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.

Are you exempt from the Speculation and Vacancy Tax? 2026 changes and what you need to know….

Did you know that the Speculation and Vacancy Tax is changing in 2026? If you own a home in British Columbia, it’s important to stay up to date with any changes to the taxes you pay and avoid unwelcome surprises. Here are the upcoming changes in 2026, and how to find out if you qualify for an exemption.

Speculation and Vacancy Tax Overview

The Speculation and Vacancy Tax was introduced in 2018 as part of efforts to increase the availability of affordable housing and ensure fair contributions to the B.C. tax system. The amount of tax that you have to pay depends on whether you are a “specified” Canadian citizen or permanent resident—that is, whether your reported total income in Canada is greater than your unreported income.

Every year, declarations are due on March 31, and payment of the tax is due on July 2. You pay for the calendar year prior, so, for example, payment for the 2024 calendar year will be due on July 2, 2025. You also need to file a declaration every year, even if your situation hasn’t changed.

Importantly, the Speculation and Vacancy Tax is different from the Empty Homes Tax. The Empty Homes Tax is a Vancouver bylaw that only applies within the City of Vancouver, while the Speculation and Vacancy Tax applies across British Columbia. Similar pieces of legislation have been introduced across Canada, including the federal Underused Housing Tax, which generally applies to foreign national owners of housing in Canada. It is important for you to ensure you file a declaration for, and pay, all necessary taxes.

Upcoming Changes in 2026

 The amount you pay under the Speculation and Vacancy Tax is calculated using the following formula:

tax payable = tax rate × (owner’s interest × assessed value)

Effective January 1, 2026, the tax rate will change. For foreign owners, and untaxed worldwide earners (people whose unreported income in Canada is greater than their reported total income in Canada), the new tax rate will be 3% of the property’s assessed value. For specified Canadian citizens and permanent residents, the new tax rate will be 1%. This is an increase from the previous rates of 2% and 0.5%, respectively.

Exemptions From the Speculation and Vacancy Tax

 Understandably, you may be curious about how to get an exemption from this tax. Below are some of the more common possible exemptions for BC homeowners.

1) Year of Acquisition

If you buy a home and pay the appropriate taxes on the purchase (or if you qualified for an exemption from those taxes), you are exempt from the Speculation and Vacancy Tax on that home for the calendar year.

2) Tenanted Residential Property

If your home is rented out to a tenant for six months or more during the calendar year, you may also be exempt from the Speculation and Vacancy Tax.

There are specific requirements depending on whether your tenant is ‘arm’s length’ or not. An arms length tenant is someone who doesn’t have any unfair advantages in their dealings with you, because they are not your sibling, spouse, friend, or relative.

On the other hand, a non-arm’s length tenant is someone who does have an advantage because they are closer to you. If you rent out your home to a non-arm’s length tenant, in order to qualify for a tax exemption, that person would have to be a resident of British Columbia on December 31 of that calendar year.

In addition, if you are not a specified Canadian citizen or permanent resident, there is a further income requirement. If you are renting out a detached house, cottage, other single family dwelling, dwelling in a strata lot, or an apartment inside a duplex or any of the above, the income that your non-arm’s length tenant earns within British Columbia must be at least six times the annual fair market rent for a comparable residence. For any other residence, the tenant’s income within British Columbia must be at least three times this value.

3) Breakdown of Marriage or Common-Law Partnership

In some situations, you can be exempted from the tax if you and your spouse own family property but have since begun living separately. For example, if you and your spouse owned a house together, but your marriage broke down and you began living apart from your spouse for at least 90 days within the calendar year, and you did not reconcile with your spouse by December 31 of that year, you may be exempt from the tax.

4) Death

If someone else who owns a home with you dies, or if you acquire a home as part of the distribution of the estate of someone who has died, you are exempt from the tax for that calendar year.

Conclusion

 Buying, owning, and renting out residential property are rewarding endeavours, but there can be serious consequences if you do not comply with the appropriate legislation. An experienced real estate lawyer can assist with your purchase, sale, or lease, ensuring a less stressful and more efficient experience for you.

A husband will have to shell out more than $1.3 million to his ex-wife’s rich family as part of their bitter divorce proceedings and why the supreme court of Canada’s judgement.

The attached presentation was presented by lawyer and partner Joseph Cuenca and articled student Larissa Sleva to the Richmond Chamber of Commerce lunch and learn webinar.

