Foreign Buyers Tax in Greater Vancouver area
Tax avoidance is clearly a big no no, but saving on the 15% Foreign Buyers Property Transfer Tax may mean the difference between buying a home or commercial investment property – or not.
Investing in the Vancouver real estate market has generally always been a great investment for locals and foreigners alike, and although studies show that there has been no impact on the Metro Vancouver marketplace as it pertains to foreign investors, it comes with some frustration for foreigners to have to pay this added tax.
Not only does this lessen the buying pool for sellers, it also will cause some foreign buyers to forego investing in BC real estate, and perhaps choose to invest in other Canadian provinces that are cheaper – offsetting this added 15% tax.
So how can one go about saving this foreign buyers tax? Allow me to offer you some ideas!
Buy Property Outside of the Greater Vancouver Area
New real estate hotspots are emerging outside of Vancouver, which include: Vancouver Island, Abbotsford, Chilliwack, Mission and Squamish – just to name a few. Some of these locations are still within a commutable distance to Vancouver. Offering the benefits of a country setting, larger pieces of land and square footage of homes. As well as they are slightly cheaper than purchasing real estate within the city of Vancouver itself.
Buy Commercial Property Anywhere in Greater Vancouver
If you are looking to purchase commercial property, you can buy anywhere in the Greater Vancouver area. This will still get you into the real estate investment pool without having to fork over additional costs. The rewards for leasing, can be substantial.
Take Steps to Become a Canadian Citizen or Permanent Resident in Canada
To be eligible to become a Canadian citizen you must fulfill various criteria, some of which include:
- Person must be at least 18 years old to apply.
- Have permanent resident (PR) status in Canada.
- You must have been physically present in Canada as a permanent resident for at least 1,460 days during the six years immediately before the date of your application.
- Must have met your personal income tax filing obligations in four taxation years that are fully or partially within the six years immediately before the date you apply.
To become a Permanent Resident in Canada, the basic steps include…
- Get PR card. Apply.
- Apply for a PR travel document.
- Change your address.
- Start your life in Canada.
- Find immigrant services near you.
- Apply for citizenship.
Buyers looking to get into the real estate market for new construction should be considered based on location and PTT parameters. Buyers who have already purchased and are looking to assign their agreements, could also check out the pool of buyers I have that may be interested in assuming their Contract of Purchase and Sale
Exemptions Related to the 15% Property Transfer Tax
As a foreigner who is purchasing real estate in Vancouver, the additional tax will apply to your share of the residential property. This applies to the sale of property between relatives, taking on (amalgamation) a piece of property as a transfer, or becoming trustee in relation to the property.
However, the 15% PTT tax will not apply to mutual fund trusts, real estate investments trusts, or investments that flow through a trust fund of some form.
With Vancouver’s hot real estate market starting to cool. Foreigners are beginning to look outside of Vancouver to still capitalize and profit on real estate investments that continue to be optimal choices. And as a Vancouver-centric realtor, I offer a network of real estate professionals province-wide who can source out the best deals.
So if you are looking to invest but are hesitant due to the new Foreign Buyers tax, reconsider with the above options, and give me a call to further discuss!