Have you been confused by all the different taxes in BC? Just when you thought you were starting to understand them all, some of them changed, and new taxes were added?! Well, you are not alone. I quite often receive questions about different taxes, and how they all come together when purchasing or selling a property in British Columbia.
Here comes your own personal cheat sheet:
Property Transfer Tax (PTT)
- when purchasing residential property
- it has increased increased to 5% (from 3%) of the purchase price for the value above $3,000,000
- so, it’s as follows:
- 1% on 1st $200,000
- 2% on balance up to $2,000,000
- 3% on balance above $2,000,000 up to $3,000,000
- 5% on balance above $3,000,000.
Foreign Buyer Tax
- additional property transfer tax for foreign buyers
- increased to 20%
- expanded to areas outside of the GVRD (for more information, see here).
Empty Home Tax or “EHT”
- only for City of Vancouver properties (for more information, see here)
- it became effective on January 1, 2017
- it is applied annually
- the tax rate is 1% of the assessed value based on the assessment in the year the tax is paid
- it does not apply to a home used as a principal residence or a home that is subject to a long term tenancy agreement (at least 180 days accrued in a calendar year with a minimum of 30 day terms for the tenancies)
- exemptions: major renovations, major illness, death of the owner, ownership of the property changed during the previous year, strata rental restrictions in place prior to November 16, 2016, homes used for work orders, homes subject to a court order (for more information on exemptions, please see here)
- every residential home owner must submit an EHT Declaration by February each year, whether the property is vacant or not
- failure to submit an EHT Declaration will result in the City declaring the property vacant.
(For more information, see here).
- The tax applies to:
- residential properties in Capital Regional District (Victoria)
- Metro Vancouver Regional District including the University Endowment Lands and UBC, City of Abbotsford, District of Mission, City of Chilliwack, City of Kelowna and West Kelowna, City of Nanaimo and District of Lantzville.
- does NOT apply to Bowen Island and Village of Lions Bay
- 0.5% for permanent residents or Canadian citizens
- 2% for foreigners
- all residential property owners in designated taxable regions of B.C. have to complete an annual declaration for the Speculation and Vacancy Tax to claim exemption
- the declaration must be completed by each owner by March 31st each year
- tax owing is due July 2 of each year
- anyone using their home as their principal residence is exempt (if owners are Canadian citizens or permanent residents of Canada and B.C. residents for income tax purposes)
- long-term rentals are exempt from the tax (homes must be rented out for at least 6 months, in increments of 30 days or more)
- strata buildings with rental restrictions are exempt only if the rental bylaw was in place as of October 2018
- Some special case exemptions:
- owner/tenant undergoing medical care, in hospital, long-term care facility
- owner/tenant – temporarily absent for work purposes
- registered owner deceased, estate being processed.
- additional annual tax for all properties valued at $3,000,000 and higher and applied on any assessed value above $3,000,000 (e.g. if a property is assessed at $3.5 million, $500,000 it taxed).
- 0.2% tax for properties valued between $3,000,000 – $4,000,000
- 0.4% tax for properties valued $4,000,000+
- For more information, see here.