Foreign buyers of Metro Vancouver real estate will be taxed an additional 15 per cent, the government announced today in new legislation.
When you purchase or gain an interest in property that is registered at the Land Title Office, you’re responsible for paying property transfer tax. A Taxable transactions include:
- transfer of fee simple
- right to purchase or agreement for sale
- lease or lease modification agreements
- life estate
- Crown grant
- escheat, forfeiture or quit claim
- transfer as a result of corporate reorganization
Under the new tax regime, if you’re a foreign national or foreign corporation, you also pay the additional property transfer tax on residential property transfers within the Greater Vancouver Regional District. 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 also important to note, that the additional tax does not apply to non-residential property and that the value of the residential portion of a transfer is calculated in the same way as for the property transfer tax.
Finally, Anti-avoidance provisions exist and will be enforced to ensure all foreign entities report and pay the additional tax as required, including examining circumstances where Canadians hold property in trust for a foreign entity or are trustees where a beneficiary may be a foreign entity. Failure to pay the additional tax as required or purposely completing the general or additional property transfer tax return with incorrect or misleading information may result in a penalty of the unpaid tax plus interest and a fine of $200,000 for corporations or $100,000 for individuals and/or up to two years in prison. The penalties apply to anyone who participates in tax avoidance.