British Columbia's 2020 budget includes a new exemption from the 20% additional property transfer tax (referred to as the “foreign buyer tax”) for certain partnerships.
The measure would provide relief to taxpayers and is intended to allow qualifying Canadian-controlled limited partnerships to be treated in a manner consistent with Canadian-controlled corporations. The draft legislation and effective date for the new exemption have not yet been released, but it is expected new legislation would introduce a new concept of a qualifying Canadian-controlled limited partnership.
Under current B.C. law, the 20% foreign buyer tax generally applies to certain transfers of residential property located in specific geographic areas within the province. Specifically, it applies when the transferee is a foreign national, a foreign corporation or a “taxable trustee” (i.e., a trust with a foreign national or foreign corporation as trustee or beneficiary). A foreign corporation is defined for this purpose as a corporation not incorporated in Canada, or a corporation that is incorporated in Canada but that is controlled directly or indirectly by foreign entities (unless the corporation's shares are listed on a Canadian stock exchange).
The current rules do not explicitly address how the foreign buyer tax applies to a transferee that is a partnership.
Read a February 2020 report prepared by the KPMG member firm in Canada
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