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By Special to MoneySense on July 26, 2016
Estimated reading time: 1 minute

Details of B.C.’s proposed tax on foreign home buyers

By Special to MoneySense on July 26, 2016
Estimated reading time: 1 minute

All property transfers will be subject to audits

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VICTORIA – New legislation introduced by the British Columbia government intends to charge a 15 per cent additional tax on foreign entities buying residential property in Metro Vancouver. Here are some facts about the proposed law:

Fighting Avoidance:

All property transfer transactions will be subject to audits and all property transfer tax returns will be reviewed and verified.

The Canadian housing market puts us all at risk

The audit period is six years from the day a property is transferred.
Failure to pay may result in a fine of up to $100,000 for individuals and $200,000 for corporations, or up to two years in prison.

Defining foreign entities:

Classified as foreign nationals, foreign corporations or taxable trustees.
Foreign nationals are transferees who are not Canadian citizens or permanent residents.
Foreign corporations are not incorporated in Canada, but controlled by a foreign national or other foreign corporation.

Application of the tax:

Tax is in addition to the property transfer tax already in place of one per cent below $200,000, two per cent between $200,000 and $2 million, and three per cent on the remainder of a purchase.

Morneau expects answers to hot housing by end of summer

Does not apply to non-residential property.
Does not apply to Tsawwassen First Nation lands.
Applies to any foreign entities proportion of the share even if the transfer is between relatives, is a result of an amalgamation or if it’s moved to a surviving joint tenant.
Applies Aug. 2, regardless of when the contract of purchase and sale was entered into.

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