Commercial property: what changes when you buy or sell one in BC

GST and property transfer tax

The sale of commercial real property is generally subject to 5% GST in BC. If the buyer is registered for GST, the seller does not collect it and the buyer accounts for it; a buyer using the property mainly in its own commercial activities reports it on its regular return. Whether and when to register is a question for your accountant before you write the offer.

Property transfer tax is charged on fair market value at registration: 1% on the first $200,000, 2% up to $2 million and 3% above that. The further 2% over $3 million, and the 20% additional tax on foreign buyers in Metro Vancouver and four other regional districts, apply only to the residential portion; on a mixed-use building, only the part that is residential.

BC's home flipping tax does not apply to the commercial portion of a property.

Zoning and permitted use: confirm before you remove conditions

What a building can be used for is set by the local government's zoning bylaw: in Vancouver, the Zoning and Development By-law under the Vancouver Charter; elsewhere, the municipality or regional district. A listing's description is not a zoning confirmation. Before removing conditions, confirm with the city that your use — a restaurant, a clinic, a warehouse, a daycare — is permitted in that zone and in that unit.

Property tax follows how BC Assessment classifies the property: offices, retail, warehousing and hotels generally fall in Class 6 (business and other), light industry in Class 5, and a property with several distinct uses can fall into more than one class. Anyone can look up an assessment for free.

Environment: the site disclosure statement and a Phase I

If the property has been used for one of the industrial or commercial uses listed in Schedule 2 of BC's Contaminated Sites Regulation, the seller must give a prospective buyer a site disclosure statement. For a sale it is not filed with the ministry; it goes to the buyer.

Buyers, and often lenders, also ask for a Phase I environmental site assessment: a review of the property's history and a site visit, without sampling. If it flags something, a Phase II with sampling follows. On industrial properties this step is rarely skipped; my office and industrial mortgage page explains why.

The leases come with the building

When you buy a tenanted building you take over its leases. During the condition period, review every lease and amendment, a rent roll certified by the seller, and the security deposits. Before completion, ask for estoppel certificates, in which each tenant confirms the rent, the term and that there are no disputes. Lenders rely on the same documents.

For a seller, having the leases, the rent roll and a year of operating expenses ready before listing means the buyer's condition period is spent on the building, not on waiting for paperwork.

PST on commercial real estate commissions: planned for October 1, 2026, now paused

The province had planned to apply 7% PST to real estate services for non-residential property, including commissions on the sale or lease of commercial property, from October 1, 2026. On September 18, 2026 it announced that this expansion is paused, and no new date has been posted. GST at 5% still applies to the commission.

Commercial leasing

I also handle commercial leasing: finding space for a business, and finding tenants for an owner. My licence covers leasing as a trading service; it does not cover property management. Collecting rent and managing a building for an owner needs a separate licence, which I do not hold.

For a tenant, the lease is often a bigger commitment than a purchase: the term, renewal options, the permitted use, who pays property tax and operating costs, and whether you can assign the lease when you sell your business. Those are the terms I negotiate first.

How I work on a commercial deal

Buying: use and zoning first; then the financing, where lenders look at the property's income as well as yours and usually want a larger down payment (details on my commercial mortgage page); then the conditions: environment, leases, estoppel certificates and the building itself.

Selling: before listing, we assemble what buyers will ask for — leases, rent roll, operating expenses, and the site disclosure statement if it applies.

If I act on both the property and the financing, I tell you in writing, before you sign anything, which role I am in and how I am paid in each.

Common questions

Do you pay GST when buying commercial property in BC?

Generally yes, at 5%. If the buyer is registered for GST, the seller does not collect it and the buyer accounts for it; otherwise the seller collects it. Confirm the treatment with your accountant before writing the offer.

Is property transfer tax charged on commercial property?

Yes: 1% on the first $200,000, 2% up to $2 million and 3% above that. The further 2% over $3 million and the 20% foreign buyer tax apply only to the residential portion of a property.

What is a site disclosure statement?

A form the seller must give a prospective buyer when the property has been used for one of the industrial or commercial uses listed in Schedule 2 of BC's Contaminated Sites Regulation. It lists those past uses, so the buyer can decide on environmental testing.

Does the foreign buyer ban apply to commercial property?

The federal ban covers residential property, such as a building with up to three dwelling units or a condo unit. A building used only for business is outside that definition. For a mixed-use building, get legal advice before you offer.

Is there PST on a REALTOR®'s commission for commercial property?

Not at present. The province had planned 7% PST on commissions for the sale or lease of non-residential property from October 1, 2026, but announced on September 18 that it is paused, with no new date posted. GST at 5% still applies to the commission.

Can you help me find space to lease for my business?

Yes. I help businesses find space and owners find tenants. I do not do property management, such as collecting rent or managing buildings; that needs a separate licence.