Homeowners in Vancouver should know that the city has implemented the Empty Homes Tax in 2018. If it is not declared before the deadline, the owner would be levied 1% of the property’s assessed value and a fine of $250 will be charged each delayed day. Now, the BC government has also implemented Speculation and Vacancy Tax. If it is not declared before the deadline, 0.5% of the property valuation will be vacant in 2018; in 2019 and subsequent years, foreign owners will be taxed at 2% of the property valuation, and residents will be taxed at 0.5% of the property’s assessed value. The deadline for filing for both taxes is February 4, 2019. The provincial government policy will affect all homeowners with residential properties in Greater Vancouver.
The Empty Home Tax and the provincial Speculation and Vacancy Tax are two different taxes. If your investment property is located in the city of Vancouver and does not meet the exemption, both taxes apply. In other words, you must pay the Vancouver City’s Empty Home Tax for the Vancouver property, as well as the provincial Speculation and Vacancy Tax. On the other hand, if your investment property is located in other cities in British Columbia and does not meet the exemption, you only need to pay the Speculation and Vacancy Tax imposed by the provincial government.
Renting out your vacant home is one of the ways to meet the criteria as an exempt because the main purpose of implementing these vacant property taxes is to drive down rents by forcing vacant properties available for rent and increasing the number of house rentals in the region.
The rental exemption terms for Vancouver and the provincial government are different. For 2018, a house in Vancouver must be rented for more than six months to be exempt, while a house in British Columbia can be exempted if it has been rented out for three months. Short-term rentals of less than 30 days cannot be counted as tenancy period. For 2019 and subsequent years, both the province and Vancouver city will require that a house be rented out for six months or more in order to be exempt.
For homeowners with investment properties, these vacant house taxes are a driving force to consider renting out the properties. If you have an unoccupied residential property and do not wish to pay the relevant empty house taxes, now is the time to rent out your house or condo. If you feel that the management of the rental house is too complicated and involved, you should find a professional licensed rental house manager to help you out.