Are you aware that there is a new tax called Speculation Tax?
This is different than empty homes tax, and requires you to apply in order to be exempt. If you do not, you will be automatically charged 0.5% for Residences and 2% for non-Residences. There are a number of qualifications that you must meet in order to be exempt. Before we go through that let’s clarify what taxes are due in BC this year for homeowners.
Taken from the City of Vancouver website, take a look at what’s due for you:
|February 4, 2019||Advance taxes
Last day to pay 2019 advance tax to avoid a 5% penalty on your unpaid balance.
|July 3, 2019||Main taxes
Last day to pay 2019 main tax, claim your homeowner grant, and complete your deferment application or renewal to avoid a 5% penalty on your unpaid balance.
|November 2019 (date TBD)||Tax sale
If taxes remain unpaid at the end of three years, the property is publicly auctioned at a tax sale to recover the taxes owing.
|December 31, 2018||Balance for the year
Any 2018 balance that remains unpaid after this date become tax arrears, and accrue interest of 7.70% effective January 1, 2019.
|February 4, 2019||Submit property status declaration
Last day to submit your 2018 Empty Homes Tax property status declaration. Failure to declare will result in your property being deemed vacant and subject to a Vacancy Tax at a rate of 1% of the property’s assessed taxable value. A $250 fine will also apply.
|April 12, 2019||Payment due
Last day to pay your 2018 Vacancy Tax (Empty Homes Tax) to avoid a 5% penalty on your unpaid balance.
|December 31, 2018||Outstanding tax added to property tax as arrears.
Any balance that remains unpaid after this date will be added to your property tax account and will begin to accrue interest of 7.70% effective January 1, 2019.
Of course there is a new tax! If you didn’t know, make sure you read on so that you are not accidentally charged. This new tax, that was mentioned in a previous post here, is called Speculation Tax.
Directly from the Government BC website:
“For 2019 and onwards, the speculation and vacancy tax rate will vary, depending on your residency and where you pay income tax:
- 2% for foreign owners and satellite families
- 0.5% for British Columbians and other Canadian citizens or permanent residents who are not members of a satellite family
The speculation tax and vacancy tax applies based on ownership as of December 31 each year.”
How do you know if you are exempt from Speculation Tax?
You must either have this home as you principal residence or rent it out for 3 consecutive months during the year. Short-term rentals such as Airbnb do not count towards a three month rental. This is different from empty homes tax which states you must rent out your home for longer than 30 day periods for a minimum of 6 months. It is important to note that you will be charged this tax (speculation) if you do not apply for an exemption.
The exemption is super easy to do, simply go online and make your declaration. The deadline is March 31, so plan ahead and do it now to prevent unnecessary charges.
For further information about the real estate market in Vancouver and current trends, contact Top Vancouver Realtor Leo Wilk.