by Macrealty Marketing Team | Mar 9, 2018 | In The News
Vancouver’s luxury market, already experiencing a downturn since 2016, will likely take another hit with the introduction of higher tax rates for foreign and luxury home buyers, experts say.
The provincial government of British Columbia on Tuesday announced a basket of measures as part of its 2018 budget; among them was a hike, effective immediately, on property transfer taxes for foreign buyers and buyers of $3-million-plus homes (US$2.36 million and above).
Starting Wednesday, tax rates for foreign buyers were raised to 20% from 15%, while all C$3-million-plus home purchasers must now pay 5%, instead of the current 3% property transfer tax.
Not only will these taxes be applied to homes in Metro Vancouver, but they’ll also be levied in the Capital Regional District, the Fraser Valley, the Central Okanagan and the Nanaimo Regional District.
(more…)
by Macrealty Marketing Team | Mar 20, 2017 | In The News, Market Updates
EXEMPTION FROM THE 15% TAX
The original announcement that work permit holders would be exempt from the 15% additional property transfer tax was made on January 29, 2017.
On March 17, Premier Christy Clark finally introduced the details of the new exemption to the 15% property transfer tax applied to certain “foreign nationals” who purchase residential properties in the Greater Vancouver Regional District. As we expected the devil is in the details. There are a number of categories of work permit holders. Just as we expected, it turns out that not all holders of work permits will be treated equally. Most work permit holders will still have to pay the 15% tax.
The exemption from the tax will only apply to Provincial Nominees under the B.C. provincial nominee program (“PNP”). They have to be “nominated” by B.C. so that other holders of work permits such as international students, executive transferees, or individuals nominated by other provinces will not qualify for the exemption. Moreover:
- The exemption only applies to provincial nominees who treat the property as a principal residence;
- The exemption may be claimed only once. It the provincial nominee buys another GVRD property he must pay the 15% tax;
- Evidence of provincial nominee status has to be provided at the time the documents are filed at the Land Title Office.
REFUNDS OF THE 15% TAX FOR CERTAIN INDIVIDUALS
The new rules also provide that the following buyers who have already paid the tax will be entitled to refunds:
- Foreign nationals who held B.C. PNP certificates or were confirmed as provincial nominees and purchased GVRD residential property between August 2, 2016, and March 17, 2017;
- Individuals who became permanent residents or Canadian citizens within one year of the date the property transfer was registered in the Land Title Office
Refunds for permanent residents and citizens can only be claimed:
- in respect of only one property;
- where the property has been used as a principal residence;
- where the owner moved into the residence within 92 days of property registration; and
- continued to live in the property for one full year after the date the property transfer was registered.
Clearly most work permit holders are still subject to the 15% tax. It seems that the exemptions are designed primarily to accommodate the PNP holders working in B.C.’s growing high technology industry, the fear being that the high cost of housing may be an impediment to economic growth in this critically important sector.
Meanwhile, work permit “status” issues can be somewhat complex. Foreign national buyers holding work permits and their realtor advisors who are uncertain about whether an exemption would apply should consider consulting their immigration and conveyancing lawyers before entering into a binding agreement to purchase GVRD residential property.
Written by Peter Scarrow, former immigration lawyer, currently is the Director of Asian Business at Macdonald Real Estate Group.
by Macrealty Marketing Team | Aug 8, 2016 | In The News
The new 15% property purchase tax (the “PTT”) explained.
WHAT IS THE NEW TAX?
It is a property transfer tax of 15% payable by “foreign” buyers IN ADDITION TO the regular property transfer tax at the time a property transfer for residential property is registered in the land title office for properties located in “The Greater Vancouver Regional District” (the “GVRD”). This includes places like Surrey, Richmond, Delta, West Vancouver, Coquitlam, etc. but not Squamish, Whistler, Abbotsford, Vancouver Island, the Okanagan, etc.
So if a foreign buyer buys a $7 million residential property in West Vancouver the total property purchase tax would be:
WHO HAS TO PAY?
The tax has to be paid by “foreign entities”. That means foreign citizens, foreign companies and taxable trustees. Canadian citizens and Canadian permanent residents do not have to pay. Foreign corporations include companies set up outside Canada and Canadian companies that are controlled by foreign persons or by foreign companies.
WHAT SORT OF TRANSACTIONS ARE SUBJECT TO THIS TAX?
The tax is payable in respect of residential properties in the GVRD purchased by foreign buyers on or after August 2, 2016 at the time the transfer is registered in the land title office. It is payable even when the contract was finalized before August 2, 2016 and the parties unaware there would be a new tax.
ARE THERE ANY LOOPHOLES?
Not many. Non-residential property is not subject to the extra tax nor are properties outside the GVRD. Real estate investment trusts and mutual fund trusts are not subject to the extra tax. Penalties of $100,000 for individuals and $200,000 for corporations apply to anyone who participates in illegal tax avoidance. Presumably this includes lawyers, accountants and realtors who assist in illegal tax avoidance.
Written by Peter Scarrow, former immigration lawyer, currently is the Director of Asian Business at Macdonald Real Estate Group.
by Macrealty Marketing Team | Aug 3, 2016 | In The News
Jonathan Cooper, Vice President, Operations at Macdonald Real Estate Group joins Bloomberg TV Canada’s Rudyard Griffiths to discuss the impact of the 15 percent property tax for non-Canadian citizens and non-permanent residents in Metro Vancouver.
About Macdonald Real Estate Group
Based in Vancouver, Canada, Macdonald Real Estate Group (MREG) has an annual sales volume of over $7 billion and over $2 billion in assets under management. With more than 20 offices and nearly 1,000 staff and REALTORS®, MREG offers a full range of real estate services, including residential and commercial brokerage, property and strata management, project marketing, and the MREG Canadian Real Estate Investment Centre in Shanghai, China. Macdonald Realty is the residential division of Macdonald Real Estate Group. For more information, visit www.macrealty.com.
by Macrealty Marketing Team | Aug 3, 2016 | In The News
There are already signs the 15% property tax for non-Canadian citizens and non-permanent residents in Metro Vancouver is putting a chill on sales, and now there are calls to investigate how it was implemented.
