Other Taxes Payable at Purchase
GST or 'Goods and Services Tax' is a 5% Federal Tax that is payable on the sale of brand new or substantially renovated properties in BC*. Substantially renovated typically refers to buildings that have been completely overhauled excepting the original foundation, external walls, interior supporting walls, floor, roof and staircase. Newly constructed properties include presale condo sold by developers, or an owner-builder home. It also includes the assignment of contract purchased from another investor. Whether or not GST is payable not always immediately clear so care should be taken to make it so.
GST is due at the time of completion and is 5% of the purchase price, subject to any rebates.
There is a New Home Rebate which amounts to a 36% reduction in the GST that is payable for homes under $350,000, so long as the buyer intends on living there an his/her permanent residence. Property purchases between $350,000 and $450,000 qualify for partial rebates and those over $450,000 receive no GST at all.
Purchasers who plan on renting out the new home may also be eligible for a GST New Residential Rental Rebate.
Similar to the GST New Housing Rebate, only new homes priced to a maximum of $350,000 qualify to receive the full GST NRR Rebate. A partial GST NRR Rebate is available for properties priced between $350,000 and $450,000.
*Realtor and contractor fees are also subject to GST. These are typically paid by the seller but if a buyer has retained a buyer's agent working under a fee agreement", it may apply.
Foreign Buyers Tax:
The Foreign Buyers Property Transfer Tax is an additional 20% tax that foreign entities or taxable trustees pay on top of the standard property transfer tax. It applies to all residential property located in the Greater Vancouver Regional District (GVRD) (also known as the Metro Vancouver Regional District). As of February 21st, 2018, the taxation zone has also been expanded to include the Fraser Valley, Capital, Nanaimo, and Central Okanagan Regional Districts.
The GVRD includes Anmore, Belcarra, Bowen Island, Burnaby, Coquitlam, Delta, Langley City and Township, Lion’s Bay, Maple Ridge, New Westminster, North Vancouver City and District, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, Surrey, Vancouver, West Vancouver, White Rock and Electoral Area A.
The BC Government defines a "foreign entity' and "foreign corporation" as:
"A foreign entity is a property purchaser or transferee that is a foreign national or a foreign corporation.
A foreign national is 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
Is incorporated in Canada but is controlled in whole or in part by a foreign national or other foreign corporation, unless the shares of the corporation are listed on a Canadian stock exchange
Is controlled directly or indirectly by a foreign entity (see section 256 of the Income Tax Act (Canada) for further details)
A taxable trustee is a trustee that is a foreign national or foreign corporation holding title in trust for beneficiaries. The taxable trustee can also be a Canadian citizen holding title in trust for beneficiaries who are foreign nationals or foreign corporations."
Annual Property Taxes:
BC property owners generally have until the early July deadline to pay their taxes (or defer payment). Therefore, depending on whether the previous owner of the property you are buying pre-paid their taxes, you could be on the hook to repay them for the potion of the year you will own the property. Likewise, if they haven't paid their taxes, they will be reimbursing you for the months the property did not belong to you. All of this is figured out at completion by the lawyer or notary that has been hired to oversee transfer of the funds and any adjustments.
*** For information about the BC Property Transfer Tax go here.