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(October 25, 2021)

Intro (pre-amble): up to 8:20 mark of podcast (renting a two bed in Vancouver is like a $680,000 mortgage payment | New Zealand on the verge of crushing their NIMBY movement with aggressive property zoning rule | Babyboomers are not selling their homes)

One of the many challenges for a growing economy is having an adequate supply of skilled and qualified people to meet labour market needs. To address this ongoing challenge, British Columbia has created a program (in conjunction with the federal government) that strategically selects and nominates a limited number of prospective immigrants for permanent residence status in Canada – the program is known as the BC Provincial Nominee Program. In 2020, the number of nominees allocated for the province of British Columbia was 6,750 of which 6,251 were actually awarded (full allocation was not achieved due to the COVID pandemic impact). The program has maintained its pace into 2021 and is expected to carry on for years to come.

Advantage of becoming a BC Provincial nominee

The biggest advantage (by far) of being selected as a BC Provincial nominee is that you are exempt from paying the Foreign Buyer Tax on real estate.

Here are the eligibility criteria for a BC Provincial Nominee to qualify for the Foreign Tax exemption:

must be a confirmed B.C. Provincial Nominee when the property transfer is registered with the Land Title Office
the property must only be used as your principal residence (cannot be an income generating rental property)
the property must transfer/register to the individual (the BC Provincial Nominee)

Here are the regions in British Columbia where the Foreign Buyer Tax applies:

Quick Recap on Foreign Buyer Tax: a property transfer tax that is payable upon the completion date of your property purchase (in addition to the standard property transfer tax). The tax rate is 20% and it is applicable to everyone other than Canadian citizens, Permanent Residence holders, and confirmed BC Provincial Nominees. Click here to be directed to the BC Government website for complete details. Here is the complete outlay of how a property transfer tax (PTT) is calculated in British Columbia:

1% of the Purchase Price on the first $200,000;
2% of the Purchase Price that exceeds $200,000 but does not exceed $2,000,000
3% of the Purchase Price that exceeds $2,000,000
Since February 21, 2018 an additional 2% on the portion of the fair market value that is greater than $3,000,000 if the property is Class 1 property as determined by BC Assessment (thus the basic PTT on residential property over $3,000,000 is now 5%); plus
an additional PTT equal to 20% of the Purchase Price where the property is Class 1 and is located within the boundaries of Capital Regional District, Fraser Valley Regional District, Metro Vancouver Regional District, Regional District of Central Okanagan, and Regional District of Nanaimo)

Can BC Provincial Nominees qualify for a mortgage?

Yes! A BC Provincial Nominee is eligible to qualify for a mortgage in Canada. Here are the key mortgage qualification criteria to be aware of when qualifying for a mortgage as a BC Provincial Nominee:

you can purchase a property with as little as 5% down payment, but only for purchases under $1M
for purchases that are $1M or greater the down payment increases to 20% and potentially higher depending on how large your purchase price is (down payment can reach up to 35% for purchases that exceed $2.5M)
must have relocated to Canada within the past 2 to 5 years
must be employed for a minimum of 3 months
full income confirmation is required (recent pay stub and employment letter)
a 90 day history of your down payment funds are required (i.e. bank statements, investment statements, etc). If you are unable to provide a 90 day history, then prepare to explain where the funds were derived from along with applicable documentation to verify so (i.e. from sale of property, estate settlement, etc).

Have you recently moved to, or are planning to relocate to Canada? If so, Click Here to begin your mortgage pre-approval process or call Marko at 604-800-9593.