John Yun (604) 500-4339 | David Seo (306)730-9871

News/Article

TitleSpeculation and vacancy tax increases; strata rental restrictions confirmed2020-01-18 10:43:54
Writer Level 10

Speculation and vacancy tax increases; strata rental restrictions confirmed

RE news slide 8

The BC speculation and vacancy tax (SVT) tax rate for foreign owners and satellite families will rise to two per cent on December 31, 2019, up from 0.5 per cent.

The tax remains at 0.5 per cent for British Columbians and other Canadian citizens or permanent residents who are not members of a satellite family.

New exemptions

There are new, retroactive exemptions for:

  • Canadian Armed Forces members and spouses while in active service; and
  • home owners whose property can only be accessed by water.

Temporary exemptions – timeline for phase outs

Rental restricted stratas

The exemption for rental restricted stratas has been extended to December 31, 2021. The exemption was to expire this year.

However, new owners and owners subject to rental restrictions passed after October 16, 2018 don’t qualify for the exemption. Stratas with existing rental restriction passed before October 16, 2018 qualify for the SVT exemption.

If the strata remains unoccupied, even where the building’s bylaws prohibit rentals, the province will levy the tax.

Strata accommodation properties

The exemption for strata accommodation properties (hotels) will end December 31, 2021.

Vacant land

The exemption for vacant land ended December 31, 2019.

Clarifications

The speculation and vacancy tax website has been updated to clarify:

  • spouses declare as individuals not as a partnership;
  • exemptions, including the secondary residence exemptions, previous residence exemption, and “away from home for any other reasons”;
  • how the once in 10-year exemption applies in the “away from home for other reasons principal residence exemption”; and
  • details about the exemption for spouses who are separated or divorced.

The SVT applies to Metro Vancouver (excluding Bowen Island, Lions Bay, and Electoral Area A), Abbotsford, Chilliwack, Mission, Greater Victoria, Nanaimo, Lantzville, Kelowna, and West Kelowna.

The government advises that the $115 million in revenue forecast to be raised will be used to fund affordable housing projects in areas where the tax applies. Data from the first year indicates that 90 per cent of the revenue came from foreign owners, satellite families and Canadians living outside of BC.

Tax avoidance

To prevent tax avoidance, the Ministry of Finance is increasing the identification and information required of corporations, trusts and partnerships, and foreign owners.

Note: In Vancouver, the provincial SVT must be paid as well as the city’s empty homes tax.