SPECULATION TAX COMPLIANCE
2021 Tax Compliance
In 2021, 95% of our eligible properties were exempted from the requirement to pay the Speculation and Vacancy tax.
SPECULATION AND VACANCY TAX
If the property is your Principal Residence:
Generally, an owner is exempt from the tax if the residential property is their principal residence. A principal residence is the place where an individual lives for a longer period in the calendar year than any other place.
If the property is not your Principal Residence:
If a renter or non-arm’s length tenant occupies an owner’s home for at least six months in the calendar year, the owner may be exempt from the tax.
To be eligible for exemption, the following must be met:
The property must be rented for 6 months in a calendar year under the following conditions:
- The rental period should consist of minimum periods of 30 days. Periods shorter than 30 days do not count towards the six-month minimum requirement.
- The rental periods should not have to be consecutive.
- Owner stays do not count towards the minimum rental period requirement.
Please refer to the tenancy requirements for the Speculation and Vacancy Tax Exemptions.
How may the Speculation and Vacancy Tax affect you?
If the Speculation and Vacancy Tax Requirements are not met, Speculation Tax applies.
The applicable Speculation and Vacancy Tax rate varies depending on the owner’s tax residency and vacancy, i.e. foreign ownership. In addition, the tax rate varies based on whether the owner is a Canadian citizen or permanent resident of Canada, or a Satellite Family. See link to the respective government website for further information.
A foreign owner is someone who is not a Canadian citizen nor permanent resident of Canada. A satellite family (also known as an untaxed worldwide earner) is an individual or spousal unit who earns the majority of their worldwide income outside of Canada, regardless of citizenship status. This means that if you are a Canadian citizen or permanent resident earning the majority of your income outside of Canada, you would be classified as a satellite family for the purposes of BC speculation tax and you would be taxed at the satellite family rate.
The tax rates are as follows:
- 2% of the assessed property value for foreign owners and satellite families
- 0.5% of the assessed property value for Canadian citizens or permanent residents of Canada and who are not members of a satellite family
- The Speculation and Vacancy Tax applies based on ownership as of December 31 of each year.
- A Speculation and Vacancy Tax year is the same as a calendar year. Tax levied on December 31 is due the following July. For example, for a property owned by a Canadian citizen as of December 31, 2022, the 2022 tax rate of 0.5% applies and the tax is due on July 2, 2023.