BC Housing Taxes in 2018

The BC Government released its 2018 budget in February. This budget includes new housing taxes. It also brings some changes to current taxes. The Fraser Valley Real Estate Board (FVREB) itemized some of these changes. I have further summarized insights about BC Housing Taxes changes in 2018 below.

Property Transfer Tax (PTT)

The Property Transfer Tax (PTT) now increases to 5%. This applies to the portion of a property’s fair market value above $3 million. Previously, it was 3%. Homes over $3 million will also see increases in BC school tax.

The Foreign Buyers’ Tax increased to 20% from 15%. This tax now includes the Fraser Valley. BC will also require additional information about beneficial ownership. This information will be on a new Property Transfer Tax Return form (Version 30). You can download this form from the Land Title & Survey Authority of BC. Your questions about the PTT can be answered HERE.

New Speculation Tax Details

A new annual “speculation” tax targets specific property owners. It applies to those who own residential properties in BC but do not pay income tax. It also targets those with vacant homes.

Here are key points about the Speculation Tax:

  • The tax became effective for the 2018 tax year.
  • Up-front exemptions are available for qualifying long-term rental properties. Certain special cases also qualify.
  • A non-refundable income tax credit will offset this new tax. This provides relief for those who do not qualify for an up-front exemption but pay tax in BC.
  • This new tax initially applies to several regional districts. These include Metro Vancouver, Fraser Valley, Capital, and Nanaimo. It also applies in the municipalities of Kelowna and West Kelowna.
  • In 2018, the tax rate is $5 per $1,000 of assessed value. It will increase to $20 per $1,000 of assessed value in 2019.
  • The province will administer the tax. It will collect data including social insurance numbers, household information, and worldwide income.
  • Any collected information will also be shared with the Canada Revenue Agency.

Additional Tax Measures

Online Accommodation PST and MRDT: Online accommodation platforms, like AirBnB, can now collect and remit the Provincial Sales Tax (PST) and Municipal & Regional District Tax (MRDT).

Property Tax Treatment for ALR land: The Province plans to review property tax treatment of residential property in the Agricultural Land Reserve (ALR). This is part of a broader review. It aims to ensure ALR land is used for farming.

Taxes on pre-sold condos: Developers must now collect and report comprehensive information. This applies to the assignment of pre-sale condo purchases. They will report this information to a designated government office. It will then be shared with federal and provincial tax authorities. This ensures taxes are paid.

Enhancing Property Ownership Transparency

The government plans for tax administrators to compel access to information. This information is in the MLS database. It must be relevant to property transfers. The BC Real Estate Association (BCREA) will investigate which information the government can compel.

The Province is creating a publicly accessible land ownership registry. Federal and provincial tax and law enforcement authorities will also access this. Legislation will be introduced. It will require BC corporations to hold accurate and up-to-date information on beneficial owners. This information must be available in their own record offices. Law enforcement, tax, and other authorities can access it.

The new tax measures came into effect on February 21, 2018. Changes to the Property Transfer Tax (PTT) and the Foreign Buyers’ tax have an immediate impact on ongoing transactions.

If you have questions about how current and new taxes, or tax changes, will affect you, please contact me directly.