Speculation & Vacancy Tax Exemption Filing and Purpose-Built Rental Buildings

LandlordBC contacted the Minister of Finance to determine whether owners of purpose-built rental buildings would be required to declare an exemption for the Speculation & Vacancy Tax (purpose-built rental buildings are classed as “residential” for property tax purpose).  While exempt from the tax, per the following response we received from the Ministry, you will nevertheless have to file a declaration for the exemption. The deadline to declare an exemption is March 31, 2019. Residential property owners who do not complete their declaration before the deadline will receive a tax notice of assessment. The tax must be paid by early July.

January 25, 2019

To: LandlordBC
From: Annual Property Tax Services, Property Taxation Branch, Ministry of Finance

Non-stratified rentals

  • Non-stratified purpose-built rental buildings are exempt from the speculation and vacancy tax
  • Rental buildings are excluded from the definition of residential property by section 2 of the Speculation and Vacancy Tax Regulation (http://www.bclaws.ca/civix/document/id/complete/statreg/275_2018)
  • The rental building owner will have to file a declaration in the first year in order to identify that their property meets the criteria in the regulation. BCA data was not specific enough to allow us to identify and do an upfront exemption on these properties in the first year.
  • In subsequent years we will have a list of properties that have previously filed and will not have to send the owners of those properties a declaration form.
    • This is a separate exemption from the tenancy exemptions found in sections 36-39 of the Speculation and Vacancy Tax Act.
    • A rental building would likely also qualify for the tenancy exemptions found in sections 36-39 but they should use the exemption in the regulation as this will mean they only have to do the declaration once rather than every year.
  • Building owners whose property meets the requirements in section 2 of the regulation should select “This property is a rental apartment building” from the list of exemptions when they complete their declaration.

Stratified rentals

  • An individual strata condo unit that is rented out will need to have a declaration filed each year and the tenancy exemption will need to be claimed each year.

For more information, a complete list of exemptions, and to learn what is new or has changed about the speculation and vacancy tax, please visit the speculation and vacancy tax website.

The Speculation and Vacancy Tax website can be found here:

https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax