On February 16, 2016, British Columbia Finance Minister Michael de Jong tabled the British Columbia budget for 2016. Included in the budget were changes to property transfer tax, which is generally paid whenever real property in the province is transferred to another person, subject to certain exemptions.
Effective February 17, 2016, there will be a property transfer tax exemption or refund on newly constructed homes up to $750,000 that are purchased by Canadian citizens or permanent residents. Homes eligible for the exemption or refund include the first purchase of a new housing unit or a newly subdivided unit and the purchase of land without a home, on which the owner builds a home and moves into it within one year. In order to qualify for the exemption or refund, the purchaser must live in the home as their principal residence until one year after the purchase date and the value of the finished property must be below $750,000. There will also be partial exemptions available for properties with a fair market value of up to $800,000.
In addition, the Minister introduced a 3 percent property transfer tax on properties valued over $2 million, effective February 17, 2016. Transfers of these properties will continue to be taxed at 1 percent for the first $200,000 of the property value and 2 percent on the property value between $200,000 and $2 million.
The Minister also announced proposed changes to the Property Transfer Tax Act which will permit the province to collect information on the citizenship of purchasers. If property is purchased by a corporation, the corporation must disclose how many directors it has, whether its directors are Canadian citizens or permanent residents of Canada, and the name, address and citizenship of all foreign directors. Purchasers who are bare trustees will also have to provide information on the settlors and beneficiaries of a trust, similar to that required for individual and corporate purchasers.