2018 Tax Year in British Columbia

Your 2018 Tax Year

It’s that time of year again.The 2018 tax year in British Columbia.  With an interesting few years in the housing market and with new tax guidelines implemented from both the Provincial and Municipal levels in 2018, as a homeowner you may be wondering what all of this means for you.

Your 2018 Tax Year in British Columbia 

The 2018 tax year introduces 2 new taxes at 2 different government levels. While one will affect properties owned in the province of British Columbia; The Speculation and Vacancy Tax, the other, the Empty Home Tax, is for Vancouver home owners. For properties owned outside of Vancouver but still within British Columbia, The Speculation and Vacancy Tax applies while owners with properties in Vancouver are subject to both the provincial Speculation and Vacancy Tax and the City of Vancouver’s Empty Home Tax.

What is the Speculation and Vacancy Tax?

The Speculation and Vacancy Tax is the province of British Columbia’s way of curbing the provincial housing crisis and make housing more affordable by:

  • Targeting foreign and domestic speculators who own residences in B.C. but don’t pay taxes here
  • Turn empty homes into good housing for people
  • Raise revenue that will directly support affordable housing

Any owners of residential property in the designated taxable regions of B.C. must complete an annual declaration. It is estimated that over 99% of British Columbians are exempt from the speculation and vacancy tax but every property owner is required to make a declaration.

 As noted on the Government of British Columbia website; “The speculation and vacancy tax rate varies depending on the owner’s tax residency and whether the owner is a Canadian citizen or permanent resident of Canada, or a member of a satellite family. By levying the highest tax rate on foreign owners and satellite families (those who earn a majority of income outside the province and pay little to no income tax in B.C.), the speculation and vacancy tax is a way to make sure these property owners are paying their fair share in taxes. The speculation and vacancy tax applies based on ownership as of December 31 each year.”

What is the Empty Home Tax?

The Empty Home Tax is the City of Vancouver’s tax on empty homes and has been introduced to assist in affordable housing initiatives much like the Provincial Speculation and Vacancy Tax.  Each year, one owner of residential property in Vancouver is required to submit a property status declaration, it is similar to the Speculation and Vacancy declaration, but it is not the same.  This declaration will determine if the property is subject to the Empty Home Tax. Properties deemed empty will be subject to a tax rate of 1% of the property’s 2018 assessed taxable value.

Most homes will not be subject to the tax, as it does not apply to principal residences or homes rented for at least six months of the year; however, all homeowners are required to submit a declaration. According to The City of Vancouver, any net revenues from the Empty Homes Tax will be reinvested into affordable housing initiatives.

Making your Declaration for the 2018 Tax Year

For Vancouver residential properties owners making the Empty Home tax Declaration in the 2018 tax year, follow the steps linked here. For late declarations you will be required to pay or dispute your bylaw ticket before making your declaration.

 

For British Columbia property owners in the taxable region in order to claim your exemption for the Speculation and Vacancy Tax, you must register your property by March 31, 2019, either by telephone or online. The information needed to complete the declaration should have been received by mail by late February. Follow the instructions here to complete your Speculation and Vacancy Tax.

**Please note that if your property has more than one owner, even if the other owner is your spouse, a separate declaration must be made for each owner. 

Enlist in Professional Expertise  

When it comes to income tax season, it’s easy to get wrapped up and confused with all the documents you need and don’t need. This is especially true if you own investment real estate that you rent out to tenants.

Various tax laws, exemptions and rules need to be considered. It’s useful to have a team of experts in your corner to ensure that everything goes smoothly, including understanding new municipal or provincial tax laws such as the ones implemented for the 2018 tax year.

If you are a property owner with renters, consider the expertise, knowledge and organization of a Licenced Property Manager who not only maintains all of the day to day things with respect to your investment property and tenant, but will also ensure you are kept abreast on applicable changes, bylaws and documentation that may be required. You can also contact your property manager for assistance with things like the Speculation and Vacancy Tax or the Empty Home Tax.

To further keep things running smoothly in your wealth building strategy, consider the professional services of a Chartered Accountant who understands everything tax related, and can easily communicate with your property manager for any documents or records.

To enlist the professional expertise of a Licenced Property Manager or to learn more about Rent it Furnished’s full line of services, contact us here.