Stricter rules are set to come into effect regarding the west coast speculation and vacancy tax. British Columbia is expected to raise the tax from 0.5% to 2% before the new year. The tax affects foreign owners of real estate, satellite families — those who don’t report the bulk of their income on Canadian tax returns. The provincial finance minister said the provincial tax was introduced on Dec. 31, 2018, to offset what was then considered to be a real estate crisis in British Columbia.
Statistics show the tax has been working as it was intended to work — taxing those who own vacant homes, foreign owners of real estate and speculators. Active Canadian armed forces members and their spouses who own property will be exempt from the tax in its next phase as will those who own properties only accessible by water. Foreigners who own vacant land will also be exempt from the tax in 2020.
There continues to be divisive thought regarding the tax — those who continue to oppose it and those who are in favour of increasing it. The B.C. Ministry of Finance estimates the tax has enriched provincial coffers by about $115 million since its inception. Those funds, the province says, are earmarked for funding affordable housing projects around the province.
There are many laws that accompany the ownership of real estate in British Columbia and some of them involve taxation. A lawyer experienced in real estate law can offer advice to speculators and foreigners wishing to purchase property. It is best to have some a solid idea of the issues prior to signing on the dotted line.