BC Foreign Investors Tax

(from BC Government Website)

Effective August 2, 2016, an additional property transfer tax (PTT) applies to residential property transfers to foreign entities in the Greater Vancouver Regional District. Bill 28, Miscellaneous Statuses (Housing Priorities Initiative(s) Amendment Act 2016.

Current PTT is:

1% up to $200,000
2% up to $2,000,000
3% over $2,000,000

The Greater Vancouver Regional District 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. The additional tax does not apply to properties located on Tsawwassen First Nation lands.

The additional tax applies on all applicable transfers registered with the Land Title Office on or after August 2, 2016, regardless of when the contract of purchase and sale was entered into. It is retroactive to any pre-existing agreement of purchase and sale, if it could not be registered before August 2nd. There was so much activity on the Land Registry site that it crashed.

Foreign Entities are transferees that are foreign nationals, foreign corporations or taxable trustees. Foreign nationals are transferees who are not Canadian citizens or permanent residents, including stateless persons.

Foreign Entities are transferees that are 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 are trustees that are a foreign national or:

  • foreign corporation, or
  • a beneficiary of a trust that is a foreign national or foreign corporation.

The additional tax on property transfers to foreign entities is 15% of the fair market value of the foreign entity's proportionate share of a residential property located in whole or in part in the Greater Vancouver Regional District, excluding Tsawwassen First Nation lands. This tax applies in addition to the general property transfer tax. The additional tax does not apply to non-residential property. The value of the residential portion of a transfer is calculated in the same way as for the property transfer tax. The additional tax applies on the foreign entity's proportionate share of any applicable residential property transfer, even when the transaction may normally be exempt from property transfer tax. This includes transactions such as:

  • a transfer between related individuals
  • a transfer resulting from an amalgamation
  • a transfer to a surviving joint tenant
  • a transfer where the transferee is or becomes a trustee in relation to the property, even if the trust does not change.

The additional tax does not apply to trusts that are mutual fund trusts, real estate investment trusts or specified investment flow-through trusts.

For mixed-use property, the additional tax would apply on the residential component so that it applies to the second floor of a 2 storey building if it were apartments (this will need interpretation). Any development site that has residential on it will be subject to the tax as well as multi-family apartment buildings.

Finance Minister stated that "The data we started collecting earlier this summer is showing that foreign nationals invested more than $1 billion into B.C. property between June 10 and July 14, more than 86% of it in the Lower Mainland. While investment from outside Canada is only one factor driving price increases, it represents an additional source of pressure on a market struggling to build enough new homes to keep up. This additional tax on foreign purchases will help manage foreign demand while new homes are built to meet local needs."