Registered owners of residential property in designated regions of British Columbia must complete their online declaration by 31 March 2020 to claim an exemption from the province's “speculation and vacancy tax” (SVT) for 2019.
Affected property owners can expect to receive a letter with the required details for completing their declaration by 21 February 2020. Property owners must complete the online declaration to claim their exemption from the SVT annually, regardless of whether any of their information has changed. Property owners who do not complete their declaration on time will receive a notice of assessment levying the SVT.
Affected owners who do not qualify for an exemption must pay their assessed SVT by 2 July 2020.
Tax increase for certain foreign homeowners for 2019
The SVT tax rate applicable to foreign owners and satellite families increased for 2019 (to 2%, up from 0.5% in 2018, of the assessed value of the taxpayer's interest in the property). The SVT rate remains at 0.5% for Canadian citizens or permanent residents of Canada who are not members of a satellite family.
Residential rental property exemption, 2019
To be eligible for a residential rental property exemption in 2019 and subsequent years, qualifying rental property must be tenanted for at least six months in the calendar year (up from three months in 2018), among other conditions.
New and extended exemptions for 2019
These changes may provide an additional two-year SVT exemption for affected taxpayers who own second properties in the province, such as condos. However, in the case of the rental restriction exemption, the exemption only applies if the property was acquired and the rental restriction was in place on or before 16 October 2018 (the date the draft SVT rules were first released).
British Columbia introduced the SVT in its 2018 provincial budget. The tax is intended to target foreign and domestic property owners who do not pay income tax in British Columbia. The speculation tax applied at a rate of 0.5% of assessed value, starting in 2018 and then increased for certain property owners to 2% of assessed value in 2019. The tax applies to residential properties in certain areas of the province, and is subject to a number of exemptions, including British Columbian's primary residences and qualifying long-term rentals.
Read a February 2020 report prepared by the KPMG member firm in Canada
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