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Amendments to the Additional Property Transfer Tax on Foreign Buyers

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:

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:

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.

Additional Property Transfer Tax on Foreign Buyers

In British Columbia, a general property transfer tax is payable on all property transactions involving a change to the property’s title, including:

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:

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:

This tax does not apply to:

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.