On February 16, 2016, the British Columbia government released
its 2016 budget (Budget). Contained in this budget were several
important changes to the Property Transfer Tax Act
INCREASE IN PROPERTY TRANSFER TAX RATE FOR PROPERTY IN EXCESS
OF C$2 MILLION
The Budget introduced a third property transfer rate of three
per cent on the portion of fair market value of a property over
C$2-million. The one per cent rate on the first C$200,000 of
property value and the two per cent rate on the value of property
between C$200,000 and C$2-million will continue to apply. These
taxes are payable at the time of registration of transfer of title
to the purchaser. The new tax rate will apply to transfers
registered on or after February 17, 2016.
EXEMPTION FOR NEWLY CONSTRUCTED HOMES UP TO C$750,000
The Budget also set out that newly built homes priced up to
C$750,000 will be fully exempted from property transfer tax when
bought by individual Canadian citizens or permanent residents as a
principal residence, occupancy is taken within 92 days of
registration of title and the purchaser lives in the residence for
a full year. Partial exemptions are available for new housing
valued greater than C$750,000 up to C$800,000. New housing includes
newly constructed units, newly subdivided units and new
manufactured homes placed on a parcel of land. Unlike prior
exemptions of the property transfer tax that were restricted to
first-time buyers, this exemption is available to all purchasers of
new homes. The exemption will be available for transfers
registered on or after February 17, 2016.
The purchase of land without a home, on which the new owner
builds or finishes a home and moves into it within one year, would
qualify for a refund of property transfer tax, rather than an
exemption at the time of registration.
A purchaser who buys a home and leaves it vacant is not
eligible, and the property will not be eligible for the exemption
on a subsequent sale.
A new form of property transfer tax return was released as of
February 16, 2016, for use to record the new taxes and exemptions
and is required to be submitted with the registration of the
transfer of title.
COLLECTION OF NEW INFORMATION BY THE PROVINCIAL GOVERNMENT
The Budget proposes changes to the PPTA, which will authorize
the British Columbia government to collect new information from
owners when they register their property, as follows:
Individual purchasers will be
required to identify themselves as Canadian citizens or permanent
Individual purchasers who are not
Canadian citizens or permanent residents will be required to
disclose their citizenship
Corporations will be required to
disclose their total number of directors, the directors'
citizenships, and the name, address and citizenship of all foreign
Transferees will be required to
disclose whether or not they are holding land as bare trustee when
they register and provide information on the settlor and
beneficiaries of a bare trust
The date for the above information collection will be set by
regulation and the government has indicated it will begin shortly
after amendments to the PPTA are in place in order to ensure that
the data collection is compliant with other provincial statutes and
will allow lawyers and notaries who practice real estate
conveyancing to prepare for the new information requirements. The
Budget also indicated the data that is collected will be shared
with the Canada Revenue Agency under the existing information
exchange agreement between British Columbia and Canada.
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guide to the subject matter. Specialist advice should be sought
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