FOREIGN BUYER'S TAX (Please note that the information provided below is for intended as a general guideline and should be verified by your professional tax and/or legal advisor if you think it may apply to your situation).
What is it?
The Foreign Buyer's Tax is an additional Residential Property Transfer Tax on residential properties purchased within specified areas of B.C. by Foreign Nationals, Foreign Corporations and Taxable Trustees.
How much is it and where does it apply?
If the property is within the following areas, the Foreign Buyer's Tax is 20% of the fair market value of your proportionate share:
The additional property transfer tax doesn’t apply to properties located on Tsawwassen First Nation lands.
Do I qualify for an exemption? Where can I find out more information?
A person who is not a Canadian citizen or permanent resident of Canada, including a stateless person.
A foreign corporation is a corporation that is one of the following:
Not incorporated in Canada, or
Is incorporated in Canada but is controlled directly or indirectly by one or more foreign entities (see section 256 of the Income Tax Act (Canada) for further details), unless the shares of the corporation are listed on a Canadian stock exchange.
Further to the definition in the Property Transfer Tax Act, section 2.01, a taxable trustee is:
a foreign national or foreign corporation holding title in trust for beneficiaries, or
a Canadian citizen or permanent resident, if a beneficiary of the trust is a foreign national or foreign corporation and that beneficiary holds a beneficial interest in residential property held by the trust immediately after registration of the transfer with the Land Title Office.
The term ‘beneficial interest’ refers to a right or expectancy in relation to property of the trust that is distinct from legal title.
A trust does not need to be established by a written, notarized document. An intention by words or conduct to create a trust may create a trust relationship. In some cases, the existence of a trust relationship is presumed, for example in the case of a resulting trust.
The existence of a trust relationship will often depend on mixed questions of fact and law. Where it is unclear if a trust relationship exists, consult a trust lawyer.