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In a surprise development, BC Government announced a new 15% tax for any residential properties purchased by a foreigner investor effective Aug. 2, 2016.
The tax will also apply to any residential properties purchased by a foreign corporation, defined as not being registered in Canada and/or are controlled by foreigners.
According the legislation, the definition of “residential” will be any properties that are Class 1 (residential) for land and/or improvement value. This definition indicates that the new tax would also apply to foreigner acquired assets including:
*For properties that have a split class, the extra tax would apply to the residential portion of the property. If a property had an assessed value (as per BC Assessment) of 40% Class 1 and 60% Class 6, 40% of the reported sales price would be subject the new tax of 15%.
For those that attempt to avoid paying the additional tax, BC Government can go back 6 years from the transaction date to re-assess. While there is no explicit mention of penalties or fines, there is language that allows the government to change the rate anywhere from 10% to 20%.
This tax will apply to all foreigner purchased properties in Metro Vancouver, from Bowen Island to Langley, excluding those on treaty lands of the Tsawwassen First Nation.
If you have any questions regarding this legislation and possible market ramifications, please contact dnb [at] aecpropertytax.com (subject: Email%20thru%20AEC%20website%20-%20Inquiry%20about%20BC's%20new%20foreign%20ownership%20tax) (David Nishi-Beckingham) or vleschuk [at] aecpropertytax.com (subject: Email%20thru%20AEC%20website%20-%20Inquiry%20about%20BC's%20new%20foreign%20ownership%20tax) (Vance Leschuk). We would be glad to help!