Residential property owners across BC have just two more weeks to submit their declarations for the speculation and vacancy tax (SVT) to the provincial government.
The new tax measure is being introduced this year in an attempt to curb some of the symptoms of the housing crisis in the urban regions of BC. Declarations for exemptions must be completed before the March 31, 2019 deadline, and can be performed online.
Each online application is anticipated to take a few minutes to complete on average. A separate declaration must be made by each owner of the property, even if the other owner is a spouse.
Those requiring assistance can also complete their declaration over the phone.
According to the provincial government, all residential property owners should have received a declaration letter with unique declaration and identification codes and clear instructions by the end of February.
As of today, over 80% of declarations have been completed and of those, more than 90% were completed online.
Homes are officially “vacant” if left unoccupied for six months or more within a calendar year. It is estimated that over 99% of property owners will qualify to be exempt from the SVT, but all homeowners must register to claim their exemption.
The areas subject to the SVT include municipalities and jurisdictions within Metro Vancouver (including UBC and the University Endowment Lands), Abbotsford, Mission, Chilliwack, Kelowna, West Kelowna, Nanaimo, Lantzville, and Greater Victoria.
British Columbians who own vacant homes in designated urban centres will be taxed at a rate of 0.5% on the property value.
Canadian citizens and permanent residents who do not reside in BC will pay 0.5%, while foreign investors and satellite families will pay 2%.
Some exemptions are available for landlords and those who own a secondary home such as vacation homes and cabins. Secondary properties utilized as long-term rentals – homes that are rented out for at least six months of the year for at least 30 days at a time – will be exempt from the SVT.
Those who have homes governed by strata policies that forbid rentals will initially be exempt from the SVT.
British Columbians with a second home valued up to $400,000 will be exempt from the tax through a non-refundable $2,000 tax credit that is immediately applied on the speculation tax. It will offset the tax payable for the home.
Exemptions will also apply in some special circumstances, such as a senior citizen who is entering a long-term care facility and the property of a deceased family member that is going through the probate process.
The SVT should not be confused for the City of Vancouver’s Empty Homes Tax, which had a 2019 submission deadline of February 4.