British Columbia Extends Property Transfer Tax Exemption for Residential Property Purchases – Tax

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Canada: British Columbia extends property transfer tax exemption for residential property purchases

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May 3, 2021, by Order in Council 277, the government of British Columbia amended the Property Transfer Tax Regulation, BC Reg 74/88. This amendment concerns the application of the tax on additional real estate transfers payable by foreign buyers of residential property in specific regions of the province (the “foreign buyers tax”) and it extends an exemption introduced on June 1, 2020 , applicable to a limited partnership with a minority of foreign limited partners. This modification is retroactive to June 1, 2020.

The exemption introduced last year provided that residential property that would otherwise attract the application of the tax to foreign buyers were exempt from the tax if the buyer was a Canadian corporation that was a general partner of an incorporated limited partnership. or registered under the British Columbia regime. Partnership law and the partnership acquired the residential property in the name of the limited partnership, in respect of which:

  1. the combined interest in the limited partnership of all foreign limited partners was less than half of the right of all partners to share in the profits of the limited partnership; and
  2. each general partner and limited partner was resident in Canada for income tax purposes throughout the tax year in which the acquisition took place.

However, this exemption did not apply when a nominee company was used to acquire title to the residential building instead of the general partner.

With this regulatory amendment, the government has now broadened the exemption to allow a nominee corporation to acquire residential property on behalf of an eligible Canadian-controlled limited partnership, provided certain specific conditions are met.

In addition, due to the retroactive application of the amendment, the regulation provides that a nominee nu-fiduciaire or general partner may request a refund of the tax paid during registration if he benefited from an exemption from the date of registration. June 1, 2020, but failed to request this exemption at time of check-in. The assignee has up to six years from the date of registration to request a refund. If the administrator is satisfied that the assignee could have benefited from an exemption under the Regulation, a refund equivalent to the amount of the exemption entitled to the assignee on the date of registration will be issued.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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