BC’s Speculation and Vacancy Tax
In February, the provincial government will be mailing out information regarding BC’s new Speculation and Vacancy Tax. The tax applies to the City of Nanaimo and District of Lantzville as well as other areas across the province including Victoria, Metro Vancouver, the Fraser Valley and Kelowna.
Home owners must complete a declaration and claim any exemption by March 31, 2019. It is important to note that the tax is based on the 2018 calendar year, so the registered owner(s) as of December 31, 2018 must be the ones completing the declaration. All registered owners of the property must complete a declaration.
While the government is mailing 1.6 million letters, it is estimated that the tax will only apply to approximately 32,000 properties. Exemptions include principal residences and tenant occupied properties. Vacant lots are exempt for the 2018 tax year only.
Exemptions are based on how each person uses each residential property. If you’re the co-owner of a residential property in a taxable region and are exempt, but the other owner isn’t exempt, the other owner will have to pay tax based on their percentage ownership of the residential property as listed with the Land Title Office. More about exemptions
The tax rate for 2018 will be 0.5% of the property’s assessed value. For 2019, the tax rate will be 2% for foreign owners and satellite families and 0.5% for Canadian citizens or permanent residents of Canada who are not members of a satellite family.
Be sure to file your declaration for all properties you own within the applicable municipalities and claim any exemptions that apply.
If you are unsure if you qualify for an exemption, it is best to discuss with your accountant.