Blog by Beebe Cline

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Top 5 changes impacting real estate in BC

Top 5 changes impacting real estate in BC:

1. Increased Property Transfer Tax on homes above $3 million:

  • Increased by 2% on homes above $3 million; instead of 3% it's now 5%.
    • 1% on the first $200k
    • 2% between $200k and $2 million
    • 3% between $2 million and $3 million
    • 5% on $3 million and above
  • Put into context, when a person purchases a home valued at $5.5 million, they will now pay an increase of $50,000 in PTT, with the total taxes payable of $193,000.

2. Increased School Tax on homes above $3 million:

  • Starting in 2019, an additional school tax will be applied to homes with an assessed value above $3 million. 
    • 0.2% on assessed value between $3 million and $4 million
    • 0.4% on assessed value over $4 million
  • Put into context, a home valued at $5,5 million will need to pay an additional $8000/year in property tax, on top of their regular annual tax. Click for more:

3. Increased Foreign Buyers Tax from 15% to 20%:

  • Increased to 20%, effective immediately. 
  • Previously Metro Vancouver, but expanded to Fraser Valley, Greater Victoria, Nanaimo & Central Okanagan.
  • Put into context, a foreigner who purchases a home valued at $5.5 million will now pay an additional $275,000, with total taxes payable of $1,100,000.

4. New Speculation Tax targeting people who don't pay income tax in BC and leave their property vacant:

  • New annual tax on residential real estate targeted at foreign and domestic homeowners who do not pay income tax in BC. Tax will impact:
    • Domestic homeowners with 2 homes, if one is vacant (eg. Vancouver resident with a vacation home in Kelowna). In this instance, there will be a non-refundable income tax credit, to help offset the tax; however, the credit will likely not cover 100% of the tax.
    • Out of province property owners (eg. Albertans who own a vacation home in Nanaimo).
    • Satellite families, which are households with high worldwide income that pay little income tax in BC.
  • The tax applies to Metro Vancouver, Fraser Valley, Capital & Nanaimo Regional Districts, and Kelowna & West Kelowna.
  • The tax rate:
    • 0.5% of assessed value in 2018
    • 2.0% of assessed value in 2019
    • Put in context, a person owning a home valued at $5.5 million will now pay $27,500 in 2018 and $110,000 in 2019. Tax payable annually if the home is vacant.

5. Increased Tax on short-term rental properties, like AirBnb:

  • Airbnb will now charge 11% tax. The taxes include the 8% provincial sales tax and municipal or regional district taxes of up to 3%.