BC Foreign Buyer Tax: When the Additional Property Transfer Tax Applies

British Columbia charges an extra property transfer tax on certain purchases by foreign buyers. It is separate from the federal rules about who may buy, and it can apply even when the purchase is fully allowed.

Whether it applies to you turns on who the buyer is, where the property is and how title is held. This article explains each of those points and the exemptions.

This article covers the law of British Columbia.

The rate and what it is charged on

The additional tax is 20% of the fair market value of the buyer's proportionate share of the residential portion of a property in a specified area. The statute sets 15% unless a different rate is prescribed, and the Property Transfer Tax Regulation prescribes 20%.

It is added to the regular property transfer tax, which is 1% of fair market value up to $200,000, 2% on the portion over $200,000 up to $2,000,000 and 3% on the portion over $2,000,000, plus a further 2% on residential value above $3,000,000. In other words, the regular tax is calculated in the usual way, and the additional tax is a separate charge for foreign nationals, foreign corporations and taxable trustees.

Which regions are covered

The specified areas are:

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

Property on Tsawwassen First Nation treaty lands is not subject to the tax. The regulation lists the specified areas. If your property is outside these areas, the additional tax does not apply, but the other rules in this series may. Which regional district a particular address sits in is worth checking before you make an offer.

Who counts as a foreign buyer

Whether each buyer counts as a foreign national depends on the definition in the federal Immigration and Refugee Protection Act. Because the tax is based on the buyer's proportionate share of the interest registered on title, only a foreign buyer's share is taxed when title is shared with a Canadian citizen or permanent resident.

Exemptions and special cases

• A confirmed BC Provincial Nominee registering the transfer as an individual and using the property as a principal residence is exempt. It can be claimed only once, and family members who are foreign nationals do not get it.
• A Canadian-controlled limited partnership can be exempt on transfers registered on or after June 1, 2020 if the specified partner and ownership conditions are met.
• Mutual fund trusts, real estate investment trusts and specified investment flow-through trusts are not subject to the additional tax.

Each exemption comes with conditions. Whether you meet them depends on your facts, so it is worth confirming with a lawyer or accountant before you complete.

Watch for traps. Some transfers that are exempt from ordinary property transfer tax, such as amalgamations and transfers to a surviving joint tenant, still attract the additional tax when a foreign entity or taxable trustee is the transferee. A registered owner is deemed the legal and beneficial owner for tax calculation even if they hold the land in trust.

Avoiding structuring mistakes and next steps

Some buyers consider holding property through a company, a trust or someone else's name. The anti-avoidance rule lets the administrator determine tax consequences in a way that is reasonable in the circumstances to deny a tax benefit. Whether a particular structure would be caught depends on the facts, so it is worth getting advice from a lawyer or accountant first.

The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act is a separate set of rules about who may buy, and it has its own exceptions. Meeting the BC tax rules does not answer whether a purchase is permitted, so check both.

• Confirm whether each buyer is a foreign national, foreign corporation or taxable trustee.
• Confirm the property's regional district.
• Decide how title will be held and each person's share.
• Ask whether an exemption applies and what you must prove to claim it.
• Ask a lawyer or accountant whether any refund or relief might be available in your situation, since that depends on the facts.
• Budget for the tax before you make an offer.

Frequently asked questions