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Haven't filed your tax return? Expect to be hit by B.C.'s speculation tax

Burnaby homeowner billed $27,000 in provincial speculation tax because she hadn’t yet filed tax return
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Helen Ward shows off some of the paperwork after she was billed $27,000 in speculation tax by the B.C. government because she had yet to file her income tax return. ARLEN REDEKOP, PNG

VANCOUVER — Helen Ward was shocked to open a letter from the provincial government demanding $27,455 for the new speculation and vacancy tax even though she lives in her Burnaby home year round and is exempt from paying it.

“It’s very stressful to get a bill for $27,000 from the government in the mail,” she said. “If someone gets a bill for $27,000, it will up your heart rate a bit.

“I’ve lived here since 2001 and I’ve almost always had people living with me,” said the single mom. “I’m doing what they want people to do, have people living in homes.”

The tax was introduced in 2018 by the NDP government to discourage speculation and vacant homes. It also targeted foreign owners and satellite families who have Canadian citizenship but earn their incomes outside Canada.

The tax applies to owners of empty homes in the Metro Vancouver, Victoria, Nanaimo and Kelowna metropolitan areas. Next year, it will also apply to North Cowichan, Duncan, Ladysmith and Lake Cowichan on Vancouver Island and to Lions Bay and Squamish.

When Ward made her declaration, by phone, before the March 31 deadline, the employee asked her if she had filed her 2020 taxes.

Ward said she hadn’t and said the agent told her, “Oh, you’re not going to be exempt.”

Ward said she intended to file and asked to change her answer but was told it was too late.

She sent in her 2020 return soon after that call. But she still received the tax bill and a second letter saying the bill was due and payable.

“I sent (Finance Minister Selina Robinson) an email on June 2, asking for an apology and for them to cease and desist” what she called harassment.

Despite the letter, a third letter arrived this week, this time demanding a late payment fee of $101.14, for a total of $27,556.14.

Ward also questioned Robinson why a provincial tax collector during the declaration call asked about her federal taxes.

“Income tax returns have no relationship to this tax,” she said. “Why are these two sets of data regarding personal private information being linked?”

The province uses income tax records to determine citizenship and exemption eligibility, a Finance Ministry official said in an email.

“They must be a Canadian citizen or permanent resident of Canada who’s a B.C. resident for income tax purposes,” she said.

She said the ministry won’t comment on specific cases but said, “Generally speaking in cases like this, once a homeowner files their income tax, they can amend their declaration” online or by phone.

The ministry said it’s up to the homeowner to update the declaration because the Canada Revenue Agency doesn’t notify B.C. Finance Ministry when a homeowner has filed their income taxes.

Homeowners have up to three years to declare or amend their declaration.

Ward on Thursday spoke with a ministry employee who reviewed her file and granted the exemption, wiping out her tax bill.

The ministry keeps the tax information only “for the purposes of administering the tax.” It doesn’t track the number of people who are not exempt because of non-filing of taxes, said the spokeswoman.

“These individuals would be part of the number of people liable for the tax each year,” she said.

In 2020, 8,180 homeowners in B.C. were not exempt. That was up from 7,361 non-exempt homeowners in 2019.

Those figures could change as a result of homeowners amending their declarations, she said.