The BC government introduced an exemption today for businesses charged a speculation and vacancy tax for the air space above their leased spaces.
The exemption is meant to provide relief to commercial tenants with landlords that have added the cost of the speculation and vacancy tax into their triple-net leases. Leases where properties based on the “highest and best use,” meaning a single-storey commercial building can be assessed as if there were a multi-residential tower on the site.
This can be the result of rezoning or changes to an official community plan, which leads to an unexpected spike in value, potentially increasing the property tax burden.
“We don’t believe that tenants should have these costs passed on to them by landlords,” said Finance Minister Selina Robinson about the exemption on Thursday. “We will temporarily remove the speculation and vacancy tax liability for 2020 for property owners that meet certain conditions.”
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Robinson said both property owners and tenants can now apply for the remission “to ensure the people we are trying to help, the tenants, don’t have to wait for the owner to apply.”
The purpose of the speculation and vacancy tax “is to bring much-needed residential housing supply to the market. We encourage property owners who have reclassified their properties with unbuilt air space as ‘residential’ to continue in the development process to deliver needed housing supply in dense, urban areas.”