Are you looking for a firm that appreciates a work life balance?

Cohen Buchan Edwards LLP  is accepting applications from experienced litigation lawyers of 3 plus years. First hand experience with Family Law and civil litigation an asset.

CBE is  located in Richmond, BC. established 40 years ago with many returning clients. CBE has an excellent support system of staff using modern software and technology to support our lawyers. Voted #1 law firm in Richmond, by the Richmond News readers.

What is CBE looking for:

• Member in good standing with the Law Society of British Columbia
• Call date prior to 2017
• Experience working in British Columbia at a law firm
• Ability to attend or participate in functions outside of regular business hours
• Strong written and verbal communication skills
• Approachable and likeable, both by clients and other team members
• Willing to work as part of a team, giving and taking direction
• Is willing and able to contribute to blogs and articles promoting their practice area
• Must have an excellent work ethic

What will CBE provide:

• Competitive compensation package
• Bright office
• Support team
• Networking opportunities
• Access to current software
• Work life balance

If you feel you can bring value to Cohen Buchan Edwards LLP and would like to be a part of this team, please send your resume along with a cover letter telling us why you would like to join CBE to hr@cbelaw.com .

Please note we will be unable to reply to all applicants. Only candidates on the short list will be contacted.

An executor takes care of your estate when you die, but who takes care of things if you are unable to make decisions for yourself while alive?

Signing a power of attorney gives someone you trust implicitly — like your spouse, sibling or child — signing authority over your financial and legal affairs. The person appointed, known as your attorney, can conduct banking on your behalf, buy and sell property, and even renew your mortgage.

It isn’t fun to think of situations where you might need someone to take control over your financial affairs — but it can help tremendously in a number of situations, from a debilitating accident, to a brain injury, to a diagnosis of dementia.

The most common form used by individuals is an enduring power of attorney, effective upon signing, which can be used whether or not you are incapacitated. Some people prefer to grant a springing power of attorney, which can only be used once you become incapable, although this requires proof of your incapacity, which may delay use of the power of attorney.

Both types of enduring power of attorney will allow your trusted appointee to protect your financial and legal interests when you can’t protect yourself. The alternative to an enduring power of attorney, getting a court-appointed guardian, can be both time consuming and expensive.

Granting someone power of attorney does not have to be a permanent decision. You can choose to revoke or change your power of attorney at any time.

Much like writing a will and appointing an executor, a power of attorney will ensure your interests are represented. Choosing your power of attorney is an important planning decision and requires careful thought and consideration. Talk to Cohen Buchan Edwards today and see how we can help you plan for the unexpected and protect your interests and assets.

When setting up a business, there are a variety of business structures that are available. So which is best for your needs? Below is a general overview of three basic business structures.

Sole-Proprietorship

In a Sole-Proprietorship a business has a single owner who is solely responsible for all the liabilities a company owes to third-parties (eg. financial institutions). This business structure is the simplest way of organizing your business as it only requires a business owner to

1. Obtain a tax number; and
2. Open a bank account.

From a legal and tax standpoint, there is no distinction between the business and the individual who owns the business. As a result, there is single ownership of the assets and liabilities of the business and there are low administrative costs and few formalities associated with operating the business. The lower level of complexity of a sole-proprietorship allows business owners to use simple accounting software to track their revenue and expenses. Further, if a business owner chooses to retain an accountant for their accounting requirements, then there are likely to be lower fees associated with the work. The legal structure of a sole-proprietorship is such that no public reporting is necessary, and the sole proprietor only needs basic financial knowledge to run the company and satisfy banks, vendors, CRA etc.

From a tax standpoint, the sole proprietorship’s earnings before tax (EBT) form the taxable income of the sole proprietor. The sole proprietor’s income is taxed at the personal tax rates of the individual, hence this type of business structure is limited when it comes to deducting expenses and sheltering its income.

Finally, as mentioned, the liabilities of the sole proprietorship are also considered to be the liabilities of the individual owning the business. As a result, the business owner is fully responsible for all of the company’s dealings. This can lead to a situation where, if the business were to be sued, then the business and personal assets of the sole proprietor can be seized to settle claims.

Corporation

A Corporation is a separate legal entity that can own assets, incur debt, sue, be sued, enter into contracts, and hold property in its own name. A Corporation is formed when one or more individuals incorporate a business.  It can be incorporated provincially or federally.

