Additional Property Transfer Tax for Foreign Buyers in British Columbia

If you are a foreign national or a foreign-owned corporation planning to buy property in British Columbia, you may owe a second tax on top of the regular property transfer tax. It is easy to overlook because it is calculated separately and is not part of the usual tiered rates.

This article explains the rate, the regions it covers, who counts as a foreign buyer, and how the tax is paid. Because the rules turn on your status and the structure of the purchase, it is worth confirming your position with a lawyer before you sign.

This article covers the law of British Columbia.

How the additional tax fits with regular property transfer tax

The regular property transfer tax (PTT) is charged to every buyer at 1% on the first $200,000 of fair market value, 2% on the portion from $200,000 to $2,000,000, and 3% above $2,000,000. On residential property worth more than $3,000,000, a further 2% applies to the amount over $3,000,000.

The additional PTT is a separate tax. It is filed with the property transfer tax return, so you deal with both at the same time. Paying one does not replace the other.

The rate and where it applies

The ministry states that the additional PTT is 20% of the fair market value of the buyer's proportionate share, charged on the residential portion only. The Property Transfer Tax Act, section 2.02(4), refers to 15% unless a different rate is prescribed, so the rate that applies to your registration date is something a lawyer should confirm.

The tax applies to property in these regional districts:

• Capital Regional District
• Fraser Valley Regional District
• Metro Vancouver Regional District
• Regional District of Central Okanagan
• Regional District of Nanaimo

Fair market value is the price a willing buyer would pay a willing seller on the open market on the registration date, and for an open-market sale registered within a few months of the contract the purchase price is generally a good indicator. If the sale was not an open-market sale, an independent appraisal or the BC Assessment value may be used instead.

Who counts as a foreign buyer

The Act defines the terms in section 2.01. A foreign national is an individual who is a foreign national under section 2(1) of the federal Immigration and Refugee Protection Act. A foreign corporation is one not incorporated in Canada, or a Canadian corporation controlled by foreign entities, unless its shares are listed on a Canadian stock exchange.

Trusts can also be caught. Taxable trustees include trustees of a trust with a foreign-entity trustee or a foreign-entity beneficiary. Where several people buy together, the tax is based on each foreign buyer's proportionate share rather than the whole price.

Exceptions to know about

How and when it is paid

The buyer pays PTT when applying to register the transfer at the land title office, and must file a return whether or not the transaction is exempt. The buyer or their legal professional files the return and pays at the Land Title Office when the transfer is registered, and legal professionals usually handle this. The office may refuse registration if the tax is not paid on the registration date.

Accuracy matters. If tax is avoided through missing, incorrect or misleading information, you pay the corrected tax plus a penalty equal to the amount correctly paid, and returns can be audited within six years of registration.

What to do next

• Confirm whether the property is in one of the listed regional districts.
• Work out each buyer's immigration status or the corporation's ownership and control.
• Ask a lawyer which rate applies on your expected registration date.
• Check whether an exemption, such as the Provincial Nominee exemption, fits your situation.
• Budget for the additional tax alongside the regular PTT before you commit to a price.

Frequently asked questions