Kelowna Real Estate Market News

Speculation Tax in BC - What we know so far October 2018

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 -:

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

  1. Principal residence exemptions
  2. Rental exemptions
  3. Exemption for hazardous or damaged property
  4. Medical exemption for second home
  5. Year of acquisition exemption
  6. Spousal separation exemption
  7. Bankruptcy exemption
  8. Exemption upon death
  9. Exemption for testamentary trusts for minors
  10. Exemption for properties with rental restrictions
  11. Exemption for strata accommodation unit
  12. Licensed daycare exemption
  13. Vacant land exemption
  14. Other exempt properties and entities
Probably one of the most used exemptions will be the Rental Exemption.

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. 

For a detailed breakdown of all of the other exemptions please visit -:

For the full details of the tax please go to -:

Kind Regards

Trish Cenci

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