New Update – March 27, 2018:
Exemptions remain for principal residences and long-term rentals (rented for at least six months, in increments of at least 30 days). And exemptions have been added for specific circumstances, including death and long-term medical care.
The government is considering temporarily grandfathering strata units where rentals aren’t allowed, but there’s no firm decision on that, yet.
The tax rate has also been adjusted. In 2018, it will be 0.5 per cent for all applicable properties. Here’s how it will apply in 2019:
- for British Columbians with second homes in the affected urban areas: 0.5 per cent (though, homes valued up to $400,000 will be exempt),
- for Canadians outside BC, 1 per cent,
- for non-Canadians and “satellite” families, 2 per cent.
Wondering what all the talk is about BC’s new “Speculation Tax”?
Well here is some information for you to stay informed.
As part of the BC government’s new proposed budget, there are plans to introduce a new real estate speculation tax. It’s their attempt to combat real estate speculation and deal with housing affordability in BC. The planned tax would be implemented in 2018 and will be 0.5 % in the first year and go up to 2% in 2019. Planned revenue from the tax is estimated at $87 million in the first year and $200 million in the next.
The new tax will apply to Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts, and in more important to us locally, the municipalities of Kelowna and West Kelowna. The tax is meant to target foreign but also domestic speculators in B.C. We believe that B.C. residents will receive a non-refundable income tax credit to help offset the tax. We also know that the target is homeowners who remove units from B.C.’s long-term housing stock.
There are some exemptions to this new tax, they are:
- principal residence
- qualifying long-term rental property (“QLTRP”)
We’re All Awaiting Clarification From The BC Government On The Following Big Questions:
- what the definition of QLTRP is
- what the definition of vacant and short-term rental properties are
- whether non-B.C. residents will be able to take advantage of the QLTRP
- what “certain special cases” means
- what the definition of “satellite families” is
- how the non-refundable income tax credit will work
- whether domestic speculators will be treated differently than foreign speculators via the non-refundable income tax credit
Our very own Darcy Nyrose, Personal Real Estate Corporation with Coldwell Banker Horizon Realty was recently quoted by KelownaNow about his thoughts on the new BC real estate Speculation Tax. Read the article for more thoughts from him, the local mayors and people in our community.
For more information on the Speculation Tax and the BC 2018 Budget, view the plan here.
This is very new to all of us and as your Kelowna Real Estate Pros, we are continually researching this topic. We will learn (and share) more in the coming months and will keep you informed through our Blogs and Newsletters so be sure to keep an eye out.
If you have any questions, please do not hesitate to contact any of our team at 250-575-1946, we would be happy to help.
- Updated March 27, 2018 with additional information