Are you a BC resident that typically spends multiple months of the year abroad or living in other locales? If you’re a warmth-seeking snowbird that flies south to escape the chill or a busy professional that needs to travel from location to location for work, British Columbia’s speculation and vacancy tax may apply to you. Learn more about the empty house/speculation and vacancy tax and how Paperclip Law can assist you below!
Fast Facts: British Columbia’s Empty Home Tax
It’s no secret that the Province of British Columbia has an incredibly diverse population that includes residents that have come from all over the globe to settle into one of the most beautiful areas that Canada has to offer. Over the past several decades, BC’s housing market has experienced a massive boom, with properties being snapped up quickly, particularly in the Metro Vancouver region. This demand for housing has seen a marked increase in property prices throughout the province. With many buyers purchasing from outside the country with the intent of spending a limited amount of time within BC throughout the year, foreign investors have amassed a disproportionate amount of the real estate market in the province, prompting the government to step in and regulate.
Introduced in 2017, the BC Speculation and Vacancy tax is designed to help alleviate some of the strain caused by an excess of foreign buyers by imposing a small tax (3% in 2021) to property owners that do not reside in their home for more than 180 days/6 months of the year. Per the BC Government, the intent of the tax is to turn empty homes into housing for British Columbians and to ensure that foreign owners with foreign income still contribute fairly to BC’s tax system. The speculation and vacancy tax (aka the empty home tax) applies to individuals based on:
- How they use their residential property
- The residency status of property owners, and
- Where property owners earn and report their income.
How to Complete a Declaration
The empty home tax is an annual declaration that must be submitted by March 31 each year and paid by July 2nd. As your living circumstances may change from year to year (for example, those who were forced to remain abroad due to COVID-19 travel restrictions), you must submit a new declaration each year. In addition, if your property has more than one legal owner, each owner must submit a declaration, regardless of marital status or familial relationships. This is because the tax is based on how each owner uses the property and whether they have foreign income.
Why You Need to Declare
BC requires you to declare your residency status regardless of if you pay taxes in Canada and how you use your property in order to determine if you or your fellow owners qualify for tax exemption, which tax rate you’ll need to pay if it is applicable, and if you are eligible for a tax credit.
Can You Appeal the Tax?
While you cannot simply opt-out of the tax because you disagree with needing to declare in the first place or because you forgot to file your declaration, you can file a formal appeal if you believe there has been an error made in your assessment.
Note: the province strongly advises that you pay your assessment regardless of if you plan to appeal to avoid further complications; should your appeal be approved, you will be paid back any overages, as well as interest.
Real Estate Legal Assistance With Paperclip Law
Need help filing an appeal or making sense of your declaration for 2022? Paperclip Law is here to help! Since 2011 we’ve partnered with clients throughout Vancouver and the Squamish region to you with the day-to-day details that matter most. From tackling the real estate market to handling your estate and everything in between, we’ve got you covered. Learn more about how we can help with the empty home tax by contacting our team today!