An additional 15% property transfer tax on foreign buyers of Metro Vancouver (excluding the Tsawassen First Nation Treaty lands) residential property will apply as of August 2nd under new legislation proposed by the BC provincial government.
The new Vancouver foreign buyer tax will apply to residential real estate transfers to foreign entities or taxable trustees. A foreign entity is any one of the following:
- individuals that are not Canadian citizens or permanent residents (“foreign nationals”)
- corporations (“foreign corporations”) that are:
- not incorporated in Canada, or
- incorporated in Canada but are controlled by:
- a foreign national,
- a corporation not incorporated in Canada, or
- corporations that are themselves controlled by foreign nationals or by corporations not incorporated in Canada.
A “taxable trustee” is a trustee that is a foreign entity or is the trustee of a trust that has one or more foreign entities as beneficiaries.
The 15% tax is additional to any property transfer tax that is payable under British Columbia’s existing regime. Currently all transfers of property in BC attract property transfer tax based as follows: (i) 1% on the first $200,000 of property value, (ii) 2% on any additional property value up to $2,000,000 and (iii) 3% on any additional property value in excess of $2,000,000.
The Vancouver foreign buyer tax will take effect beginning August 2nd and is applicable to all eligible transfers to foreign entities, including those for which contracts were signed prior to the legislation’s announcement.
Stay tuned for further updates and commentary from EKB on this topic. For more information visit the BC Ministry of Finance’s website to review the related Property Tax Information Sheet.
EKB’s Commercial Real Estate team is experienced and knowledgeable in this area and can assist you further.