Speculation tax facts for kids

The Speculation and vacancy tax is a special tax in British Columbia, Canada. It started in 2019. This tax is for homes that are empty or not lived in most of the time. It's an extra tax you pay on top of your regular property taxes. The amount you pay depends on where you live. If you live in British Columbia, it's a small percentage of your home's value. If you live in another part of Canada, it's a bit more. For people from other countries, it's even higher. This tax is different from Vancouver's Empty Homes Tax, even though both are about empty homes.

What is the Speculation and Vacancy Tax?

The Speculation and Vacancy Tax is a property tax in British Columbia. It began in 2019. This tax applies to homes that are often empty. It is an "opt-out" tax. This means homeowners must apply to be free from paying it. If they don't apply, they might have to pay.

The tax rate changes based on who owns the home:

• People who live in British Columbia pay 0.5% of their home's value.
• Canadians from other provinces pay 1% of their home's value.
• People from other countries pay 2% of their home's value.

This tax is added to the usual property taxes. It helps make sure homes are used for living, not just for investment.

Why Does British Columbia Have This Tax?

The government of British Columbia created this tax to help with a housing problem. Many people in BC find it hard to find affordable housing. This is especially true in big cities. The government believes that too many homes were being left empty. They thought these empty homes were being held by speculators. Speculators are people who buy homes hoping the price will go up. They might not live in the homes.

The tax aims to:

• Encourage owners to rent out empty homes.
• Turn empty homes into places where people can live.
• Collect money to build more affordable homes.

This tax is part of a bigger plan. The plan is to make housing more affordable for everyone in British Columbia.

Where Does This Tax Apply?

The Speculation and Vacancy Tax applies in many urban areas of British Columbia. It does not apply everywhere in the province.

The tax is collected in these main areas:

• Most of Metro Vancouver, but not Bowen Island or the Village of Lions Bay.
• Abbotsford
• Mission
• Chilliwack
• Kelowna
• West Kelowna
• District of Lantzville
• Most cities and towns in the B.C. Capital Regional District. This includes places like Victoria. However, it does not include Salt Spring Island, Juan de Fuca Electoral Area, or the Southern Gulf Islands.
• Nanaimo

Homes on reserve lands or treaty lands belonging to First Nations are free from this tax.

Who Needs to File for Exemption?

Every year, all homeowners in the affected areas must apply for an exemption. This means they tell the government if their home is lived in. If a home has more than one owner, like a couple, each owner must apply separately.

If an owner does not apply for an exemption, they might have to pay the tax. This is true even if the home is being lived in by someone else. In 2019, many homeowners did not file for their exemption on time.

Changes to the Tax Rate

When the tax first started, the rate for all Canadians from outside British Columbia was higher. After discussions between the NDP Party and the Green Party, the rate was lowered. Now, Canadians from other provinces pay 1% of the home's value.