Get ready to make declaration to avoid speculation tax

Photo: Contributed

If you own a home in Kelowna, West Kelowna, Metro Vancouver or parts of Vancouver Island or the Fraser Valley, it’s time to declare it your personal residence or rent it out to avoid paying B.C.’s speculation and vacancy tax.

The annual declarations must be made before March 31. Property owners will receive letters with declaration codes before the end of February.

The tax, applicable for properties in the Metro Vancouver Regional District, the Capital Regional District, Abbotsford, the District of Mission, Chilliwack, Kelowna, West Kelowna, Nanaimo and the District of Lantzville, was introduced in 2018 to curb speculation that drives up prices. The government says it encourages people to rent out their vacant homes.

According to B.C.’s Finance Minister Katrine Conroy, the tax is working.

“We've seen thousands of empty condos return to the rental market in Metro Vancouver alone," said Conroy. "While some would cancel the speculation tax altogether and let speculators back into our housing market, we will be expanding it to additional communities next year, and we'll continue to strengthen it to help provide much-needed homes for people and families."

In 2024, the number of SVT communities will expand to include residential properties in North Cowichan, Lake Cowichan Duncan and Ladysmith on Vancouver Island and Lions Bay and Squamish on the Sunshine Coast.

The government says it is announcing the additional new communities now to give owners with vacant residential properties in those communities time to change their use and be eligible for an exemption.

Exemption eligibility is based on how owners use their property during the year. For example, if a property owner uses it as a principal home, rents it out for more than six months of the year or meets other rental exemption criteria, they are exempt from paying the tax.

According to the government, more than 99% of people who live in B.C. were exempt from the tax in 2022 and the same is expected in 2023.

If not exempt, property owners must pay the assessed amount by July 4 to avoid a 10% penalty. The tax is separate from regular annual property taxes.

While the amount of money raised by the tax has decreased since 2019 as market and owner behaviour has changed, a total of $313 million has been raised by the SVT to fund “affordable” housing in SVT communities, according to the government.

Property owners cannot file their declarations to avoid the tax until they have received their declaration letters, which include a special code that must be used to file online or over the phone.

To securely declare online after a declaration letter has been received, and to find information about available exemptions, go to the SVT webpage.