Exemptions to Bill 45
On Oct. 16, 2018, the B.C. government introduced Bill 45, the Budget Measures Implementation (Speculation and Vacancy Tax) Act. The speculation and vacancy tax is designed to prevent housing speculation and help turn vacant and underutilized properties into homes for people who live and work in BC. The first legislation of its kind to be introduced in the country, the tax is a part of the BC government's 30-Point Plan to address the housing crisis and help make life more affordable for BC residents, by protecting the market against people looking to use it as a resting place for foreign capital and other speculative investments.
This annual tax is payable by owners of residential property in designated taxable regions of BC. 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, or a member of a satellite family. More than 99% of British Columbians are estimated to be exempt from the tax, and all revenue raised from the speculation and vacancy tax will be used to fund affordable housing for people who live in BC.
As of the passing of Bill 45, the Government of British Columbia has approved additional exemptions to the tax, addressing advocacy concerns brought to the Province’s attention by BCREA. The Bill now allows for exemptions for British Columbians going through traumatic life events such as illness, divorce, or separations, and for owners of properties that are being developed or undergoing renovations. It also exempts strata units from a vacancy tax for 2018 and 2019, where strata restrictions prohibit rentals. Further clarity is needed on this exemption and other implications.
BCREA, its 11 regional real estate boards and the 23,000 REALTORS® they represent look forward to providing the Province with REALTOR® insight on the implementation of Bill 45 to ensure that the best interests of BC homeowners are served.
For 2018, the tax will be levied at:
- 0.5% of the property’s assessed value for all properties subject to the tax
For 2019 and subsequent years, the tax will be levied at:
- 2% for foreign owners and satellite families
- 0.5% for British Columbians and other Canadian citizens or permanent residents who are not members of a satellite family
The tax will be levied on owners who own the property on December 31 of each taxation year.