties above $3 million. The tax is now as follows:
- 1% on the first $200,000,
- 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000,
- 3% on the portion of the fair market value greater than $2,000,000, and
- If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000.
Eg. if the property is classified entirely as residential and has a fair market value of $4,500,000, the tax is $143,000, calculated as follows:
- 1% on the first $200,000 = $2,000
- 2% on portion greater than $200,000 and up to and including $2,000,000 = $36,000 ($2,000,000 – $200,000 = $1,800,000 X 2% = $36,000)
- 3% on portion greater than $2,000,000 = $75,000 ($4,500,000 – $2,000,000 = $2,500,000 X 3% = $75,000)
- A further 2% on the portion greater than $3,000,000 = $30,000 ($4,500,000 – $3,000,000 = $1,500,000 X 2% = $30,000)
- $2,000 + $36,000 + $75,000 + $30,000 = $143,000
For more information, please visit gov.bc.ca/propertytransfertax. For enquiries on this topic, please contact one of the lawyers in our Real Estate Group.
In British Columbia, a general property transfer tax is payable on all property transactions involving a change to the property’s title, including:
- acquiring a registered interest in the property
- gaining an additional registered interest in the property
- becoming the registered holder of a lease, life estate, or right to purchase for the property
The amount of tax payable is based on the fair market value of the property on the date of registration except for pre-sold strata units. The tax is charged at a rate of:
- 1% on the first $200,000,
- 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000, and
- 3% on the portion of the fair market value greater than $2,000,000.
For example, if the fair market value of a property is $2,500,000, the tax paid is $53,000.
Effective August 2, 2016, an additional 15% property transfer tax was introduced in British Columbia on real estate transactions and is additional to the general property transfer tax. This tax applies to:
- Residential property transfers
- Properties located in the Greater Vancouver Regional District, which includes Anmore, Belcarra, Bowen Island, Burnaby, Coquitlam, Delta, Langley City and Township, Lion’s Bay, Maple Ridge, New Westminster, North Vancouver City and District, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, Surrey, Vancouver, West Vancouver, White Rock and Electoral Area A, which includes the following communities:
- Lands along Howe Sound, located between the District of West Vancouver and Squamish-Lillooet Regional District (excluding the Village of Lions Bay). This includes the communities of Ocean Point, Strachan Point and Montizambert Wynd.
- Bowyer and Passage Islands (in Howe Sound)
- Northern portion of Indian Arm
- Boulder Island and Carraholly Point (at the southern end of Indian Arm)
- West side of Pitt Lake
- Barnston Island (in the Fraser River, west of Golden Ears Bridge)
- University Endowment Lands (includes most of Pacific Spirit Regional Park)
- University of British Columbia (including University Neighbourhoods)
- Foreign buyers that are:
- foreign nationals who are not Canadian citizens or permanent residents
- foreign corporations not incorporated in Canada or incorporated in Canada but controlled in whole or in part by a foreign national or other foreign corporation, unless the shares of the corporation are listed on a Canadian stock exchange
- taxable trustees that are a foreign national or foreign corporation, or a beneficiary of a trust that is a foreign national or foreign corporation.
- Any applicable transfers including those which may normally be exempt from property transfer tax, such as
- transfer between related individuals
- transfer to a surviving joint tenant
- transfer to a trustee of the real property
This tax does not apply to:
- buyers who are Canadian citizens or permanent residents
- commercial properties or non-residential properties
- properties outside of the above mentioned area, such as the Tsawwassen First Nation lands, Whistler, Vancouver Island
For properties that have a residential component, such as farm land, this additional 15% property transfer tax will apply to the residential component. In other words, the tax will be paid on the portion of the purchase price prorated to the residential portion.
For more information, please visit gov.bc.ca/propertytransfertax. For enquiries on this topic, please contact one of the lawyers in our Real Estate Group.
