In addition to basic annual property taxes, five property-related taxes have been introduced or increased in BC since 2017. Have you ensured all your filings are current?
If you own a non-principal residence, a higher-value property, a property left vacant for part or all of the year or held a BC property through a foreign entity or taxable corporation, the recent tax changes may impact you. Furthermore, life changes such as a medical event, work relocation or death impacting one or more property owners may alter your tax exposure. Since significant penalties can result from failing to comply with tax and disclosure requirements, consider seeking professional tax advice to manage your tax exposure.
The following table highlights some features relating to the recent tax changes. Click on the table to enlarge it.
Exemptions and Reductions
Some tax relief may be available through exemptions or reductions, such as those included in the partial list below.
Reserve or Treaty Lands: Holding a rental, speculation or vacation property on reserve or treaty lands may be more tax-effective since these are not included in the taxable region for the Empty Homes Tax, BC Speculation and Vacancy Tax or Additional PTT (regular PTT and property tax including school taxes can still apply on reserve and treaty lands).
City of Vancouver Empty Homes Tax Exemptions: Unless a property is an owner’s principal residence, part of the property must be occupied at least six months a year by the owner, a friend, family member or other permitted occupier as a principal residence, or tenanted at least six months a year in periods of 30 days or more, unless another exemption is obtained.
Other exemptions include: where the owner’s principal residence is outside Greater Vancouver, but they work full-time in Greater Vancouver at least six months per year; where all occupants reside in a hospital or care facility; where an estate is awaiting a grant of probate or administration; where the property is undergoing major renovation or redevelopment; where maximum rentals have been reached under certain restrictive rental bylaws; where the property was sold; or where a court order or other situation restricts occupancy. However, time and/or other limits apply to each exemption.
BC Speculation and Vacancy Tax: Owners who live in the home as their principal residence or rent part or all of it out at least six months per year during 2019 in periods of one month or longer are usually exempt. Residential properties owned by housing co-ops, registered charities and certain other entities are also exempt. Property recently inherited or purchased, vacant due to medical treatment, owned by spouses separated for work, medical reasons or recently separated or divorced or those meeting other criteria, may also be exempt for certain time periods. Exemptions are determined per owner (not per property); any non-exempt co-owners pay tax on their percentage ownership. Tenancy requirements differ for Canadian owners versus foreign/satellite family owners.
Tax credits may partly or fully offset tax. A credit up to $2,000 is available for Canadian residents; foreign owners/satellite families may reduce their 2% rate to as low as 0.5% through a 20% credit on BC income.
BC School Tax: Eligible farm, industrial or Agricultural Land Reserve properties may get a 50-60% school tax reduction.
BC PTT, PTT surtax and additional PTT: PTT exemptions generally apply to additional PTT, and special rules for farm or mixed-use residential property may reduce tax. A confirmed BC Provincial Nominee may claim one exemption from the PTT surtax.
For more information, please contact your Odlum Brown Investment Advisor or Portfolio Manager.
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