BC Speculation and Vacancy Tax

BC Speculation and Vacancy Tax

If you are looking to purchase a home in British Columbia, you may have heard of the speculation and vacancy tax. This article will help you understand how the speculation and vacancy tax works, how to declare and calculate it, and what exemptions may apply.

BC introduced this assessment at the end of 2018 as a direct result of the real estate crisis. Initially, all residential property owners were subject to a 0.5% tax if they qualified and were within one of the targeted regions. 

The current speculation and vacancy rate for foreign owners and satellite families is 2% of the prior year’s property value. If you are a Canadian citizen or a permanent resident that is not a member of a satellite family, the rate drops to 0.5% 

Which Regions Do The Speculation and Vacancy Tax Apply To?

If you live in any of the following areas, the BC speculation and vacancy tax apply to you:

  • Metro Vancouver Regional District
  • Chilliwack
  • Kelowna and West Kelowna
  • Capital Region District (CRD)
  • Abbotsford
  • Nanaimo
  • Districts of Mission and Lantzville

Homeowners that live outside of these taxable regions will not be required to pay the speculation and vacancy tax. 

Who Is Eligible For An Exemption To The Speculation and Vacancy Tax?

Even if you live in one of the regions described above, you may qualify for an exemption from the speculation tax. For instance, if the home is your primary residence you will not be required to pay it. 

Other common exemptions include spouses that live apart because of work, medical reasons, or if you are separated or divorced. You may also be exempt if the home is occupied by a tenant for over six months.

Declaration Process for the BC Empty Home Tax

When you own a home in one of the designated taxable regions, you are required to file a declaration regarding your residency status each year. This form must be filled out annually because circumstances may change over time. 

The declaration is due on March 31st, and you can expect to receive your declaration letter in January or February. The letter will ask you how you used the property within the last year and includes questions about your income. 

If the tax applies, you must pay by the first business day in July. 

The empty home tax in BC applies to several regions in the province. If you own a residential property that is not your primary resident – or that remains empty – you may be required to pay the empty home tax, as well as the speculation and vacancy tax. 

Are you thinking about purchasing or selling your home in the near future? If you’re looking for a realtor to work with you and guide you through the process, then give me a call/text at 250-858-0288.. or email info@patricksellsvictoria.com to start a conversation.

Patrick Novotny eXp Realty Victoria, BC 250-858-0288