The Ministry of Finance said letters outlining the first year of speculation tax fees and exemption processes will begin showing up in the mail at all homes in Greater Victoria, Nanaimo, Kelowna and Metro Vancouver (excluding Bowen Island and Lions Bay, but including Abbotsford, Mission and Chilliwack) starting this week. Make sure to complete this declaration by following the letter instructions before March 31st, 2019.
The tax rate is 0.5% of a subject property’s assessed value in 2018, which would be $10,000 a year for a property assessed at $2 million. Starting in 2019, the rate changes to 2% for out-of-province owners, foreigners owners and satellite families (this is defined as households that have more than 50% of income coming from outside Canada).
Owners are exempt from the tax if the property is their principal residence, they rent it at least six months of the year (only three months is required in 2018), they are disabled, the property was just inherited, it’s valued below $150,000, or a person was away and it was vacant due to residential care, medical challenges, work or spousal separation.
Strata property units in buildings where strata bylaws ban rentals are also exempt, but only for 2018 and 2019, to give stratas time to change their bylaws, according to the ministry.
Other exemptions are allowed for First Nations, charities, co-ops, some not-for-profit organizations, local governments, and developers working on construction or renovation of property.
British Columbians with second homes (IE vacation property) who are not exempted will be allowed to get a credit intended to negate the tax on the assessed value up to $400,000, with the remaining value of the property then levied and taxed at the full rate.
Details of this tax are still evolving and changing, so visit the provincial government website for up to date info: https://tinyurl.com/yb6dmt4c
