Greater Victoria, BC, offers a picturesque setting, from its stunning coastline to vibrant communities like Downtown Victoria and Saanich. The area's rich history, mild climate, and diverse properties make it a prime destination for international buyers. However, purchasing real estate in Victoria as a foreign buyer comes with specific legal considerations. In this blog, we'll explore the key laws and restrictions that apply to international buyers in the Greater Victoria real estate market, so you can make your investment with confidence.

1. The Foreign Buyer Ban: What You Should Know

In 2018, the provincial government of BC introduced the Foreign Buyer Ban as part of efforts to make homeownership more accessible to residents of British Columbia. This ban prevents non-Canadian citizens or permanent residents (foreign nationals) from purchasing residential properties in certain areas of BC, including Greater Victoria.

The ban applies to residential properties in Greater Victoria and other high-demand regions like Vancouver. However, there are exceptions, and it’s important to know that the ban does not apply to commercial real estate. So, foreign investors interested in commercial properties in Greater Victoria are still able to purchase them.

2. Who Is Considered a Foreign Buyer?

A "foreign buyer" is defined as anyone who is neither a Canadian citizen nor a permanent resident of Canada. This includes individuals who hold refugee status in Canada. For instance, U.S. citizens or residents of other countries without Canadian citizenship or permanent resident status would be considered foreign buyers.

If you're a foreign buyer looking to purchase property in Greater Victoria, it's crucial to understand the restrictions in place, but there are potential avenues that may allow you to still make a purchase.

3. Exemptions to the Foreign Buyer Ban

Certain exemptions allow foreign nationals to purchase property in Greater Victoria, despite the foreign buyer ban. Some common exemptions include:

• 
  

  Temporary Residents: Foreign nationals with a valid work or study permit in Canada may be eligible to buy property in BC if they live in the province for at least 183 days each year.

  
  


• 
  

  Spouses of Canadian Citizens or Permanent Residents: Foreign nationals married to or in a common-law relationship with a Canadian citizen or permanent resident may qualify for an exemption.

  
  

If you believe you qualify for an exemption, it's important to consult with a local real estate agent or lawyer who can help clarify your eligibility and navigate the legal process.

4. Speculation and Vacancy Tax (SVT)

In addition to the foreign buyer ban, BC imposes a Speculation and Vacancy Tax (SVT) targeting vacant or underutilized properties. This tax aims to reduce the number of empty homes in BC and encourage responsible property ownership.

Foreign buyers who purchase property in Greater Victoria may be subject to the SVT if the property is not their principal residence. The tax applies to vacant properties, with rates depending on the municipality. Greater Victoria, including neighborhoods like Oak Bay, Saanich, and Victoria West, falls under the jurisdictions affected by this tax.

Make sure to factor in the potential costs associated with the SVT before making a purchase. The tax is based on the assessed value of the property, and failing to meet occupancy requirements could result in a higher tax burden.

5. The Property Transfer Tax (PTT)

When buying property in Greater Victoria, foreign buyers must also consider the Property Transfer Tax (PTT). This tax is calculated as a percentage of the purchase price or the fair market value of the property, whichever is higher. The tax is levied at the following rates:

• 
  

  1% on the first $200,000

  
  


• 
  

  2% on the portion between $200,000 and $2 million

  
  


• 
  

  3% on the portion above $2 million

  
  

Additionally, foreign buyers face an extra 20% Foreign Buyers Tax. This tax is applied on top of the standard PTT and is based on the fair market value of the property. As a foreign buyer, be prepared for this additional tax, which is due at the time of purchase.

6. Legal Requirements for Foreign Buyers

For foreign nationals looking to purchase real estate in Greater Victoria, it’s essential to follow the legal requirements involved in the buying process. These steps include:

• 
  

  Obtain a Canadian Tax Identification Number (TIN): Foreign buyers must obtain a TIN to pay taxes and complete the purchase.

  
  


• 
  

  Hire a Real Estate Lawyer: It’s highly recommended to hire a lawyer with expertise in BC property law to navigate the legal complexities and ensure compliance with foreign buyer regulations.

  
  


• 
  

  Use a Qualified Realtor: Work with a realtor familiar with the local real estate market in Greater Victoria and the specific regulations for foreign buyers. Their expertise can help you find the right property and streamline the purchasing process.

  
  

7. Understanding the Greater Victoria Real Estate Market

The Greater Victoria real estate market is highly competitive, with neighborhoods such as Oak Bay, Saanich, and Victoria West offering stunning properties, from waterfront condos to heritage homes. However, areas like Downtown Victoria and James Bay can be particularly challenging for international buyers due to limited inventory and high demand.

While the foreign buyer ban, taxes, and other restrictions may add complexity to the buying process, international buyers can still find opportunities with the right guidance and a solid understanding of the local market.

Final Thoughts

For foreign buyers interested in Greater Victoria real estate, understanding the Foreign Buyer Ban, Speculation and Vacancy Tax, Property Transfer Tax, and legal requirements is crucial. While these regulations may create additional challenges, there are exemptions and strategies to navigate them successfully.

If you're considering purchasing property in Greater Victoria, it’s essential to work with local real estate professionals and legal advisors who can guide you through the process and ensure that you comply with all regulations. With the right support, your dream of owning a property in Greater Victoria can become a reality.