CANADA: British Colombia introduces 15% Property Transfer Tax on Foreign Home Buyers

Friday July 29 2016

British Colombia has approved Bill 28, Miscellaneous Statutes (Housing Priority Initiatives) Amendment Act, 2016.

This introduces an additional property transfer tax rate of 15% upon purchasers of residential real estate who are foreign nationals or foreign-controlled corporations. The additional tax will take effect Aug. 2, 2016, and will apply to foreign entities registering their purchase of residential property in Metro Vancouver, excluding the treaty lands of the Tsawwassen First Nation.

For mixed-use property, the additional tax would apply on the residential component of the foreign interest in a property. For example, the additional tax on the purchase of a home valued at $2 million will amount to $300,000.

The new law comes weeks after the province released preliminary data showing that foreigners invested some C$1 billion ($756.7 million) in British Columbia housing from June 10 to July 14, with about 86 percent of that in Vancouver.

The province`s property transfer tax rates currently range from 1 percent to 3 percent, depending on the value of the home. Foreign buyers will now pay an additional 15 percent, with the province set to hire extra auditors to help enforce the new tax.

The tax echoes measures taken by cities such as Hong Kong, Singapore and Melbourne, which have all introduced additional stamp duty on foreign buyers.

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