The federal government will get a new weapon in its arsenal when it comes to collecting foreign buyer data.
As of November 27, 2017, all “foreign nationals” who purchase residential real estate in the Greater Vancouver Area will have to fill out the new Property Transfer Tax (PTT) return. While this requirement is not new—the former B.C. Liberals implemented the foreign buyer’s tax in August 2016—this amended form will require much more information from the foreign buyers. It’s a step towards mandatory disclosure of standardized information from foreign buyer’s of B.C. real estate.
Step towards more accurate foreign buyer data
The biggest difference between the old and new PTT is that buyers can no longer submit the form without the help of a legal professional. While on the surface this may appear to be a small step towards a greater bureaucratic system, it may actually be a smart strategy towards a more truthful and accurate collection of foreign buyer data.
Up until now, foreign buyers or their non-legal representatives could fill out and submit the PTT without legal help. By forcing foreign buyers to seek out the services of legal professionals, the government is gaining an extra layer of protection against inaccuracies at best, or worse, fraudulent activities.
More info means more knowledge
Now each foreign national—a person who is not a Canadian citizen or permanent resident of Canada—must apply for their own, individual exemption. To qualify for an exemption, each foreign buyer must provide a BC PN—the Provincial Nominee and certificate number that proves the foreign national can be exempt from the 15% foreign buyer’s tax.
The new form also requires each foreign buyer to provide a verifiable date of birth as well as an Individual Tax Number (ITN)—a number supplied by Canada Revenue Agency to anyone who is not a Canadian resident but must file a Canadian income tax return. If the purchaser is a foreign corporation, then a business number must also be included on the PPT.
Better still, all non-corporate foreign buyers must declare whether or not they intend to use the B.C. property as their principal residence.
By standardizing the type of information collected and making it mandatory, the government is creating a more robust data source, which will help statisticians, analysts and policymakers make better housing decisions. (At least, that’s the theory.)
Legal pros are on the hook
This new form will also put legal professionals on the hook. Just like an accountant or bookkeeper who is tasked with completing and filing an income tax return, each legal professional will be required to state who they are representing, as well as providing their own contact information. The legal professional will also be required to implement due diligence procedures to collect and verify both the identity of the foreign buyer, as well as the legal description, intended use and value of the property purchased.
As a result, legal professionals involved with filing the new PPT will have to obtain the property’s Parcel Identifier Number (PID), the land title registration number, while verifying the buyer’s residency status as well as a current daytime number where the buyer can be reached. Legal professionals will also be required to provide the full fair market value of the property—not just the value purchased by the foreign buyer.
The new PPT return—commonly known as the foreign buyer’s tax— is effective November 27, 2017 and is available for download from the Land Title and Survey Authority of BC’s Electronic Filing System (EFS) or accessed on myLTSA.