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Everything You Need To Know About The 2018 Speculation And Vacancy Tax

The implementation of the NDP government’s speculation and vacancy tax (SVT) will require all homeowners within the areas subject to the tax to declare and register an exemption, the province has announced.


Homeowners in the following areas will be required to submit a declaration confirming their home is a primary residence and that any secondary homes or vacation properties within the coverage areas are rented at least six months of the year. Failing to declare the status of each property by the end of March will yield a levy under the new tax regime regardless of the home’s usage or status.


- Metro Vancouver Regional District, excluding Bowen Island, the Village of Lions Bay, Electoral Area A

- Abbotsford

- Mission

- Chilliwack

- Kelowna

- West Kelowna

- Nanaimo

- Lantzville



The province confirms letters should begin to arrive within the SVT coverage areas by January 18th through February 28th. The estimated time to complete a declaration will range from 10 to 20 minutes.


Properties not declared by March 31, 2019, or which qualify for the tax, will receive a special tax notice of assessment payable by July 2, 2019.


The new tax, as it pertains to real-estate owned by Canadians who do not reside in British Columbia full-time and who do not rent their home, will be levied to the tune of 0.5% of the home’s assessed value starting in 2018 and each year thereafter. Foreign owners and their satellite families will be assessed at a rate of 0.5% in 2018 and 2% each year thereafter.


Vacation properties are described as residences used sporadically by non-resident owners, or are not otherwise considered a full-time residence. If a property is occupied by a renter the speculation tax will not apply. If the owner pays taxes in British Columbia, the tax will also not apply. Exemptions include:


- The property is your principal residence

- The property is occupied by a tenant for at least 6 months of the year (3 months in 2018)

- The property is under construction or undergoing extensive renovations

- The residence is uninhabitable

- The property was bought or inherited in the taxable year

- You and your partner have separated during the taxable year

- You have been out of your home for medical treatment during the taxable year

- The property has rental restrictions (only valid in 2018 & 2019 years)

- The property includes a licensed child daycare

- There is no residence on the property

  

At 0.5%, costs to homeowners will amount to $2,500 in 2018 for a home valued at $500,000 and $10,000 in 2019. The new tax and will be levied in addition to property taxes.


The NDP rolled out the SVT in early 2018 as a means of turning empty homes into housing for British Columbians and raising revenues to build affordable housing. The tax will also generate revenues from foreigners who do not pay provincial income taxes.


Still not quite sure about what this means? Reach out to us today and we'll walk you through it

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