On February 16, 2016, British Columbia Finance Minister Michael
de Jong tabled the British Columbia budget for 2016. Included in
the budget were changes to property transfer tax, which is
generally paid whenever real property in the province is
transferred to another person, subject to certain exemptions.
Effective February 17, 2016, there will be a property transfer tax
exemption or refund on newly constructed homes up to $750,000 that
are purchased by Canadian citizens or permanent residents. Homes
eligible for the exemption or refund include the first purchase of
a new housing unit or a newly subdivided unit and the purchase of
land without a home, on which the owner builds a home and moves
into it within one year. In order to qualify for the exemption or
refund, the purchaser must live in the home as their principal
residence until one year after the purchase date and the value of
the finished property must be below $750,000. There will also be
partial exemptions available for properties with a fair market
value of up to $800,000.
In addition, the Minister introduced a 3 percent property transfer
tax on properties valued over $2 million, effective February 17,
2016. Transfers of these properties will continue to be taxed at 1
percent for the first $200,000 of the property value and 2 percent
on the property value between $200,000 and $2 million.
The Minister also announced proposed changes to the Property
Transfer Tax Act which will permit the province to collect
information on the citizenship of purchasers. If property is
purchased by a corporation, the corporation must disclose how many
directors it has, whether its directors are Canadian citizens or
permanent residents of Canada, and the name, address and
citizenship of all foreign directors. Purchasers who are bare
trustees will also have to provide information on the settlors and
beneficiaries of a trust, similar to that required for individual
and corporate purchasers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
