Digging Deeper Into The New Foreign Entity Tax

In our blog post from July 25, 2016 we highlighted the provincial government's introduction (effective August 2, 2016) of the new 15% property transfer tax (the "Foreign Entity Tax") on foreign buyers of residential property in the Greater Vancouver Regional District ("Metro Vancouver").

The Foreign Entity Tax has been introduced by way of an amendment to the Property Transfer Tax Act(British Columbia) (the "Act").

Foreign Entity Tax applies in respect of a "taxable transaction", where such transaction includes "residential property" located either wholly or in part within a "specified area" and where a transferee is a "foreign entity" or a "taxable trustee", or both.

This article examines each of these key elements to determine those transactions that will trigger the required payment of this Foreign Entity Tax and provides further details of these new rules.