We've heard a lot about the Speculation Tax coming to parts of British Columbia, without know exactly what it is going to look like.
This week the BC Government finally tabled the new Tax, which has yet to be voted on.
The BC areas affected are -:
- municipalities within the Capital Regional District
- municipalities within the Metro Vancouver Regional District, excluding Bowen Island, the Village of Lions Bay and Electoral area A, but including UBC and the University Endowment Lands
- the City of Abbotsford
- the District of Mission
- the City of Chilliwack
- the City of Kelowna and the City of West Kelowna
- the City of Nanaimo and the District of Lantzville
All residential property owners in the designated taxable regions will have to complete an annual declaration to claim any relevant exemptions. Where there are multiple owners of a home, a declaration must be completed for each owner.
Further information on how to declare will be mailed to all owners of residential property within the taxable regions by mid-February.
For 2018, the tax will be levied at:
0.5% of the property’s assessed value for all properties subject to the tax
For 2019 and subsequent years, the tax will be levied at:
2% for foreign owners and satellite families.
0.5% for British Columbians and other Canadian citizens or permanent residents who are not members of a satellite family.
The tax will be levied on owners who own the property on December 31 of each taxation year.
There are a variety of Exemptions.
Exemptions for Individuals
- Principal residence exemptions
- Rental exemptions
- Exemption for hazardous or damaged property
- Medical exemption for second home
- Year of acquisition exemption
- Spousal separation exemption
- Bankruptcy exemption
- Exemption upon death
- Exemption for testamentary trusts for minors
- Exemption for properties with rental restrictions
- Exemption for strata accommodation unit
- Licensed daycare exemption
- Vacant land exemption
- Other exempt properties and entities
Rental exemptions are available for homes occupied by tenants. To qualify for an exemption, the home must be occupied for at least six months of the year in increments of one month or longer. For 2018, tenants need to occupy for only three months in increments of one month or longer for the owner to qualify for this exemption.
Only one residence must be rented for the property to be exempt.
- Arm’s-length rentals – All owners will be eligible for a rental exemption in respect of an arms-length tenant, so long as there is a written tenancy agreement in place under the Residential Tenancy Act and the tenant resides at the property.
- An arm’s-length tenant is a business-only relationship: anyone other than a non arms-length tenant.
- Non-arm’s-length rental exemption – Owners who are Canadian citizens or permanent residents of Canada, but not satellite families, will also be eligible for the rental exemption in respect of non arms-length tenant so long as the residence is the tenant’s principal residence. Non-Canadians may be able to claim an exemption in respect of a non arms- length tenant in very limited circumstances.