In the February 28, 2018 Provincial Budget, the BC government announced it would introduce legislation to impose an annual speculation tax effective for the 2018 tax year.
The speculation tax targets foreign and domestic speculators in BC – homeowners with property not owner-occupied or rented long-term who do not live in BC.
Satellite families – households with high worldwide income that pay little income tax in BC – will also be captured by the tax which will initially apply to the Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts, and in the municipalities of Kelowna and West Kelowna.
In 2018, the tax rate will be $5 per $1,000 of assessed value, increasing in 2019 to $20 per $1,000 of assessed value.
The majority of BC homeowners who live in their home as a principal residence will be exempt from this tax. This will exclude satellite family.
“If you pay income tax in British Columbia you are not captured,” said Finance Minister Carole James. “If you’re from outside the province, and you leave your home vacant, you will be taxed.
Satellite families (husband or wife works abroad while spouse lives in BC) will be required to pay the tax.
The province will be collecting information from home owners to identify families with high worldwide income. These families will not be eligible for the principal residence exemption.
A British Columbian who lives in Vancouver and owns a vacation property, for example, in Kelowna can claim a non-refundable income tax credit to help offset the tax for BC residents.
The Province will issue notices by mail that will direct residential property owners to a BC Government website that will contain an electronic tax form (paper and phone options will also be available).
The notices will contain information on the various exemptions.
A poll from Insights West finds that 81% of British Columbians support the new tax.
Finance Minister Carole James is reported to be rethinking the tax after receiving many complaints from British Columbians who own vacation homes.
Learn more: BC Ministry of Finance Speculation Tax information sheet