A Corporation is considered to have potential “immortality” in that it is an impersonal entity that can in theory exist forever. This means that despite certain changes in the Corporation’s composition (eg. An owner dying, shareholders changing etc.), the Corporation would not dissolve.

A defining feature of a Corporation is the limited liability associated with it. Under all Canadian statutes providing for the incorporation of companies, the members who form the corporation and become its shareholders are only required to contribute towards the debts of the Corporation the amount that they have agreed to pay for their shares in the Corporation. Limited liability is a substantial advantage in that if the Corporation is sued, the owners’ personal assets cannot be seized to settle the claims. Further, the ownership percentage of the owners of a Corporation is dependent on how many shares the shareholders hold.

A strong advantage for Corporations within our current taxation scheme is that they have few limits on the expenses they can deduct for taxation purposes. Corporations pay tax on earnings before tax at established rates. Net income that is distributed to owners is then taxed again at their personal rates. Further, some Corporations receive preferential income tax treatment and Corporations often provide more flexibility in deferring taxes and in allowing the division of business income.

However, incorporating and maintaining a corporation can be a relatively costly endeavour. For example, a corporation is required to file its own income taxes as well as abide by its annual filing requirements. The initial cost of incorporation and organization required to maintain related documents can also be a hurdle to consider. Further, in the multiple owner structure of a Corporation the shared decision making can increase accountability, but can also lead to slower decision making.

General Partnership

A General Partnership is a business established by two or more owners. General Partnerships are fairly simple and inexpensive to form as there are few formal legal requirements. All the General Partnership needs is a:

1. Registered tax number for applicable taxes; and
2. Bank account.

Typically the owners (the “Partners”) work out a partnership agreement that outlines their respective powers, ownership share and capital contribution, profit distribution, and operating procedures for the business. By default, all Partners are able to share in the management of the company, in the absence of a partnership agreement that states otherwise.

A General Partnership includes joint ownership with some formalities and moderate administration expenses. The Partners of the Company essentially pool their funds to raise capital. A disadvantage of a General Partnership is that decision making can become cumbersome, as important decisions require voting among partners. However, the partnership agreement may provide that smaller, less important decisions may be made individually as long as the other Partners are informed.

Revenues, expenses and cash flow management are typically tracked internally with additional support from outside accountants. There are no public reporting requirements for General Partnerships, but general financial information would be required to run the company and satisfy banks, vendors, CRA etc.

From a taxation perspective, each Partner is taxed individually on his or her share of the partnership income. Hence, there is no need for a tax return from the General Partnership itself. In terms of disadvantages, there are greater limits to what expenses can be deducted and the taxable income of the individual Partners is subject to their personal tax rates.

Legally, each Partner is liable for all assets and liabilities of the General Partnership. As a result, if the company is sued, then each Partner’s personal assets can be seized to settle the claims.

* Much of this general information can be found on the Business Development Bank of Canada website

https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/pages/sole-proprietorship.aspx

https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/pages/corporation.aspx

https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/pages/general-partnership.aspx

If you have questions about how to best structure your business, contact Cohen Buchan Edwards LLP at 604.273.6411 to speak to one of our lawyers.

Being the director of a corporation sounds like a cushy job, but not so fast. A director has a stringent set of rules to abide by.

The BC Business Corporations Act sets out all the duties that a director has. Particularly, a director must act honestly and in good faith with a view to the best interests of the corporation and exercise the care, diligence, and skill that a reasonably prudent individual would exercise in comparable circumstances.

Honesty

Directors must respect the trust and confidence they have been given in managing the assets of the corporation. Further, they must be truthful and open and are prohibited from realizing any secret profits or non-approved conflict of interest.

Good Faith and In the Best Interests of the Corporation

The duty of good faith can be generally referred to as the duty of loyalty or fiduciary duty. Whether a director has exercised this duty of good faith is determined on a case by case basis.

Diligence

The duty of diligence puts the onus on a director to make those inquiries that a person of ordinary care in that position or in managing his or her own affairs would make. Some examples of situations where these duties of directors come into play are as follows:

1. Attending meetings à A director does not have to attend all directors’ meetings but should try to do so, because they may be held liable for any prohibited matters that occur while they were absent.
2. Relying on other directors à Generally, directors are not responsible for the misdeeds or decisions of any of their co-directors if they have not participated in the acts resulting in the damage and is not negligent.
3. Relying on officers and professionals à Directors are allowed to rely on the expertise and knowledge of officers of the corporation or skilled professionals (eg. lawyers, accountants etc.) to assist them in making decisions, but should still be cautious of the information prior to accepting it.

Skill

Directors must respect the trust and confidence they have been given in managing the assets of the corporation and must exercise the care, diligence, and skill that a reasonably prudent individual would exercise in comparable circumstances. Further, they must avoid using their position for their personal benefit and must avoid any conflicts of interest with the corporation. Finally, directors must maintain the confidentiality of any information they obtain by virtue of their position and they must serve the corporation selflessly, honestly and loyally.

Duties Are Owed to Corporation

The long standing principle has been that directors owe a fiduciary duty only to the Corporation and not anyone else. However, recent case law has carved out exceptions where directors may be held liable to other groups such as shareholders, creditors, employees, the government and the public, among other groups.

Conflicts of Interest

As mentioned previously, directors are to avoid conflicts of interest wherever possible. However, courts consider what a reasonable person, in considering a particular situation, would think gives rise to a real sensible possibility of conflict, not what one could imagine could arise out of a situation. Essentially, the courts are not willing to look at every possible situation which could arise out of a situation as a potential conflict.

Further, directors have an obligation to disclose to shareholders any profits or gains realized from a contract or transaction with the corporation if it is material to the corporation. The Business Corporations Act has codified this requirement, by setting out a general test which requires assessing whether

1. A contract or transaction which creates a conflict is “material” to the corporation; and
2. The director has a “material interest” in the contract or transaction.

If answers to both parts of the test, are a “yes” then a director should disclose the interest to the shareholders of the corporation.

From a practical perspective, an assessment of whether a director is in a conflict of interest, whether they have addressed the conflict of interest, and whether they have made sufficient disclosure to interested parties is a fact based exercise. Directors would be prudent to remain as transparent as possible when dealing with any potential conflicts of interest.

For inquiries on this topic, please contact one of the lawyers from our Business Law Group at 604.273.6411.

An Enduring Power of Attorney is a document prepared in accordance with the Power of Attorney Act, that a capable adult (the “Adult”) (at least 19 years old) uses to appoint another person, called an Attorney, to make financial and legal decisions for them.  Essentially, an Enduring Power of Attorney remains in effect (or endures) if the adult becomes incapable of managing his or her affairs (Power of Attorney Act s. 30).  Those considering creating Enduring Power of Attorneys should be particularly cognizant of the age requirement for an Attorney being able to act for a capable Adult. Specifically, if an Enduring Power of Attorney names as Attorney an individual who is not an adult (at least 19 years of age), that individual may not act until becoming an adult (Power of Attorney Act s. 18).

In order to distinguish an Enduring Power of Attorney from a general Power of Attorney, s. 14 of the Power of Attorney Act states that an Adult who makes an Enduring Power of Attorney must state the following in the Enduring Power of Attorney:

• Whether the Attorney may exercise authority:
  • Only while the adult is capable; or
  • Only while the adult is incapable of making decisions about the adult’s financial affairs, and
• That the authority of the Attorney continues despite the Adult’s incapability

The key distinction between a general Power of Attorney and an Enduring Power of Attorney is that an Enduring Power of Attorney, unlike a general Power of Attorney does not cease to be in effect if the Adult becomes incapable of managing his or her affairs.  However, there are enumerated grounds through which the authority of an Attorney under an Enduring Power of Attorney is suspended or ends.  S. 29 of the Power of Attorney Act provides that the authority of an Attorney under an Enduring Power of Attorney is suspended or ends:

1.   if the Enduring Power of Attorney is terminated,
2.   if the provisions of the Enduring Power of Attorney that give authority to the attorney are revoked,
3.   if the Attorney resigns in accordance with section 25 of the Power of Attorney Act, or
4.   if the Attorney
   1.   is the Adult’s spouse and their marriage or marriage-like relationship ends,
   2.   becomes incapable or dies,
   3.   is bankrupt,
   4.   is a corporation and the corporation dissolves, winds up or ceases to carry on business, or
   5.   is convicted of a prescribed offence or an offence in which the Adult was the victim.

The Land Title and Survey Authority of British Columbia (the “Land Title Office”) often deals with Enduring Power of Attorneys, when an Attorney wishes to deal with the real property of the authorizing Adult.  However, the Land Title Office often finds issues with Enduring Power of Attorney documents and accompanying applications which cause them to reject registrations of Enduring Power of Attorneys to deal with the real property of the authorizing Adult.  In essence, if the Enduring Power of Attorney does not meet the requirements of the Land Title Office, it will be ineffective for purposes related to real property.  For example, defective Enduring Power of Attorneys cannot be used to sell, purchase, mortgage or otherwise deal with real property.

