With no warning, on July 25, BC Premier Christy Clark announced an additional 15 per cent Property Transfer Tax (PTT) for foreign nationals. Effective August 2, the tax applies to residential real estate in the Greater Vancouver Regional District (with the exception of properties located on Tsawwassen First Nation lands).
In an effort to ensure market stability, consumer confidence and fairness, BCREA, the Real Estate Board of Greater Vancouver (REBGV) and the Fraser Valley Real Estate Board (FVREB) urged BC Finance Minister Mike de Jong to at least include a provision that would allow transactions that were already underway to be exempt from the new tax. The Minister was not at all sympathetic to that request.
REBGV and FVREB have both published news releases, and also encouraged their members to express their concerns to their MLAs.
BCREA has written to Minister de Jong to register the Association's frustration with the way the additional PTT was implemented, and requesting that future changes (some of which can be made by regulation) include exemptions for transactions that are already underway.
More information about the new tax is available in the government's Tax Information Sheet.
Despite the way the additional PTT was introduced, the good news story is that all of its proceeds will be used for a Housing Priority Initiatives Fund. The fund will be created later this year, and will be used for provincial housing and rental programs. The government will make an initiative investment of $75 million, and then the fund will be topped up with proceeds from the new, additional 15 per cent PTT on foreign nationals.
BCREA's mobile tax calculator has also now been updated to accommodate the new, additional 15 per cent PTT. Click here
to view the updated calculator.