In addition to the expansion of the foreign buyers’ tax, the announcement of the 2018 BC Budget Plan also introduced a new tax.
Speculation Tax:
“The tax is designed to capture foreign and domestic speculators, satellite families who live in B.C. but do not pay their share of income taxes, as well as homeowners who hold vacant property in designated urban centers.”
The speculation tax proposed by the government aims to save the housing market from becoming a stock market and to protect local residents. Since the announcement, there have been several changes but here’s what you need to know:
- Tax applies to Metro Vancouver Regional District, Kelowna-West Kelowna, Nanaimo-Lantzville, Abbotsford, Chilliwack, and Mission. Most islands are excluded. (Details visit HERE)
- Exemptions:
- Primary residences of British Columbians
- Properties that are used as qualifying long-term rentals (at least three months)
- Tax Rate:
- 2018 --> 0.5% of assessed property value
- 2019 and onwards:
- 2% for foreign investors and satellite families
- 1% for Canadian citizens and permanent residents who do not reside in BC
- 0.5% for British Columbians who are Canadian citizens or permanent residents
Source(s):
https://www2.gov.bc.ca/assets/gov/taxes/property-taxes/publications/is-2018-001-speculation-tax.pdf
http://vancouversun.com/news/politics/b-c-budget-2018-how-the-budget-will-affect-british-columbians
https://www.bdo.ca/en-ca/insights/tax/tax-alerts/british-columbia-speculation-tax/
http://vancouversun.com/news/local-news/b-c-speculation-tax-heres-what-you-need-to-know
