Nearly all declarations from BC’s new speculation and vacancy tax (SVT) are now complete, and based on declarations received so far, more than 99% of British Columbians will not pay the speculation and vacancy tax.
- BC government unveils major changes to new Speculation Tax on housing
- Luxury home sales in Vancouver plummeted in 2018: report
- Landmark 14-storey rental tower proposed for corner of Alma and West Broadway
Rather, it’s foreign owners, satellite families, and Canadians living outside of BC who make up more than 80% of those paying the tax, according to the BC government.
“The tax is capturing speculators who own homes in BC but do not pay tax here,” the province said.
All owners on a property title – including spouses, family members, or individuals who own part of an estate property – must complete separate declarations.
Owners who do not complete a declaration will receive a tax notice of assessment before the end of May, reminding them of their requirement to complete a declaration.
A declaration must be completed to claim an exemption or to determine eligibility for a tax credit. If owners are not exempt, they must pay their assessed amount by July 2, 2019.
There is still time for owners to complete their declaration and claim an exemption without penalty and the easiest and quickest way to do this is online.
Each application is anticipated to take up to 20 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.
Homes are officially “vacant” if left unoccupied for six months or more within a calendar year.
The SVT is intended to target speculators — particularly foreign ownership — and empty homes in a bid to help make housing more affordable in BC. Revenue raised from the SVT will go towards supporting affordable housing initiatives in communities where the tax applies.
The areas subject to the SVT include municipalities within Metro Vancouver (including UBC and the University Endowment Lands), Abbotsford, Mission, Chilliwack, Kelowna, West Kelowna, Nanaimo, Lantzville, and Greater Victoria.
In March 2018, the provincial government announced a modified rate structure for the SVT, which is based on the value of a residential property:
- 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%.
- 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.
British Columbians with a second home valued up to $400,000 are 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 also apply for 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 is one of the BC NDP’s most significant housing policy measures, and it is expected to generate $200 million in new revenue for the provincial government for the 2019-20 fiscal year.