What are the primary drivers of implementing this tax?
This tax was created in response to the housing crisis in major urban areas, throughout Greater Vancouver. By putting this program into action, the province hopes to:
- Target foreign and domestic buyers who own property in BC, but don't pay tax here
- Turn empty homes into housing (more explanation below on how renting your property can help make you exempt from this tax)
- Raise revenue to support BC’s 3 year action plan, for more affordable housing
Does everyone need to make a declaration?
If you own a residential property, within a designated BC region, you must make a declaration. After you file your declaration, you will be considered exempt if:
- The property is your primary residence
- You rented out your property for 3 or more months in 2018 (this will advance to 6 months for 2019)
- You have a documented disability
- Residence is uninhabitable
- You recently inherited the property
- The property was left vacant due to a medical emergency or recent death of the owner
- There are a few additional extenuating circumstances which may make you exempt from the tax. The full list can be found here (but remember, you still have to file a declaration to be deemed exempt): https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax/exemptions-speculation-and-vacancy-tax/individuals
Only those who do not own a residential property are exempt from filing a declaration (ie. renters).
Who does this impact?
If your action is required, you should receive a declaration letter by mail to your registered address listing all properties you own. If you have not received a notice by mid-February, reach out at 1 833-554-2323 or email@example.com. To find out if your area is subject to the tax, check the full list of designated BC areas here:
What will this tax cost if you are not exempt?
For properties owned on December 31, 2018, the tax rate is the same for everyone: 0.5% of the assessed value of your residential property on July 1, 2018 (as determined by BC Assessment). B.C. owners are eligible for a tax credit of up to $2,000 on secondary properties to offset their tax payable. The credit is limited to $2,000 per owner and $2,000 per property (in the case of multiple owners) per year.
For 2019 and onwards, the speculation and vacancy tax rate will vary, depending on your residency and where you pay income tax:
- 2% for foreign owners and satellite families
- 0.5% for British Columbians and other Canadian citizens or permanent residents who are not members of a satellite family
What is the money collected from this tax going towards?
All revenue raised from collecting this tax will be put towards programs for affordable housing. For more information on the specifics of these programs, click below:
When is my declaration due?
The declaration deadline is March 31st 2019. You can file your declaration online or by phone. If there is shared ownership of any property, each individual owner must file their own declaration.
A few common “What If’s” . . .
What if you own a home in BC, but travel for more than 6 months at a time?
Even though you aren’t living in this home full time, the property is still your primary residence. In this case, you would be exempt from the tax for that property. If this same individual owned two homes, only the primary residence would be exempt from this tax and the second may be subject to it.
What if you tried to rent your property, but could not find a suitable tenant?
Owners would be encouraged to lower their rental price in this scenario. You are still required to pay this tax, if you did not have a tenant in the residence for at least 3 months of 2018.
What if you own a property with a friend or family member, but only one of you lives there?
For example, if you and your adult son are co-owners of a condo, but only he lives there full-time. Your son can claim the principal residence exemption and you (the parent) can claim the tenancy exemption for family or other non-arm's-length persons.