New Immigrants to BC and the Additional Property Transfer Tax

The Foreign Buyers Tax, officially called the Additional Property Transfer Tax (“ATT”), was introduced in 2016 by the BC government. The ATT is 20% of the fair market value of certain properties in BC  and is payable when an individual who is not a permanent resident or a citizen of Canada buys property in certain areas, including Greater Victoria, Greater Vancouver, Nanaimo and Kelowna. There are two exceptions to paying ATT for recent immigrants to BC.

Refund for Recent PRs and Citizens

The first exception is a refund of the ATT for individuals who become Canadian permanent residents or citizens within 1 year of the registration date for the property transfer. The eligibility requirements for the refund are as follows:

1. The purchaser used the property as their principal residence;
   1. moved into the property within 92 days of the registration date for the property transfer; and
   2. continued to live in the property as their principal residence for at least one full year after the registration date.
2. This refund can be claimed only once.
3. The purchaser must apply for the refund between 12 months and 18 months after the registration date for the property transfer.

The BC PNP Nominee Exception

The second exception is for BC Provincial Nominees who hold a valid provincial nomination for a permanent residence application to Canada when the property transfer is registered with the Land Title Office. The eligibility requirements for this exemption are as follows:

1. The purchaser holds a valid BC Provincial nomination on the registration date for the property transfer.
2. The property will be the purchaser’s principal residence.
3. The exemption can be claimed only once.

The second exemption for BC PNP nominees applies only to the principal applicant. If a nominee and the nominee’s spouse want to purchase property jointly, the nominee’s portion of the ATT is exempt, but the other spouse must pay their portion of the ATT. If the other spouse becomes a permanent resident within 1 year of the purchase date, that person can apply for the refund under the first exception.

The BC government defines “principal residence” for the purposes of ATT as follows¹:

A principal residence is the usual place that a person makes their home.

If a person owns more than one home, they can’t designate which one is their principal residence. Their principal residence is where they live and conduct their daily affairs, like paying bills and receiving mail, and it’s generally the residence used in government records for things like income tax, Medical Services Plan, driver’s licence and vehicle registration.

Other eligibility requirements and timing issues may be applicable to different individuals depending on their circumstances. This article is a broad overview of the Foreign Buyers Tax for general information only. Please seek professional advice with respect to your specific circumstances regarding ATT.

¹https://www2.gov.bc.ca/gov/content/taxes/property-taxes/glossary-faq/glossary#principal-residence