The BC government's Speculation and Vacancy Tax is finally here. This tax is part of the BC government's plan to ensure that housing is affordable for all citizens of British Columbia.
Goals of the Tax
Their main goal with this new tax is to:
- Turn empty houses into affordable housing for BC residents
- Raise revenue that will go towards creating more affordable housing
- Foreign/domestic investors who own residences in BC, but don't live in them
The government estimates that 99% or more British Columbians will be exempt from the tax; however, you must register in order to be qualified for exemption.
In mid-late February, keep an eye out for a letter from the provincial government with instructions on how to claim your exemption. The application (can be done online or through telephone) must be completed by March 31, 2019 in order to qualify for exemption. An application must be done by each owner of the house.
What Happens if You're Not Exempt?
If your home is left vacant for 6-months or longer since December 31, 2018, you will NOT be exempt from the Speculation and Vacancy Tax in 2019. You must pay the tax by July 2, 2019.
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 (BC owners are eligible for a tax credit of up to $2000 on secondary properties)
For 2019 and onwards, the tax rate will vary:
- 2% for foreign owners and satellite families (People who declare 50% or less of their income on Canadian income tax return)
- 0.5% for British Columbians and other Canadian citizens or permanent residents who are not members of a satellite family
So, don't forget to declare your exemption from the Speculation and Vacancy Tax!