The BC 2016/17 Budget, released on February 16, 2016,
implemented changes to the Property Transfer Tax Act and to
the Land Title Act in the form of
increased tax rates, citizenship disclosure requirements and a new
PTT exemption. The Budget did not change the current PTT
treatment of unregistered beneficial conveyances, but it did create
a new disclosure requirement for bare trusts, as well as any person
registering any charge on land (other than a mortgage or a money
Increase in PTT
Effective February 17, 2016, the PTT payable on registered
transfers with a fair market value in excess of $2 million will be
taxed at 3% for the portion in excess of $2 million, representing a
1% increase in the tax rate after the $2 million threshold is met.
PTT payable on amounts less than $2 million remains unchanged
(1% on the first $200,000, and 2% on amounts between $200,001 and
$2 million). This increased tax rate will now have to be
factored into a purchaser's closing costs.
Required Disclosure of Citizenship Information
Certain new disclosure requirements have also been introduced in
order to allow Government to track the citizenship of real estate
purchasers. The forms required to implement the new required
disclosures are not yet available, and are expected to be
introduced by regulation in Spring, 2016. Once the forms are
introduced, corporations submitting a PTT return will have to
disclose the citizenship of their directors, as well as the names
and addresses of any non-Canadian directors. Individual
purchasers will similarly have to disclose their citizenship.
If title is being registered in the name of a bare trustee,
the names, addresses and citizenship of the beneficial owner must
be disclosed. The citizenship disclosure will not only apply to fee
simple transfers, as any person registering any charge on land
(other than a mortgage or a money judgment) is required to
disclose, at the time of registration, whether they are a Canadian
citizen, a permanent resident, or a citizen of a foreign state.
New Housing Exemption
Government also created a new PTT exemption called the "New
Housing Exemption". Under this exemption, there is no
PTT payable by Canadian citizens and permanent residents purchasing
newly constructed homes with a purchase price of up to $750,000,
provided that they live in the home as a principal residence for at
least one year after the date of purchase. A partial, graduated
exemption for purchases between $750,001 and $800,000 is also now
available. As a result, we should expect to see developers
target this exemption with strategic new home pricing for
appropriate product. Note that a purchaser claiming under the New
Housing Exemption is required to include their SIN number on the
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Title requisitions, and responses to title requisitions, are often evidenced by two simple letters back and forth between solicitors; and yet, in the content of those two letters is the meat of the real estate transaction.
Now that the turmoil attendant upon the transference of power from one great party in the State to another has subsided, people may be permitted to devote their minds to a consideration of those sectional questions which are not less important for the welfare of the persons concerned, than are the great national issues upon which they have just pronounced judgment.
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