Homeowners – this is an important update on the new speculation tax that you NEED to know about. Many BC homeowners will be required to opt-out of the new tax, or they will be charged it by default.
The required forms have started to be sent out by postal mail and if you haven’t yet received the notice and form, it should be in your mailbox within the next month. Homes in Kelowna and West Kelowna are subject to the speculation and vacancy tax (SVT) if the property in question is not their primary home. In other words, if the property is your primary home you are exempt but you must submit the required paperwork.
The deadline to submit the declaration and exemption form is March 31, 2019. If you haven’t received your letter by the end of February you should phone the speculation and vacancy tax call centre at 1-833-554-2323.
Requirements for Exemption:
According to the BC Government website, most British Columbians will be exempt if the home is their principal residence or they rent out their property for at least 3 months of the year (this changes to 6 months for 2019). Short-term rentals for periods of less than one month do not count toward the total.
There are a variety of other exemptions available and you can find more information here.
If you own a property in Kelowna or West Kelowna that is not your principal residence and you do not qualify for an exemption the following new tax rate applies:
For 2018, the tax rate is:
- 0.5% of the property’s assessed value for all properties subject to the tax
For 2019 and subsequent years, the tax rate is:
- 2% for foreign owners and satellite families
- ￼0.5% for Canadian citizens or permanent residents of Canada who are not members of a satellite familyThe speculation and vacancy tax applies based on ownership as of December 31 each year.
In Kelowna, many homebuyers (and many of our clients) enjoy a second vacation home that falls within the Kelowna and West Kelowna boundaries. We understand your vacation home was bought as an investment designed for your family and friends to enjoy for years to come. For many of you, you are not speculators but rather enjoying the many amenities of our area whenever you or your family can come and visit. While we have seen some decline in interest from people inquiring about purchasing a vacation property within the area, in many cases, the benefits far outweigh the tax disadvantage. However, if you’d like to avoid the tax, we can help you identify several options outside the boundaries. If you’ve ever considered an investment or vacation property and are wondering how this tax would affect you, please do reach out. We’d love to chat.
There are also rumours that people are trying to encourage home owners not to submit the Speculation tax forms as a way to prove that the Government can’t push BC Residents around. This is not a good idea….. Don’t put yourself at risk. Submit the forms and we will let the Government realize the impact on administration and work load they have just laid out for themselves as well.
“Remember, real estate is a sound investment. Timing is always important but having the right Realtor® represent you is also key to a great purchase or sale.” – Darcy Nyrose