VICTORIA – New legislation introduced by the British Columbia government intends to charge a 15 per cent additional tax on foreign entities buying residential property in Metro Vancouver. Here are some facts about the proposed law:
— All property transfer transactions will be subject to audits and all property transfer tax returns will be reviewed and verified.
— The audit period is six years from the day a property is transferred.
— Failure to pay may result in a fine of up to $100,000 for individuals and $200,000 for corporations, or up to two years in prison.
Defining foreign entities:
— Classified as foreign nationals, foreign corporations or taxable trustees.
— Foreign nationals are transferees who are not Canadian citizens or permanent residents.
— Foreign corporations are not incorporated in Canada, but controlled by a foreign national or other foreign corporation.
Application of the tax:
— Tax is in addition to the property transfer tax already in place of one per cent below $200,000, two per cent between $200,000 and $2 million, and three per cent on the remainder of a purchase.
— Does not apply to non-residential property.
— Does not apply to Tsawwassen First Nation lands.
— Applies to any foreign entities proportion of the share even if the transfer is between relatives, is a result of an amalgamation or if it’s moved to a surviving joint tenant.
— Applies Aug. 2, regardless of when the contract of purchase and sale was entered into.