BC Budget 2018 – Real Estate Portion Summary

Under Law, Real Estate, Vancouver


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Written on February 27th, 2018

BC Budget 2018 – Real Estate Portion Summary

Welcome to Canada my friends – the Land of Many Taxes! In particular, welcome to the NDP / Green Party taxing rules that are being rolled into the new BC 2018 Budget. There is so much confusion it seems regarding who these taxes will ultimately effect and what is actually being taxed. I will try and explain these in layman terms and give you my opinion of which taxes will affect which type of homeowner.


  1. Property Transfer Tax

Property Transfer Tax (PTT) is a tax paid when Title is acquired.  It is very similar to a sales tax.  The PTT is now 1% of the first $200,000; 2% from $200,000 to $2,000,000; 3% from $2,000,000 to $3,000,000 and, for residential properties, it is now 5% on the value that exceeds $3,000,000.  The bump up to 5% does not apply to commercial properties.  This is a one-time tax and only applies when title is registered in a transferee’s name.

Example: $4,500,000 purchase

Old PTT Payable: $143,000

New PTT Payable: $188,000

Who does this affect?

I would say this affects the Greater Vancouver area the most but this also affects EVERYONE. $3,000,000 is a lot of money but this dollar figure is near the average transaction in many communities in Vancouver. This will make it much more difficult for the average family in certain communities to actually purchase a home or upsize. Only the extreme wealthy will be able to eat these costs… and I wonder where many extreme wealthy people come from? Not from a Country that takes half your hard earned money before any go this. This Tax is a little counterproductive in my opinion compared to the intent of the NDP / Green Mandates.


  1. Speculation Tax 

Here is a Tax that is very interesting as it kind of sounds like a foreign investor tax. However, don’t let the name fool you because the will affect many people including Canadian Citizens and Residents that have multiple properties. All the details are not released yet but the initial concept seems like a Vacancy tax similar to what the City of Vancouver has implemented.

As well, this affects all non-BC income tax payers who do not live or rent out their home. So you may live in Alberta and have a lake Cabin in Kelowna. You will get Dinged as a speculator… you criminal!

The information that has been shared is regarding personal residences and “long-term” rental residences and that they will be exempt form the Speculation Tax. That said, the phrase “long-term” rental residences usually mean “month-to-month” or yearly leases. Rentals such as Airbnb are the types of rentals that fall outside of the “long-term” umbrella.

The Speculation Tax is meant to tax the Vacant home market. However, what if your family owns multiple properties for enjoyment such as a Vacation Home in Victoria or a Condo Downtown Vancouver to enjoy on weekends in order to avoid drinking and driving? Well, in this case, you would be considered a Speculator and taxed the Vacancy tax according to the definitions.

Remember, this tax is above and beyond all property taxes already payable.

The Vacancy Tax is structured as follows:

  • 2018: 0.5% of the Assessed Value will be taxed on homes that are identified as being taxable.
    • Example: A vacant home assessed at $2,000,000 will be taxed an additional $10,000 annually.
  • 2019: 2% of the Assessed Value will be taxed on homes that are identified as being taxable.
    • Example: A vacant home assessed at $2,000,000 will be taxed an additional $40,000 annually.

There are some exemptions that you will be happy to know about.

  1. Primary Residence will be exempt
  2. Rental Bylaws such as strata’s that do not allow rentals will be exempt.
  3. Special circumstances (whatever that means)

Who does this affect?

This tax absolutely affects the investor type no matter where they are from or their Canadian status. This will also affect locals who hold more than one property for their personal enjoyment. I don’t think that was the intention of the Speculation Tax but it certainly could be an outcome.


  1. School Taxes Increased

This one is a doozy. The government is targeting ALL “wealthy” people who are Citizens, Residence, Non-Residence, Companies… (maybe Cats, Dogs, Aliens – joking of course) who own residential real estate.

We have not seen the details yet but it sounds like ALL properties assessed at $3,000,000 to $4,000,000 will be taxed an additional 0.2% School Tax. If the property is assessed over $4,000,000, the School Tax will be increased to 0.4%.


  • Property is assessed at $3,500,000 – An additional $7,000 will be payable each year.
  • Property is assessed at $5,500,000 – An additional $22,000 will be payable each year.

I don’t really understand the need of this tax. I hope in West Vancouver our schools become country clubs because 70% of residences will be forking up the extra annual taxes. I feel sorry for the retirees who live on a beautiful piece of land in West Vancouver passed on for generations, with stunning views, and a cute little home, that is assessed at $7,000,000, which they paid $250,000 forty years ago. How will this owner ever be able to afford the extra $28,000 per year while living on a fixed pension income?

Who does this affect?

Simple. A large population in Vancouver of all origins or status.


  1. Foreign Buyers

The “foreign buyers” Property Transfer Tax has been increased from 15% to 20% and the geographic area that the “foreign buyers” tax applies to the Capital Regional District, Fraser Valley Regional District, Greater Vancouver Regional District, Regional District of Central Okanagan, and the Regional District of Nanaimo.


  • If the property being purchased is located on Tsawwassen First Nation Lands (how ironic if foreign buyers purchase on First Nation Lands)
  • If a Contract of Purchase and Sale was dated before February 20, 2018 and the property transfer occurs before May 18, 2018, no additional tax is paid.

Who does this affect?

In my honest opinion, this 5% increase to Foreign Buyers is a “Tax to buy Votes”. The buyer who can afford 15% can afford 20%. The non-resident ultra-rich will continue to purchase real estate. However, the amount of transactions by non-residents is so small now. I believe the number is around 5% for detached. I’ve heard that the pre-sale market can be as high as 20% but it’s very difficult to find the actual number online as it varies from source to source.

6. Elimination of the BC Home Owner Mortgage and Equity Partnership

If you are not familiar with this program, it is and will soon be “was” a great program to help first time home buyers borrow up to $37,500 of the initial deposit for 5 years and internet free for properties worth less than $750,000. Saving for a deposit can be very challenging for first time homebuyers. This BC program helps with this challenge for individuals who qualify.

That said, now the BC Government is eliminating this program completely. Applications will still be taken until March 31st, 2018. If you are not aware of this program or you are not aware of the elimination of this program, visit https://www.bchousing.org/housing-assistance/bc-home-partnership.

Who does this affect?

This affects first time buyers and the ability for first time buyers to enter the market. This seems counter productive of the affordability aspect of the budget and is a step back for first time buyers.



The government needs to take a different approach to solving the “Housing Crisis”. In my opinion, non-residents or residents who have large expensive homes and service their living expenses with foreign income is the problem. However, these wealthy legal transplants also spend a lot of money boosting our retail economy.

There should be an audit on individuals who claim less than a restaurant server in income taxes paid but live in a $5,000,000 house. To me, that’s the big disconnect in our city. For someone to own a $5,000,000 house would have had to pay hundreds of thousands or millions of dollars in taxes that would contribute to our many services and infrastructure.

I don’t know the exact solution but I feel that view is the best way to find a solution that works for everyone. I understand the merit of trying to make homes more affordable. I’ve worked my butt off to finally have the opportunity to enter the condo market this year. It takes a heck of a lot of hard work and saving to be in a position to purchase – especially when you are being taxed at near 50% off your income.

I just feel that Vancouver especially is setup to keep the middle-class down and the ultra wealthy unchecked.


Written by:

Nick Neacsu
Partner – Neacsu Denner Real Estate Group
Angell Hasman & Associates
C: 604-561-5363