BC budget -new real estate taxes and more

Housing was the dominant issue in the provincial budget.

The government released a 30-point housing strategy aimed at reducing housing demand, curbing tax fraud, building affordable housing, and increasing security for renters.
New tax measures include increasing property taxes and property transfer taxes on residential properties valued above $3 million, expanding the foreign buyer tax, and implementing a housing speculation tax.

Below is a summary of the key real estate measures announced. There’s considerable information to go through.
Affordable housing
• The province is investing $6 billion in affordable housing to create 114,000 homes over the next 10 years.
• The province will enhance local government capacity to build and retain affordable housing.
• The province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases.
• The province intends to track beneficial ownership information.
• The province will collect additional information to increase transparency and strengthen enforcement in real estate.

Tax measures

Speculation tax
• The province will implement a new speculation tax on residential properties, targeting foreign and domestic homeowners who don’t pay income tax in BC. This includes those who leave homes vacant.
• The tax will apply to the Metro Vancouver, Fraser Valley, Capital, and Nanaimo Regional districts and in the municipalities of Kelowna and West Kelowna.
• In 2018, the tax rate will be $5 per $1,000 of assessed value. In 2019, the tax rate will rise to $20 per $1,000 of assessed value.
• The province will administer the tax and will collect data to enforce it including, social insurance numbers, household information, and world-wide income information.

Foreign buyer tax

• Effective Feb. 21, 2018, the foreign buyer tax will increase to 20 per cent from 15 per cent and will be extended to the Fraser Valley, Capital, Nanaimo, and Central Okanagan Regional Districts.
• If the property is located in the Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan, or Nanaimo Regional District, and the property transfer is registered on or after February 21, 2018, there are transitional rules available here.

Property Transfer Tax
Effective Feb. 21, 2018, the Property Transfer Tax on residential properties above $3 million will increase to five per cent from three per cent.

Provincial School Tax
Beginning in 2019, the provincial school tax will increase on most residential properties in excess of $3 million.

Database on pre-sale condo assignments
The province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases. The information will be reported to a designated government office and shared with federal and provincial tax authorities to ensure taxes are paid.

Online accommodation PST and MRDT
Online accommodation platforms are enabled to collect and remit the Provincial Sales Tax and
Municipal and Regional District Tax (Hotel Room Tax).

Property tax treatment for ALR land
As part of the Agricultural Land Reserve (ALR) review, the province is examining residential land in the
ALR to ensure land is used for farming.

Source : Real Estate Board of Greater Vancouver

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