Foreign Buyer Ban Update: What Canadian Citizens Married to Non-Canadians Need to Know Before Buying Property in Victoria, BC

If you're a Canadian citizen buying a home with a spouse who is not a Canadian citizen or permanent resident, there is an important tax issue that could cost you tens of thousands of dollars.

Many buyers assume that because one spouse is Canadian, the purchase is automatically exempt from Canada's foreign buyer rules. Unfortunately, that's not always the case—particularly here in British Columbia.

Here's what you need to know.

---

The Federal Foreign Buyer Ban Remains in Effect

The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act has been extended until January 1, 2027. The legislation continues to prohibit many non-Canadians from purchasing residential property in Canada's major housing markets, including Victoria, unless they qualify for one of the exemptions.

Over the past few years, the federal government has also expanded several exemptions for certain temporary residents, work permit holders, students and spouses in specific situations. However, qualifying for an exemption under the federal legislation does not automatically eliminate provincial taxes.

---

The Big Surprise for Many Couples

One of the most common misunderstandings involves couples where:

• One spouse is a Canadian citizen or permanent resident; and
• The other spouse is a foreign national.

Many people assume that purchasing together avoids any additional tax.

In British Columbia, that's often not the case.

---

BC's Additional Property Transfer Tax Still Applies

British Columbia has its own Additional Property Transfer Tax (often called the Foreign Buyers Tax).

If a foreign national is registered on title, they may be required to pay the 20% Additional Property Transfer Tax on their ownership share of the property—even if they are buying with a Canadian spouse.

Example

Imagine a couple purchases a home in Victoria for $1,000,000.

Ownership is registered:

• Canadian spouse – 50%
• Foreign national spouse – 50%

The foreign spouse's taxable interest is $500,000.

The Additional Property Transfer Tax would be:

20% × $500,000 = $100,000

That is in addition to the regular Property Transfer Tax, legal fees and other closing costs.

---

Why Does This Happen?

The federal foreign buyer legislation and BC's Additional Property Transfer Tax are two separate laws with different rules.

A purchaser may qualify under the federal legislation to buy property, but still trigger BC's provincial tax depending on their immigration status and ownership interest.

This distinction catches many buyers by surprise because the rules are similar—but not identical.

---

Does Every Non-Canadian Spouse Have to Pay?

Not necessarily.

There are several exemptions that may apply depending on a purchaser's immigration status, including certain:

• Permanent residents
• Protected persons
• Eligible work permit holders
• Confirmed BC Provincial Nominees
• Other exemptions provided under federal and provincial legislation

Because these rules can be complex—and they continue to evolve—it's important to obtain legal advice before removing subjects or completing a purchase.

---

Why This Matters in Victoria, BC

Victoria continues to attract newcomers from around the world. It is increasingly common for one spouse to be Canadian while the other is:

• Waiting for permanent residency;
• Working in Canada on a permit;
• Recently relocated from another country; or
• Living abroad while planning a move.

A misunderstanding about eligibility or taxation can significantly affect affordability and financing.

Knowing the rules before writing an offer can help avoid unexpected costs and last-minute complications.

---

My Advice as a Victoria Realtor

Whenever I work with buyers, one of my first questions is about residency and citizenship status—not because I'm being intrusive, but because it can have a major impact on the purchase.

If there is any uncertainty, I recommend involving your real estate lawyer or notary early in the process. Spending a few minutes confirming eligibility before making an offer can save thousands of dollars later.

Every buyer's situation is unique, and having the right professionals involved from the beginning helps ensure there are no costly surprises on possession day.

---

Thinking About Buying in Victoria?

Whether you're a first-time buyer, relocating to Canada, or purchasing with a spouse from another country, I'm happy to help you understand the process before you start shopping.

A little planning today can prevent expensive surprises tomorrow.

Dawn Stokkeland
REALTOR® | eXp Realty
Serving Victoria, Saanich, Langford, Sidney, Oak Bay and surrounding communities
🌐 www.homesbydawn.ca