Property Transfer Tax Rate on the Value of Residential Properties Above $3 million Increased
Effective February 21, 2018, a further tax rate of 2% is applied to the fair market value of the residential component of a taxable transaction that exceeds a threshold of $3 million. The total rate of tax on the part of the residential component above the threshold is 5%, which is made up of the existing 3% rate on the fair market value of taxable transactions above $2 million plus the new 2% rate on the portion of the fair market value of the residential component above $3 million.
Effective February 21, 2018, the additional property transfer tax rate for foreign purchasers is increased from 15% to 20%. Furthermore, the tax is expanded to the Capital Regional District, the Regional District of Okanagan, the Fraser Valley Regional District and the Regional District of Nanaimo. Transitional rules apply to these new areas that may exempt eligible property transactions entered into prior to February 21, 2018.
Effective for transactions that occur on or after February 21, 2018, transfers of a bankrupt’s principal residence from a trustee in bankruptcy to the bankrupt or the bankrupt’s spouse or former spouse are exempt from Property Transfer Tax. Prior to this new rule, such transactions were only exempt if no consideration was exchanged.