Don’t Pay the BC Speculation and Vacancy Tax if it Doesn’t Apply to You
If you own property in the taxable regions in B.C. then you are required to apply for a tax exemption to the BC Speculation and Vacancy Tax by March 31, 2019. You must do this every year you own property – the speculation tax is based on ownership as of December 31 each year.
Why the tax?
The speculation and vacancy tax is one of the key measures the provincial government introduced to tackle the housing crisis in major urban centres in British Columbia.
Who does the tax target?
Foreign and domestic speculators who own residences in B.C. but don’t pay taxes here. The tax rate is 0.5 per cent of a home’s assessed value for all properties subject to the tax in 2018. Starting in 2019, the rate rises to two percent for foreigners and satellite families (households where more than 50 per cent of income comes from outside Canada). The rate remains at 0.5 per cent for Canadian citizens and permanent residents of Canada who are not members of a satellite family.
Who are Exempt?
Owners are exempt if it’s their principal residence, they rent it at least six months of the year (only three months is required in 2018), they are disabled, the property was just inherited, it’s valued under $150,000, or a person was away and it was vacant due to medical reasons, residential care, work or spousal separation.
Condos and apartments in buildings where stratas ban rentals are also exempt, but only for 2018 and 2019.
Exemptions are available for First Nations, local governments, charities, co-ops, some not-for-profit organizations, and developers working on construction or renovation of property.
How to Apply for an Exemption
You must register your property by March 31, 2019, either by phone or online at www.gov.bc.ca/spectax. The information you’ll need to register your property declaration will be mailed by mid-February to all owners of residential property within the taxable regions.
Please note that if your property has more than one owner, even if the other owner is your spouse, a separate declaration must be made for each owner.
If you have NOT received a declaration letter by late-February contact the Speculation and Vacancy Tax Call Centre at 1 (833) 554-2323.
Do I Qualify for a Tax Credit?
If you’re not eligible for an exemption, you may qualify for a tax credit.
B.C. owners are eligible for a tax credit of up to $2,000 on a secondary property. The credit is limited to $2,000 per owner and $2,000 per property (in the case of multiple owners) per year. The tax credit cannot be carried forward or transferred to a spouse.
Foreign owners and satellite families can claim a tax credit equal to 20% of their B.C. income to reduce the 2% speculation and vacancy tax owing. Unused B.C. income may be carried forward for up to two years or transferred to a spouse.
Non-B.C. resident Canadians are eligible for a tax credit based on that income claimed in B.C.
What Areas Are Included?
Municipalities within the Capital Regional District, EXCLUDING Salt Spring Island, Juan de Fuca Electoral Area and the Southern Gulf Islands.
Municipalities within the Metro Vancouver Regional District, EXCLUDING Bowen Island, the Village of Lions Bay and Electoral Area A, but INCLUDING the University of British Columbia and the University Endowment Lands, City of Abbotsford, District of Mission, City of Chilliwack, City of Kelowna, City of West Kelowna, City of Nanaimo, and District of Lantzville.
For more information on the speculation and vacancy tax, visit: http://www.gov.bc.ca/spectax
What is the Tax Rate?
Properties owned on December 31, 2019 will be taxed at 0.5% of the July 1, 2018 assessed value. If you own secondary properties you are eligible for a tax credit of up to $2000.
Have more questions?
Abbas Afkhami
(604) 715-9033
info@expressmtg.ca