Updating Foreign Buyer Standard Forms Clauses
On February 20, the provincial government announced new tax measures to curb housing affordability in Budget 2018. Part of the measures introduced were to increase the percentage and geographical areas affected by the foreign buyer tax. Unlike the proposed speculation tax, which is still being developed and has a much longer implementation timeline, the changes to the foreign buyer's tax would take effect immediately. As such, BCREA has made adjustments to the relevant Standard Forms clauses we provide for REALTORS® to use in Standard Forms like the Contract of Purchase and Sale.
The revised clause accommodates the following changes:
- The additional Property Transfer Tax for buyers that are foreign entities has increased to 20 per cent from 15 per cent
- The boundaries have been expanded to include the Capital Regional District, the Fraser Valley Regional District, the Regional District of the Central Okanagan, The Regional District of Nanaimo as well as the Greater Vancouver Regional District
- An additional 2 per cent will be paid on the portion of the fair market value that is greater than $3 million
When dealing with buyers that are foreign entities, you should always advise your client to seek independent legal advice with respect to the payment of the Property Transfer Tax.
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