By Tia Walsh.
In October, the B.C. government introduced legislation for the B.C. speculation and vacancy tax, moving forward part of its 30-Point Plan to address the housing affordability crisis.
Owners of residential properties that remain vacant or unrented for more than six months of the year will be subject to the speculation tax.
The tax will apply to residential homes in Metro Vancouver (excluding Bowen Island and Electoral Area A, except the part of the electoral area that is the UBC and University Endowment Lands), the Capital Regional District (excluding the Gulf Islands and Strait of Juan de Fuca), Nanaimo-Lantzville (excluding Protection Island), Kelowna, Kelowna-West, Nanaimo, Abbotsford, Chilliwack and Mission.
The rate varies depending on the owner’s tax residency and whether the owner is a Canadian citizen or permanent resident, or a member of a satellite family.
|
B.C. SPECULATION TAX |
||
| 2018 |
2019 AND SUBSEQUENT YEARS |
|
|
BC residents and |
0.5% |
0.5% |
| Other Canadian residents | 0.5% | 0.5% |
| Foreign owners and satellite families | 0.5% | 2.0% |
There are a number of exemptions and exclusions available for B.C. homeowners and for special circumstances.
Those who are not eligible for an exemption may qualify for a tax credit.
B.C. homeowners are eligible for a tax credit of up to $2,000 on a secondary property. This exempts an owner on an otherwise taxable home assessed at up to $400,000. The tax credit cannot be carried forward and is not transferrable to a spouse.
Foreign owners and satellite families can claim a tax credit equal to 20% of their income earned in B.C. The tax credit cannot reduce the tax rate below 0.5% or the rate for an equivalent B.C. resident. Unused B.C. income may be carried forward for up to two years or transferred to a spouse.
Other Canadians will be eligible for a tax credit based on that income claimed in B.C. Similar to foreign owners and satellite families, the tax credit cannot reduce the tax below the tax rate for an equivalent B.C. resident. Unused tax credits may be carried forward up to two years or transferred to a spouse.
More information about the speculation and vacancy tax and how to claim relevant exemptions can be found at https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax.
If you have any questions or the Walsh King team can assist you, please contact us.
Posted in Tax Tips for 2018 Tax Year + Walsh King News
