B.C. Budget: Commercial Real Estate Implications

On February 16, 2016, B.C. Finance Minister Mike De Jong delivered the B.C. budget for the 2016/2017 fiscal year starting April 1.

Many commentators have surmised that Premier Christy Clark responded to intense public pressure to address the perception that Metro Vancouver has a housing affordability crisis, with a budget that offers a tax break on the acquisition of new homes and the commitment to start collecting data on foreign buyers. However, little has been written on the implications of the budget on commercial real estate transactions in B.C.

Effective February 17, 2016, property transfer tax has been increased from 2% to 3% on that portion of a property's value which exceeds $2 million. Thus, the bulk of commercial real estate acquisitions will be affected by the increase, where the value of the purchased property is often significantly greater than $2 million.