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.
Speculation and Vacancy Tax Exemption Phasing Out in 2022
There are numerous exemptions to the Speculation and Vacancy Tax. One exemption is phasing out starting in 2022. Prior to now, strata owners who had rental restrictions set in place for their building were exempt from the tax. However, starting in 2022 this will no longer be in effect.
Before, if a strata owner had a covenant or a strata bylaw preventing the property from being rented out, they would qualify for a rental exemption. This only applied if the rental restriction was in place on or before October 16, 2018 and the owner purchased the property before that date. This exemption was in place for 2018, 2019, 2020 and 2021 tax years only.
Other Exemptions from the BC Speculation and Vacancy Tax
The main exemption from the Speculation and Vacancy Tax is if your home is your principal residence.
Other exemptions include;
- Owners who rent at least 6 months of the year, granted tenancy requirements are met
- Medical absence up to two years
- Care Facility residence due to old age/addiction/mental health etc.
- Spousal Separation for work or medical reasons
- Person with a disability lives in the residence
- Just bought or inherited the property
- Inability to inhabit due to damage or hazardous conditions
- Year of acquisition of home (see conditions)
- Land under development
- Property is principal residence of a corporate interest holder, beneficial owner or partnership interest holder
View the full list of Exemptions of Speculation and Vacancy Tax from the Government of British Columbia.
How much is the Speculation and Vacancy Tax rate?
For 2019 and subsequent years, the tax rate is:
- 2% for foreign owners and satellite families
- 0.5% for Canadian citizens or permanent residents of Canada who are not members of a satellite family
Strata Owners with Vacant Properties Must Act Now
So any owners in British Columbia who have a vacant property in a strata building with rental restrictions must take action now. They must occupy the home or they will be subject to the tax starting next year in 2022.