Starting next week, homeowners in B.C. will receive “declaration” packages and a prompt to claim an exemption from the speculation and vacancy tax.
Homeowners in areas where the tax applies — Greater Victoria, Nanaimo, Lantzville, Metro Vancouver, the Fraser Valley, Kelowna and West Kelowna — will have until March 31 to claim their exemption.
“Based on the first successful year of the speculation and vacancy tax, we expect more than 99% of British Columbians to be exempt from the tax, while speculators, foreign owners and people who leave their home vacant will continue to pay as intended,” said Minister of Finance Carole James.
The ministry estimates 32,000 people, about 1% of homeowners, will have to pay the tax, which targets properties left vacant for months at a time.
Through the tax, the province collected $115 million in the 2018-19 fiscal year that ended March 31, 2019. The ministry forecasts revenue of $185 million in 2019-20 and $185 million in 2020-21 as the tax rate on foreign owners and satellite families — where the majority of their worldwide income is not declared on a Canadian tax return — increased to 2% from 0.5% in 2019.
The rate remained at 0.5% for Canadian citizens or permanent residents who are not members of a satellite family.
The package homeowners will receive starting next week will include an informational brochure and letter, along with the suggestion that the quickest way to fill it out is at gov.bc.ca/spectax.
All owners on title of a property must complete the declaration in order to claim an exemption or to determine eligibility for a tax credit.
If owners are not exempt, they must pay the assessed amount by July 2.
The tax was introduced in the February 2018 budget with the hope it would reduce the number of empty homes and help deal with B.C.’s shortage of affordable housing by encouraging owners of vacant units to put them into the rental market or sell them.
“Some would have us give tax breaks to speculators and return to out-of-control housing price increases, but we’re committed to cracking down on speculation and increasing affordable housing options,” James said. “We’re beginning to see moderation in the housing market, and over the past year we’ve seen more rental condos being put on the market and an increase in purpose-built rentals. These are encouraging signs for making housing more affordable for families in B.C.”
Owners are exempt from the tax if it is their principal residence, they rent it at least six months of the year, they are disabled, the property was just inherited, it's valued at less than $150,000, or a person was away and it was vacant due to medical reasons, residential care, work or spousal separation.
This year military families and those with water-access-only properties will also be exempt.