I. Property Transfer Tax
In British Columbia, when buying a house, you have to pay the property transfer tax. The calculation method of the property transfer tax is: for the first $200,000 of the house purchase amount, the provincial government collects the tax of 1%; 2% tax will be charged for the part above $200,000. Considering that the average house price in the big temperature area exceeds 200,000, the simple calculation method usually used is to multiply the purchase amount by 2% and subtract 2000. For example, to buy a 400,000 house, $8,000-$2,000 = 6,000 property transfer tax; Buy 1 million house, $20,000-$2,000= property transfer tax 1 18,000.
The provincial government makes an exception for qualified house buyers. If they are Canadian citizens or residents, they have never owned a property in the world before, and the house price is below $475,000. Those who meet these main conditions and other conditions can reduce this tax. However, for "non-residents", this concession does not exist, and the property transfer tax must be paid.
Goods and Services Tax
If you buy a new house, you need to pay GST, because British Columbia implemented HST in July 20 10 and then abolished it in April 20 13, and the relevant regulations are quite complicated. Simply put, if the transaction date of the new house is on or before March 3 1 5, you must If the transaction is made in April 20 15 1 later, there is no need to pay the transition tax, and the GST to be paid is 5% of the house price.
Non-residents can apply for GST tax refund if they meet the relevant conditions when buying a new house.
3. Taxes to be paid when holding real estate.
Property Tax is the tax that owners who own property in Canada have to pay to the municipal government every year. Non-resident owners can also apply for owner-occupied subsidies if they meet the relevant conditions.
4. Taxes to be paid when renting real estate in Canada.
Income expenses, if non-resident buyers buy houses for their own use, whether they live for their families or use them as holiday houses, they will have no income and will not have to pay taxes. However, if a non-resident buyer buys a rental house and the buyer is also a non-tax resident in the tax law, the income from renting a house is taxable.
The management company will submit 25% of gross income to the tax authorities every month as a retention deposit. Of course, there are many items that can be deducted, such as loan interest, local taxes, management fees, minor repairs and other expenses.
Five, the sale of real estate in Canada to pay taxes.
(a) the sale of housing assets value-added tax
Asset value-added tax = (selling house price-buying house price-related expenses) * 25%, which is charged by the IRS of Canada. When a non-tax resident sells a property, the seller's lawyer or notary will notify the IRS of Canada and apply for a Clearing Certificate to confirm that the amount of tax that must be paid due to the appreciation of the property has been paid. The certificate will be sent to both the seller and the buyer to protect the interests of both parties.
Before obtaining the tax clearance certificate, the buyer's lawyer or notary will detain 25% or more of the selling price in his trust account as a deposit. If the seller still fails to get the tax clearance certificate within 30 days after the delivery of the house or fails to settle the VAT payable with the IRS, the buyer's lawyer will contact the IRS with this deposit, and the seller will settle with the IRS when filing tax returns.
(2) Asset value-added tax on the sale of uncompleted flats
When purchasing uncompleted flats, developers may require non-resident buyers to pay 25-35% advance payment in installments. If the house is sold before the transaction, the lawyer will also detain the above deposit to ensure that the IRS will receive the relevant VAT.
The above is what I brought to you today about the unavoidable tax on Canadian non-residents buying houses. I hope it can help you.