The BC government is increasing the Property Transfer Tax by 15% tax for foreign nationals. The additional tax applies to 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.
The increased tax only applies to properties in the Greater Vancouver Regional District, and does not apply elsewhere in the Province, or the Tsawwassen First Nations Lands.
What will the property transfer tax mean for investing?
This new tax will likely lead to lower demand for Vancouver properties from foreigners who invest in expensive properties and leave it empty for most of the year, which should put downward pressure on the housing prices in Vancouver.
We recommend holding on to your money for now, and invest in an income property when the market goes down in Vancouver.
But don’t let the new tax sway you from exploring investment opportunities outside the Greater Vancouver Regional District (like the U-Three Project in Kelowna! Contact us for details.)
Other points to keep in mind:
- A foreign national is one who is not a Canadian citizen or permanent resident. If it is company that is purchasing, a foreign company is one that is not incorporated in Canada, or incorporated in Canada but controlled in whole or in part by a foreign national or other foreign corporation.
- The tax only applies to residential properties, not commercial.
- This is in addition to the regular PTT to be paid, and is paid on closing;
- The additional tax is payable even if there would normally be an exemption available. Transfers between related individuals, transmission to surviving joint tenant and other such items now attract the additional tax.
- 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.
We will do our best to keep you posted. We also advise that you check with your accountant or lawyer to discuss the implications of the tax change.