Additional Property Transfer Tax (Foreign Buyer PTT)

The Additional Property Transfer Tax (Additional PTT) is a 20% tax imposed on the fair market value of residential property transferred to a foreign national, foreign corporation, or taxable trustee in designated regions of BC, under the BC Property Transfer Tax Act. It is separate from and payable in addition to the standard PTT rates of 1%, 2%, 3%, and the additional 2% on residential value over $3,000,000. The tax was introduced to address housing affordability concerns in high-demand markets across the province.

Under the BC Property Transfer Tax Act, the Additional PTT applies to residential property purchases in five designated regional districts: Metro Vancouver, the Capital Regional District, the Fraser Valley Regional District, the Regional District of Central Okanagan, and the Regional District of Nanaimo. Properties located outside these designated areas are not subject to the Additional PTT, even if the purchaser would otherwise qualify as a foreign national or foreign corporation. Buyers and their representatives should confirm the regional district of a specific property before completing a transaction.

Under the BC Property Transfer Tax Act, a foreign national is an individual who is neither a Canadian citizen nor a permanent resident of Canada as defined under the Immigration and Refugee Protection Act (Canada). Foreign corporations and taxable trustees who meet the definitions set out in the Property Transfer Tax Act are also subject to the Additional PTT. Canadian citizens and permanent residents are exempt from this additional tax regardless of where they currently reside.

The Additional PTT is calculated on the fair market value of the residential property transferred, as defined under the BC Property Transfer Tax Act, not necessarily only the purchase price if the two differ. If a property has mixed use (both residential and non-residential portions), the Additional PTT applies only to the residential component of the fair market value. The BC Ministry of Finance provides guidance on how to apportion value for mixed-use properties.

Yes, if one or more purchasers in a joint transaction is a foreign national, foreign corporation, or taxable trustee, the Additional PTT applies to that person's proportionate share of the property's fair market value under the BC Property Transfer Tax Act. The Canadian citizen or permanent resident co-purchaser is not subject to the Additional PTT on their own share. Parties entering into co-ownership arrangements involving foreign nationals should confirm the allocation of ownership interests before completing the transfer.

The BC Property Transfer Tax Act provides certain limited exemptions from the Additional PTT, including for foreign nationals who are nominees under the BC Provincial Nominee Program and who meet prescribed conditions, as well as for transfers involving certain diplomatic or consular roles as specified in the Act. Exemptions are subject to specific eligibility requirements and conditions set out in the Act and its regulations, and buyers should consult current BC Ministry of Finance guidance to confirm whether they qualify. A BC lawyer or notary can assist in assessing eligibility for any available exemption.

Yes, the BC Property Transfer Tax Act provides a refund mechanism for individuals who paid the Additional PTT and subsequently became a Canadian citizen or permanent resident within a prescribed period after the registration date, provided they also meet other conditions such as having used the property as their principal residence. Consult the current BC Ministry of Finance guidance for the exact timeframes and conditions that must be satisfied to qualify for a refund. Applications for refunds are submitted to the BC Ministry of Finance.

The Additional PTT is levied on top of the standard PTT tiers under the BC Property Transfer Tax Act, which currently apply at 1% on the first $200,000, 2% on the portion from $200,000 to $2,000,000, 3% on the portion from $2,000,000 to $3,000,000, and an additional 2% on residential value exceeding $3,000,000. The Additional PTT of 20% is calculated separately on the residential fair market value and added to the total PTT payable at the time of registration. A foreign buyer in a designated region therefore pays both the standard PTT and the Additional PTT simultaneously.

BC real estate licensees are governed by the Real Estate Services Act (RESA) and the rules administered by the BC Financial Services Authority (BCFSA), which require licensees to act honestly and in good faith and to disclose material information relevant to a transaction. While licensees are not tax advisors, they should ensure clients are aware that the Additional PTT under the BC Property Transfer Tax Act may apply to their purchase so the client can seek appropriate legal or tax advice. Licensees must not misrepresent a buyer's status or facilitate any arrangement intended to improperly avoid the Additional PTT.

The Additional PTT is due at the time the property transfer is registered at the BC Land Title Office, consistent with the standard PTT payment process under the BC Property Transfer Tax Act. The tax return and payment are typically completed by the buyer's legal representative — a BC lawyer or notary — who submits the PTT return, including the Additional PTT where applicable, through the Land Title and Survey Authority of BC's electronic filing system. Failure to pay the correct amount of Additional PTT at registration can result in penalties and interest under the Property Transfer Tax Act.