Some of the common mistakes the Land Title Office sees in Enduring Power of Attorneys are as follows*:

• The Attorney fails to sign the Enduring Power of Attorney.
  • an Attorney is required to sign the actual Enduring Power of Attorney. This requirement is not met if the Attorney only executes the supporting documentation, such as a “proof of age” declaration.
• Information related to an alternate or substitute Attorney on the application is missing. For example, the application often does not
  • list the triggering event that authorizes the alternate Attorney to act; or
  • include the proof of age of the alternate Attorney.
• Extra-jurisdictional certificates are not provided with an Enduring Power of Attorney that was prepared outside British Columbia. Further, often these extra-jurisdictional Enduring Power of Attorneys fail to reference the BC Power of Attorney Act and does not include the Officer Certification Statement required under Part 5 of the Land Title Act.

These mistakes will result in the Enduring Power of Attorney being rejected for registration at the Land Title Office, and thus useless for land purposes.

For inquiries on this topic, please contact one of the lawyers from our Real Estate Group at 604.273.6411.

*ltsa.ca/practice-information/common-errors-leading-defects

Accidents are never pleasant, but having a car accident outside of British Columbia can add a layer of complexity. Your ICBC policy is valid in other provinces and in the United States. However, your policy may provide a limited scope of that coverage. This is especially the case if you need to pursue an “at fault” driver when the accident happens away from home. It’s helpful to understanding ICBC’s role when the accident occurs outside of your home province.

ACCIDENTS IN BC

When an accident occurs in BC, ICBC is on one hand your insurer, which is contractually bound to offer coverage for certain treatment expenses and related income loss, as part of your policy. In this role, ICBC is also required to pay for damages that may be assessed against you, arising from mistakes that you make on the road.

At the same time, ICBC is also the insurer for the other party in the accident, and in that role ultimately responsible for paying damages to you in a “tort” claim, if the other party is found liable for damages that you suffer. Compensation is paid in to you by ICBC in its capacity as the other party’s insurer.

The distinction is often muddled, as the same ICBC adjuster will often concurrently deal with you on benefits under your policy (commonly termed “no fault” or “Part VII” benefits), as well as discuss compensation being offered to you, in ICBC’s other role as the other side’s insurer.

ACCIDENTS OUT-OF-PROVINCE

When an accident occurs in another province or abroad, ICBC’s role is confined to that of your insurer only. If you are involved in an accident while traveling, your claim would be governed by the laws of that jurisdiction.

An accident in Bellingham for example, will usually be bound by the laws of Washington state, and the defence of any action brought would be handled by the US insurer for the American driver. Any Court proceedings will also likely take place in Washington state. A myriad of issues can arise given the differences in laws and limitation periods dealing with claims in a foreign jurisdiction, and you should move quickly to ensure that someone is there to assist you in navigating through the complexities of a claim being brought out-of-province.

Further, laws in many US states often mandate a much lower minimum “third party coverage” threshold (the amount of coverage available to the other side’s insurer to satisfy your claim), which means that additional steps must be taken early on, to ensure your rights are fully protected.

Specific thought also must be given to the Underinsured Motorist Protection (“UMP”) provisions of your ICBC Basic Autoplan policy, which offers you protection in the event that that at-fault driver does not have sufficient coverage. While this is a contractual benefit, specific steps must be taken to secure the protection of this coverage in the event that there is a shortfall. A lawyer should be able to assist in making the determination whether you will likely need to turn to UMP. For added protection, ICBC also offers optional “Extension UMP” coverage, which can be purchased to offer further protection.

In cases which the accidents occurred elsewhere but involving only BC drivers (who would all be insured by ICBC), the parties can agree to have the matter dealt with in BC. In those instances, the parties can agree to attorn or agree to the jurisdiction of the BC courts so as to simplify the process, though foreign laws may still apply.

Bottom line:  before you drive outside of BC, it’s a good idea to contact your insurance broker to obtain the right coverage.  If you do get in an accident while away from home, consider hiring a lawyer to help you navigate the aftermath.

If you have any questions regarding ICBC related matters, please contact Monica Dosanjh at monicadosanjh@cbelaw.com or 604.273.6411.