British Columbia imposes a Property Transfer Tax (‘PTT’) on the purchaser of real property situated in the province. The PTT becomes payable upon application for registration of a taxable transaction at a land title office. The PTT is computed at the rate of 1% of the first $200,000 CDN of the fair market value of the transferred property and 2% of the remaining fair market value. The acquisition of ‘real property’ in British Columbia may also be subject to the 13% Harmonized Sales Tax (‘HST’). ‘Real property’, generally, includes land, any permanent structures thereon, a mobile home (but not including travel trailers, motor homes, camping trailers, or other recreational vehicles), and floating homes. Generally, used residential units are exempt from the HST. Vacant land will generally be subject to HST regardless of the intended use of the land by the purchaser. US residents will be subject to Canadian income tax on any capital gains realized on the eventual disposition of the property. A purchaser of Canadian real estate should keep appropriate documentation to support the tax cost (adjusted cost base, or ‘ACB’) of the property for use in computing any capital gain or loss on the eventual disposition of the property. Any PTT or HST payable in respect of the acquisition will form part of the ACB of the property to the purchaser, as will as any legal expenses and/or commissions paid in respect of the acquisition. It should be noted that, when the vendor of the property is another non-resident of Canada, the purchaser, regardless of his residence, must ensure that specific withholding and compliance requirements are adhered to in order to prevent the purchaser from becoming liable for the vendor’s Canadian tax liability in respect of the sale of the property to the purchaser. This is discussed in greater detail below.