You may have already received some important mail from the BC Government regarding the Speculation and Vacancy Tax. If not, it will be arriving soon. For all homeowners in the taxable regions, there is some important information you need to know.
What is it?
The Speculation and Vacancy Tax is a new annual tax that affects people who own homes, but do not use it as their principal residence or do not rent it to tenants. In short, it was created to discourage foreign buyers from purchasing properties as an investment but leaving them vacant and uninhabited.
What do you need to know?
In order to be exempt from this tax, you must register with the BC government in order to prove that you are living in your home or renting it out to a tenant. Otherwise, you may be taxed at 0.5% of your property’s assessed value.
What do you need to do?
The BC government has made it fairly simple to register, and has provided information by mail on how to do so. You will need the declaration code and Letter ID they provide for you, as well as the property address and your SIN (Social Insurance Number). You can register online or by phone, and this information is also provided in the letter sent to all homeowners.
*Important Note: ALL owners of the property must register separately. One homeowner cannot simply register the property on behalf of multiple owners. (Ex. a husband and wife owning a home, must BOTH register the same property separately. They will both receive a separate letter in the mail).
Important Deadlines
Your property must be register by March 31, 2019.
If you do need to pay the speculation and vacancy tax (or if you do not comply with registering your property), this payment will be due by July 2, 2019.
In the News:
Some interesting information and opinions have been circulating since this new tax law was announced. Some notable sources have shared:
- Because the tax is retroactive, the first letters will actually be for taxes incurred in the 2018 calendar year — before the tax rules were even finalized.
- The province claims more than 99 per cent of B.C. homeowners will be exempt from paying, but they must declare their exemption every year.
- Starting next year, the rate will vary depending on an owner’s tax residency and citizenship.
- Many residents with vacation properties, such as lake cottages or cabins are really feeling the negative impacts of this tax and may lose these family properties as a result.
As always, if you have any questions about this tax or any other tax for that matter, please contact our office (604-985-0123) for more information. We are happy to discuss any provincial, federal or CRA related tax matter and guide you through the information & how it may impact you or your business.
Sources:
BC Government website:
Vancouver Sun, Rob Shaw: https://vancouversun.com/news/politics/b-c-government-opens-exemption-process-for-speculation-tax