B.C. has updated its speculation tax. If you’re an out-of-province owner and don’t qualify for an exemption, you can count on paying more.
As expected, the government of British Columbia has implemented changes to its year-old speculation and vacancy tax for the 2019 taxation year. Two key changes for owners of recreational property are: an increase in the tax rate from 0.5 per cent to 2 per cent for foreign and non-B.C. owners and satellite families (you’re considered a satellite family if you declare less than 50 per cent of your total combined household income on Canadian income tax returns); and an exemption for water-access property, i.e., if it can’t be accessed by road or isn’t a short walking distance from a public or private road (this new exemption is also retroactive to the 2018 taxation year).
The tax is intended to ding speculators who buy properties as investments and leave them empty. The government estimates that the tax will raise $115 million in fiscal 2018, and the money is earmarked for affordable housing projects. But the tax, which went into effect in late 2018, has been controversial. Among those fighting the tax are cabin owners who have rustic cabins that cannot be rented out during the winter, which would earn them an exemption from paying the tax. Late last year, several owners filed a class-action lawsuit against the tax in B.C.’s Supreme Court.
The speculation tax appears to be popular, however, among the general population. A recent poll conducted by Research Co. found that 76 per cent of respondents were in favour of the speculation tax, up from the 68 per cent favourable response in a similar poll conducted in March 2019. This new poll showed a similar high level of support, in fact, among voters for all three major political parties in the province.