BC’S SPECULATION AND VACANCY TAX

Tackling the Housing Crisis

Standing up for
British Columbians

Returning fairness to the housing market

For too long, this housing crisis was allowed to escalate, hurting working families, renters, seniors, students and others around the province. With this new tax, we’re targeting satellite families, foreign owners and speculators to curb the flow of off-shore money into our housing market. The tax makes sure that people who use local services without paying B.C. income taxes contribute their fair share.

People who live and work in B.C. should be able to afford to live here. All revenue from the speculation and vacancy tax will be used to fund affordable housing for people who live in B.C. Further, the tax will help boost the province’s rental supply by creating incentives to make vacant properties into homes for people.

Our government is standing up for the vast majority of British Columbians who want action, because the status quo isn’t working. Read more about what we’re doing to tackle the housing crisis in our 30-point Plan for Housing Affordability in B.C.

Couple at the lake

Speculation and vacancy tax highlights

  • The speculation and vacancy tax will help make sure hard-working British Columbians can afford to live in their own province. The speculation and vacancy tax applies only in B.C.’s largest urban centres facing the greatest affordability challenges.
  • By levying the highest tax rate on foreign owners and satellite families, the new tax targets those with limited social and economic ties to B.C.
  • It creates a strong incentive for out-of-province real estate speculators and people who are sitting on vacant properties to put those homes on the rental market.
  • British Columbians’ principal residences are exempt from the tax.
  • Properties used as qualifying long-term rentals are exempt from the tax (defined as six months of the year in increments of at least a month).

Map of affected areas

Who pays the speculation and vacancy tax

  • Foreign owners: A foreign owner is an individual who is not a Canadian citizen or permanent resident of Canada. Provincial nominees under the provincial nominee program are deemed to be B.C. residents.
  • Satellite families: A satellite family is an individual or spousal unit where the majority of their total worldwide income for the year is not reported on a Canadian tax return.
  • Canadians or permanent residents who live in B.C.: They will pay the tax on secondary homes they own but leave empty within the designated urban areas. Their primary residences are exempt.
  • Canadians or permanent residents who live outside BC: They will pay the tax on homes they own in the designated urban areas that are not rented out for at least six months of the year.
  • Note: Both foreign owners and out-of-province Canadians who will pay the tax will be able to receive a tax credit if they report income in B.C.

Who doesn’t pay the tax

An estimated 99% of British Columbians won’t pay this tax. These are people who:

  • Own one home and live in it (principal residence).
  • Are renters (the tax only applies to homeowners).
  • Own a second home outside of the designated urban areas.
  • Own a second home in the taxable area and rent it out for at least six months of the year (in increments of at least a month).
  • Own a second home, that is vacant and inside the designated urban areas but is valued below $400,000.
  • There are also exemptions for special circumstances including major home renovations and difficult life events such as divorce, as well as exemptions to broadly protect development.

For Canadians & permanent residents living in BC

Does BC’s new speculation tax apply to you?

What is the speculation tax?

BC’s new speculation tax is designed to help make housing in overheated markets more affordable and available. With it, we’re telling speculators to free up homes they’re keeping vacant so they can be used by British Columbians desperate for housing.

Our approach means 99% of British Columbians – even if they own vacation homes – will not have to pay this tax.

Start here

Do you own at least one home in BC?

No? Stop here. Pay no tax.

Yes? Continue.

Do you own one or more homes in the urban centres of Vancouver, the Capital Regional District (excluding the Gulf Islands and Juan de Fuca), Kelowna and West Kelowna, Nanaimo, Lantzville, Abbotsford, Chilliwack or Mission?

No? Stop here. Pay no tax.

Yes? Continue.

Are any of these homes left vacant? (“Vacant” is defined as either: not your primary residence; or, not rented out for at least six months of the year in periods of 30 days or longer; for 2018, it must be for at least three months)

No? Stop here. Pay no tax.

Yes? Continue.

The $400,000 exemption

Here’s where it gets tricky. Please read both statements.

I only own one empty home and its value is $400,000 or higher

Or

I have 2 or more empty homes

If you answered No to both, stop here. Pay no tax.

If you answered yes to either, continue

Are you exempt due to special circumstances? (The owner: is undergoing medical care or residing in a hospital, long-term care or supportive care facility; is temporarily absent for work purposes; is deceased and the estate is being administered.)

Yes? Stop here. Pay no tax.

No? Continue.

Here’s how the tax affects you.

For British Columbians

The tax will apply on homes they own but remain vacant within the designated urban areas – Metro Vancouver, the Capital Regional District (excluding the Gulf Islands and Juan de Fuca), Kelowna and West Kelowna, Nanaimo, Lantzville, Abbotsford, Chilliwack and Mission.

Tax Rate: 0.5% of property value

Foreigners & Satellite Families

The tax rates for Foreign Speculators & Satellite Families is 2%

Canadians or Permanent Residents Who Live Outside BC

The tax rates for Canadians in other provinces is 1%

99% of British Columbians will not pay this tax

Download the Infographic PDF