March 31 is the deadline for submitting an annual declaration to claim an exemption from the provincial government’s Speculation and Vacancy Tax
The tax will apply in these designated taxable regions in British Columbia:
- *Metro Vancouver, including the University Endowment Lands, but excluding Bowen Island and Lions Bay;
- Abbotsford, Mission, Chilliwack;
- Kelowna, West Kelowna,
- Capital Regional District,
- Nanaimo
- Lantzville
- Reserve lands, treaty lands and lands of self-governing Indigenous Nations are not part of the taxable regions.
*Metro Vancouver:
The City of Vancouver, 20 other municipalities, and hundreds of parks, attractions, festivals, and things to do make up Metro Vancouver.
The City of Vancouver, North Vancouver, West Vancouver, Burnaby, Richmond, Surrey, White Rock, and other outstanding places to live and visit are all part of Metro Vancouver.
Bowen Island, Coquitlam, Delta, Langley, Maple Ridge, Pitt Meadows, New Westminster, and Port Moody are among the other communities of special interest.
The majority of the region’s most well-known attractions are located within Metro Vancouver, but many others can be found in other parts of the Lower Mainland, such as the Sea to Sky region, Whistler, and the Fraser Valley
Tax Rate
For 2018, the tax will be 0.5 percent of a property’s assessed value in the designated taxable regions for all properties subject to the tax.
The tax will be levied at the following rates in 2019 and subsequent years:
0.5% for British Columbians and other Canadian citizens or permanent residents who are not part of a *satellite family; and 2% for foreign owners and *satellite families.
Every year on December 31, the tax will be levied.
*A satellite family is defined as a family where less than 50% of the combined household income is taxed in Canada on Canadian income tax returns of course.
Declarations
To claim exemptions, residential property owners in the designated taxable regions will have to fill out an annual declaration. If a home has multiple owners, each must submit a declaration by March 31.
Normally an information sheet as to how to complete this delegation will be mailed to property owners within the above taxable regions.
Exemptions on Speculation and Vacancy Tax in BC
- Principal residence exemptions
- Rental Property Exemption
- Exemption for hazardous or damaged property
- Medical Exemption for the second home
- Year of Acquisition Exemption
- Spousal separation exemption
- Bankruptcy exemption
- Exemption upon Death
- Exemption for testamentary trust for minors
- Exemption for properties with rental restriction If the rental restriction was in place on or before October 16, 2018, all owners of a property where a covenant or strata bylaw prevents the property from being rented out in a manner that would allow a rental exemption are exempt for the 2018 and 2019 tax years.
- Exemption for strata accommodation unit
- Licensed daycare exemption
- Vacant land exemption
- For the 2018 tax year, there will be no speculation or vacancy tax on land that does not contain any residential property.
Other exempt properties and entities
- Property owned by registered charities;
- Property owned by co-operatives;
- Property owned by not-for-profit corporations using the property for specific purposes;
- Property owned by municipalities;
- Property owned by Indigenous Nations, or held in trust for an indigenous Nation;
- Property owned by governments and related entities;
- Property owned by regional districts;
- Property owned by similar bodies as defined in legislation; and
- Property with an assessed value under $150,000.
Exemptions for land under development
- Applying for a loan
- Obtaining a permit or other required approval, which may include community consultations
- Contracting for design, construction, or engineering
- Demolition or removal of existing improvements
- Clearing the area or excavating it
- Constructing or building a home on the property, or substantially renovating an existing home
The following exemptions are available to eligible landowners who are developing their property:
- House that can not be occupied (unoccupiable)
Owners are exempt if a residence on the property cannot be occupied for 90 days in a calendar year due to construction or renovation OR if there is no residence on the property due to the stage of construction activity, if reasonable steps are taken to develop or renovate the property without undue delay.
- Heritage property preservation
If a residence in a heritage property is unoccupied for 90 days in a calendar year due to the owner’s conservation of the heritage property, the owner is exempt if reasonable steps are taken to complete the conservation renovations without undue delay.
- Residential developments in stages
Where specific multi-unit residential developments are being built in phases on two or more residential properties, owners are exempt if reasonable steps are taken to develop or renovate the property without undue delay. The exemption does not apply if any of the properties’ residences could have been used as a home for more than 180 days in a year.
- New inventory that is vacant.
If the owner is a developer of five or more residences, and at least one newly-built or newly-placed residence in the development has been offered for sale to the public this year but has not been occupied as a home, the owner is exempt.
Exemptions for Corporations, Trustees and Partners
Tax credits
Tax credits include:
- a tax credit of $2,000 for British Columbians who own secondary properties; and
- tax credits for other Canadians and foreign owners.
Revenues
- All revenues will be directed to affordable housing projects in the impacted regions.
Amendments expected
- Amendments to the legislation from the Green party are expected.
This is only a summary of the Vacancy and Speculation tax in British Columbia…
We are not tax advisors
Kindly work with your tax advisor and lawyer to find out all the ins and out of these taxes that may or may not apply to your specific situation.
We can guide you but not in any position to provide any tax advice
The purpose of this article is to make you aware of these taxes only