You have probably heard the term "BC Speculation and Vacancy Tax" on the news or online for quite some time now. But do you know what they are?
As of Fall 2018, the BC Government introduced the SV Tax as part of a 30 point plan to make housing more affordable, and to free up vacant homes for renters and buyers who actually want to live in BC. The Tax will target people who use the housing market like a stock market, or a place to "park" their money.
The point of this blog is to give you the most important facts regarding this new tax, as simple and strait forward as possible.
#1: The SV Tax applies ONLY TO CERTAIN AREAS OF THE PROVANCE. (Refer to the image below.) This is the governments way of focusing on the geographic areas that are hardest hit in the housing market with vacancy rates as low as 0%.
#2: According to the Government, over 99% of British Columbians will be exempt from the tax because the majority of homes in the taxable areas will either be owner-occupied or a long-term rental.
For a full list of exemptions visit https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax/exemptions-speculation-and-vacancy-tax?
#3: If you meet requirements for exemption... YOU ARE NOT AUTOMATICALLY EXEMPT. You must fill out paperwork yearly to opt out. Details on how to do so are outlined on letters being mailed out later this month.
*** DO NOT THROW OUT THIS LETTER- if you fail to fill out the paperwork and follow the directions inside by the end MARCH 2018 you may be hit by an additional tax bill based on the rates below:
TAX RATE FOR 2018: Any property owned by an indivudual on December 31st 2018 will have a rate of 0.5% of the property's assessed value (as of July 2018).
TAX RATE FOR 2019+: For 2019 and subsequent years, the SV tax will be as follows...
2% for foreign owners and satellite families
1% for Canadian Citizens and Permanent Residents who do not live in BC
0.5% for British Columbians who are Canadian Citizens or Perminant Residents