You may be wondering what is the difference between Empty Homes Tax and Speculation and Vacancy Tax. Some people think that the two taxes are synonymous. However, that is not the case with the taxes.
If you are a property owner in Vancouver, knowing the difference between the two taxes is important.
What is the Difference between Empty Homes Tax and Speculation and Vacancy Tax?
The difference between Empty Homes Tax and Speculation and Vacancy Tax is that one is a municipal tax while the other is a provincial tax. The Empty Homes Tax is a municipal tax that applies to property owners in the City of Vancouver. The Speculation and Vacancy Tax is a provincial tax that applies to property owners in British Columbia.
The taxes are similar in that they are based on how the property is used. Likewise, they both aim to support affordable housing. Therefore, the main difference is where the tax applies to.
What is the speculation and vacancy tax?
The Speculation and Vacancy Tax is a provincial tax applicable to residential property owners in British Columbia. The tax is based on the type of ownership of the residential property.
How much is the speculation and vacancy tax?
The tax rate for the speculation and vacancy tax is:
- 2% of the previous year’s assessed property value for foreign owners and satellite families
- 0.5% of the previous year’s assessed property value for Canadian citizens or permanent residents of Canada who are not members of a satellite family
Who is exempt from speculation tax?
There are a few ways to be exempt from speculation tax. Generally speaking, property owners are exempt from the tax if the home is their principal residence. Thus, most residential property owners are exempt from the Speculation and Vacancy Tax. However, every property owner must submit a declaration form each year. This states the status of ownership and determines if the property owner is exempt or not.
What is the Empty Homes Tax?
The Empty Homes Tax affects anyone who owns a Class 1 Residential Property in the City of Vancouver. It is a municipal tax that was created to decrease the amount of empty homes in Vancouver.
Check out our recent blog post on the Vancouver Empty Homes Tax to learn more about it! We cover more details about the tax. Learn more about the purpose of the tax, exemptions and what property owners should do.
How much is Vancouver’s Empty Homes Tax?
Vancouver’s Empty Homes Tax is an annual tax charged at a rate of 1% of the assessed taxable value of a property.
BC Assessment uses a Property Tax Equation to determine the assessed value of properties in British Columbia. They determine the value based on the valuation date of July 1st of each year. In January, property owners also receive their assessment notice. This contains the assessed value used to calculate the annual property taxes.
The assessed taxable value of a property is $1,000,000.
The Empty Homes Tax is charged at 1%.
1,000,000 x 0.01 = 10,000
In this case, the Empty Homes Tax for the year is $10,000.
For more information on real estate market in Vancouver, current trends, buying a home or selling a home, contact Top Vancouver Realtor Leo Wilk.