(May 1, 2023)

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The Foreign Buyer Tax in British Columbia (Canada) is a tax that is levied on foreign nationals or foreign-controlled corporations who purchase residential property in the province. The tax was introduced in 2016 to help address concerns about the impact of foreign investment on the housing market in Vancouver and other parts of the province. The main conditions surrounding the tax are:

WHO IS SUBJECT TO THE TAX: Non-Canadian citizens, non-permanent residents, and, foreign corporations who are not incorporated in Canada are subject to the tax when they purchase residential property in certain areas of British Columbia (BC).
TAX RATE: the tax rate is 20% of the fair market value of the residential property being purchased. For example, if a foreign buyer purchases a home for $1M, they would be required to pay $200,000 in foreign buyer tax. This would be in addition to the regular property transfer tax that a new home buyer is already required to pay. Click Here to calculate how much your total property transfer tax will be (including the foreign buyer tax).
GEOGRAPHIC SCOPE: the tax applies to properties located in certain areas of British Columbia, including the Metro Vancouver Regional District, the Capital Region District, the Fraser Valley Regional District, the Central Okanagan Regional District, and the Nanaimo Regional District.
TYPE OF PROPERTY: the tax applies to residential properties, including single-family homes, condos, townhouses, and duplexes. The tax does not apply to commercial properties, industrial properties, or vacant land.
EXEMPTIONS: the tax may be exempt in certain circumstances, such as if you are a confirmed BC Provincial Nominee, or if you are acquiring a property on behalf of a Canadian-controlled limited partnership.

It is important to note that the conditions surrounding the Foreign Buyer Tax in British Columbia may change over time. To learn more about the Foreign Buyer Tax and if it applies to you, call or text Marko Gelo right now at 604-800-9593, or Click Here to schedule a free, no-obligation phone call with Marko.

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Contact Marko, he’s a Mortgage Broker!

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(Sept 12, 2023)

The Prohibition on the Purchase of Residential Property by Non-Canadians Act (also known as the Foreign Ban) came into effect on Jan 1, 2023. With the final release of policy details and regulations unfolding just days before the new year, many Temporary Residents found themselves scrambling over the holidays wondering how the new legislation affects them. Since then there have been some notable revisions. The most striking changes were exemptions pertaining to work and study permit holders:

Temporary residents working in Canada are exempt, if they:

hold a valid work permit or are authorized to work in Canada, and
have 183 days or more of validity remaining on their work permit or work authorization at time of purchase, and
have not previously purchased a residential property in Canada while the prohibition was in effect

Temporary residents studying in Canada are exempt, if they:

are enrolled in a program of authorized study at a designated learning institution as defined in the Immigration and Refugee Protection Regulations, and
have filed income tax returns for each of the 5 taxation years preceding the year in which the purchase was made, and
have been physically present in Canada for a minimum of 244 days in each of the 5 calendar years preceding the year in which the purchase was made, and
have not previously purchased a residential property in Canada while prohibition is in effect, and
purchase a property for a price not exceeding $500,000

Here are some other key points and notable exemptions of the Act:

the Act came into force on January 1, 2023 and will remain in effect for a period of 2 years,
the Act doesn’t apply to non-Canadians who entered into binding offers of purchase and sale before January 1, 2023 even if the sale is finalized during the prohibition period,
the Act also applies to corporations and entities formed under the laws of Canada or a province, not listed on a stock exchange in Canada and controlled by someone who is a non-Canadian,
the Act doesn’t apply to non-Canadian spouses and common-law partners, if they purchase residential property in Canada with their spouse or common-law partner who is a: Canadian citizen, person registered under the Indian Act, permanent resident, or non-Canadian for whom prohibition does not apply
Situations where the Act doesn’t apply:
- when a non-Canadian acquires an interest in a residential property becuase of a divorce, separation, gift, or death
- when a non-Canadian rents a dwelling unit for the purpose of occupying the dwelling unit – in other words, a non-Canadian who is renting and occupying the dwelling unit does not constitute a purchase,
- when a non-Canadian purchases residential property for the purposes of development,
- when a creditor exercises a security interest or secured right, such as the seizure and foreclosure of a residential property

If you are a Permanent Resident you are NOT affected by Foreign Buyer Tax and the Foreign Ban.

Click Here for expanded details of the Act as interpreted by the Canada Housing and Mortgage Corporation (CMHC).

If you are a Temporary Resident and wondering if you are eligible for any of the above exemptions, call or text Marko Gelo directly at 604-800-9593 cell/text, or schedule a phone call in the future with Marko at your convenience.