British Columbia has long been a desired place for individuals to live in and invest. This article explains whether non-Canadians can buy properties in British Columbia and the associated tax implications on the purchase.
PROHIBITION ON PURCHASE OF PROPERTY BY NON-CANADIANS
The Federal government has put a ban on non-Canadians on purchasing certain residential properties in Canada, including British Columbia. This ban was brought through the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) which came into force on January 1, 2023. Initially the ban was set for two years till January 1, 2025, but was further extended and is now set to last until January 1, 2027. This ban does not apply to commercial properties.
WHO ARE NON-CANADIANS?
Non-Canadian individuals are those who are neither Canadian citizens nor permanent residents of Canada. They also do not include individuals who are Indians registered under the Indian Act.
CAN NON-CANADIANS PURCHASE PROPERTY IN BRITISH COLUMBIA?
There are exemptions that allow specific categories of non-Canadians to purchase residential property in British Columbia, subject to certain conditions. These exemptions include:
- Temporary Residents Studying in Canada: International students on a study permit, if they fulfill specific criteria, such as enrollment in an authorized study program and meeting residency and tax filing requirements.
- Temporary Residents Working in Canada: Non-Canadians holding a valid work permit and having 183 days or more of validity remaining on their work permit or work authorization at time of purchase.
- Refugees and Refugee Claimants: Individuals who are refugees or have successfully claimed refugee protection in Canada.
- Accredited Members of Foreign Missions: Individuals with diplomatic, consular, or official passports issued by the Chief of Protocol for the Department of Foreign Affairs, Trade and Development.
- Non-Canadian Spouses and Common-law Partners: Non-Canadian spouses or common-law partners purchasing property jointly with a Canadian citizen, permanent resident, person registered under the Indian Act or a non-Canadian for whom the prohibition does not apply.
ADDITIONAL TAX IMPLICATIONS IN BRITISH COLUMBIA
A non-Canadian eligible to purchase real property in British Columbia is subject to paying additional property transfer tax. The additional property transfer tax rate for non-Canadians is set at 20% of the fair market value of their proportionate share.
FINAL THOUGHTS
Despite the prohibition on purchase of residential property for non-Canadians, they may still invest in British Columbia’s real estate market. To learn more about purchasing real property in British Columbia, please contact Cohen Buchan Edwards LLP.